L2 released today the Digital IQ Index: Auto, which quantifies the digital competence of 42 automotive brands. Last year was a relatively good year for the auto industry; automakers sold $15.6 million cars and trucks in the U.S., the highest since 2007. But the industry has undergone a fundamental change. Millennials (born between 1980 and 2000) are exploring other transportation modes such as rideshares and car rentals, and are more open to using public transit than their parents. The percentage of 17 to 24-year-olds with a driver license has dropped below 70% since the 1950’s.
Digital is the key to capturing these Millennial consumers, as they are more inquisitive and have more sources than ever. Four in five new vehicle buyers use the internet to research a future car purchase, and once they move offline they have already decided what car to purchase. They only visit 1.6 dealerships compared to five a decade ago, and test-drive one car to confirm their selection.
That says a lot about where auto brands should invest. Many have already adapted to the new era; the industry’s $6 billion ad budget (second after financial services) shifting toward mobile and responsive ads. However, that’s not enough. More than 52% of customers who walked into a dealership close to making a final purchase and did more research on their phone, decided to visit another dealership. For more on how auto brands can reach consumers and nudge them to purchase, download an excerpt of the L2 report.