Millennials (25-34 year olds) prefer owning to renting cars: implications for strategic management

ST. LOUIS: A majority of US Millennials see car ownership as "extremely important" and a significant proportion regard car rentals as essentially an extended test drive a February 2014 survey has shown.

Enterprise Holdings, the car rental and fleet management business, surveyed 1,363 people aged at least 25 who had rented a car within the previous six months and who also currently owned a car. It found that 79% of 25-34 year olds thought owning a car was "extremely important" to accomplishing their daily work/life tasks, and this proportion was similar among older groups.

While most customers (71%) reported that a positive rental experience had changed their perception of particular makes or models, among millennials, that percentage shot up to 88%. This provides strategic managers with the motivation to seek forward integration by car rentals to start selling the makes that made the best impression to millenials.

"Millennial respondents were particularly influenced by the rental experience, indicating that car rental is one of the best ways to introduce an automotive brand to the next generation of new car buyers," said Kurt Kohler, senior vice president, acquisition and remarketing, Enterprise Holdings.

Care rental involved more than simply getting from A to B. More than half of this age group (57%) agreed that their choice of car rental reflected their own personalities, values and style. And 53% said they chose a rental car based on the desire to try something new. This was significantly higher than the overall average where around one-third said they wanted to rent something "completely different" to what they drove at home. This makes the rentals a key source of information for strategic managers in the automotive industry. Car rental companies would contain the information that they’d need to target the market better. Backward integration could be advised where the car rental services would basically provide test drive opportunities and influence sales. A more pragmatic approach would be to form strategic alliances with car rental companies.

Marketers will also be struck by the finding that 28% of Millennials reported that a rental experience triggered a decision to look for a new car to buy. Overall, more than half (58%) of those surveyed said they had considered a car to purchase based on renting it. That figure rose to 65% among Hispanic respondents.

Data sourced from PR Newswire; additional content by Warc staff and http://expertresearchers.blogspot.com/