Women and millennials help lift SUV ownership to new heights

New data from Ford shows SUVs are popular with millennials. But what about Gen Z?
New data from Ford shows SUVs are popular with millennials. But what about Gen Z?
KAMIL KRZACZYNSKI / EPA

Ford Motor Company reported impressive SUV sales in February, with millennials and women helping to deliver what Ford called the best calendar year start in the automaker’s history.

Ford points out that SUV sales so far this year are up significantly from last year with 115,228 SUVs sold, a 16 percent increase from last year.

The Ford Explorer was notably popular among millennial consumers between the ages of 24 and 35 and among women, according to an analysis of new vehicle registrations in the U.S. from IHS Automotive. The research firm found the Explorer is the most popular midsize SUV among women buyers.

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Ford also reported increased sales of its Escape and Edge vehicles in the first two months of 2016.

Nationwide, the top-selling SUVs of 2015 were the Honda CR-V and the Toyota RAV4. Both vehicles were also very popular among women and millennials.

New England

Locally, Ford’s SUVs were not as popular as their competition last year. The Toyota RAV4, Honda CR-V and the Subaru Forester were the top three best-selling SUVs in Massachusetts, while the Ford Escape came in No. 10.

In Boston, Jeep SUVs were much more popular than Ford SUVs among consumers between the ages of 18 and 34. Three Jeep vehicles, the Grand Cherokee, Cherokee and Wrangler were among the 10 most popular SUVs with millennials. There were no Ford vehicles on the top 10 list for millennials in Boston.

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Why?

Increasing homeownership may be part of the appeal of SUVs among millennial and women shoppers. Ford points out that the median age for first-time homebuyers is 30 according to the National Association of Realtors.

This indicates the generation is moving on to another life stage.

“Millennials have begun forming families and those families are growing – in terms of the number of children as well as the size of those children,” said Erich Merkle, Ford U.S. sales analyst in a statement. “[The Ford] Explorer provides the space those families need today and tomorrow.”

Gen Z

But while millennial shoppers may be driving up SUV sales now, a separate report from Kelley Blue Book and Autotrader found future auto consumers from Generation Z (those currently between the ages of 0 and 17) will have very different car-buying habits when it’s their turn to shop for a new vehicle.

“Gen Z accounts for nearly a quarter (23 percent) of the population right now, and by 2020 this group will translate into $3.2 trillion in purchasing power, which is larger than the GDP of some small countries,” said Isabelle Helms, vice president of research and market intelligence for Cox Automotive, the parent company of Kelley Blue Book and Autotrader.

The survey found the vast majority of Generation Z owns or plans to own a car. Moreover, the survey found Gen Z holds very different priorities than millennials when purchasing their vehicles.

For example, the survey found a car that is environmentally friendly is more important to Gen Z than to previous generations of teenagers.

However, the survey also found that a vehicle’s price is more important to Gen Z than the vehicle’s environmental impact. About 43 percent of respondents said they preferred these models as a way to save money on gas, while only 30 percent said they were interested in preventing global warming.

Respondents named Ford, Chevorlet and Honda as their preferred vehicle brands.

Helms said the survey will mean the auto industry will have to adjust its strategy when it tries to get Gen Z to buy its products, but with 92 percent of respondents saying they want to get a vehicle of their own, Helms sees reasons for optimism.

“The best news from this research is that auto sales are not going to take a hit because of this generation,” she said. “In fact, it may prove to be quite the opposite. Their love for cars and driving is very much alive.”