What’s more, the Vehicle Miles Traveled (VMT)-a key industry stat that can highlight the pending need for new vehicles, parts, and service-has steadily increased to 3.03 trillion miles in July after dipping to 2.77 trillion miles in February 2021.2 However, the gross profit of service and parts sales was 46.8%, representing nearly one-third, 29.1%, of total dealership net profit.1 To reiterate, one-third of dealership profitability in a blowout year of new car sales profitability came from service and parts divisions. This represents 12% of dealerships total sales dollars. Think: your service and parts department.Īccording to the 2020 National Automobile Dealers Association (NADA) annual report on franchised new-car dealerships, service and parts departments brought in $111.2 billion in sales in 2020. Yet now, in the face of a mounting product shortage, it’s time to pivot your marketing efforts to other revenue streams. This was certainly the case for the first half of 2021 as auto sales and per-unit profitability soared to historic levels. You want to get new car buyers on your lot, walking through your front door, or the online equivalent-browsing and engaging with your website. When thinking of your marketing strategy, the first thought is vehicle sales. Today-amid an ongoing pandemic, in the middle of a global supply chain crisis-is the ideal moment to pivot your marketing strategy and grow your profitability by opening the right door to a new audience of “right” buyers. However, this is no time to idle your marketing efforts. As a result, some dealers are having to do the unthinkable: turn away buyers because they don’t have enough cars, trucks, and SUVs on their lots. It’s no secret that microchip production issues and ongoing supply chain delays are causing unprecedented shortages in vehicle inventories. Photo credit: Peter Fazekas on Pexels, unmodified.Strange times are fueling strange trends. These current consumer trends suggest an opportunity for planners and policy makers to advance shared-use mobility paradigms. Millennials also exhibit an affinity for ridesharing and transit use over car ownership. Another factor that could affect these trends is Millennials’ recent interest in and ability to purchase homes. Although limited traveling and telecommuting due to the pandemic caused a dent in auto sales, they are slowly going back to pre-pandemic levels. While COVID-19 has disrupted nearly everything, including our driving habits, advocates are calling for policy makers to capitalize while they can on these shifting trends of reduced car-dependency and pro-environment choices. Understanding their behavior and preferences is crucial to both public services and private businesses as they are the largest share of the country’s population and will soon be the predominant consumers, along with Generation Z. Millennials are generally seen as the more socially conscious, pro-environment generation with more sustainable consumption trends than previous generational cohorts. Baby Boomers also show a significant decrease in driving in later years. Millennials, on the contrary, drove the most in their early to late twenties and have not driven as much since. Baby Boomers reached their highest levels of VMT in their forties, while Generation X drove the most in their mid-thirties. The UT-Austin study also notes that the peak level of VMT for each successive generation occurred at an earlier age than the previous. Another study from 2020 that interviewed more than two thousand participants across age groups to understand their daily travel habits showed similar results. The study found that Millennials aged twenty and over have kept their VMT consistently lower than Generation X-by approximately 3 miles per day, or 8 percent less-and older Millennials (age 28 and more) drive around 3.5 miles, or 9 percent less, than Baby Boomers. Researchers analyzed daily vehicle miles traveled (VMT) by an average person from each generation and age group. national travel surveys to compare driving behaviors across continuous age groups for Baby Boomers, Generation X, and Millennials. Although some suggest they might just be slower in adopting previous trends, a recent study from the University of Texas at Austin suggests that they are a generation that prefers to drive about 8-9 percent less than Generation X and Baby Boomers, and that they might continue to drive less as they get older. The consumption choices and lifestyle preferences of Millennials-those born between 19-and their differences from those of the previous generations have repeatedly piqued academic and policy makers’ interests.
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