Millennials, Gen Z Transform Mexico's Auto Market J.D. Power

The Mexican automotive market is undergoing significant transformation, driven by the growing influence of Millennials and Generation Z, prompting automakers to rethink their sales and aftersales strategies to meet the evolving demands of younger consumers.

According to J.D. Power’s 2024 APEAL (Automotive Performance, Execution, and Layout) Report, Millennials now account for 64% of vehicle buyers in Mexico, while Generation Z make up 16% of the market share.

“In sales and service, we are using the same processes we used with our grandparents. These new generations will not forgive us for that kind of follow-up,” said Gerardo Gómez, Managing Director, J.D. Power Mexico.

For younger buyers, the vehicle itself and the sales process are critical to purchasing decisions. The report shows that 45% of purchasing importance lies in product features, 35% in the sales process, 15% in dealership staff interaction, and 5% in aftersales service. This underscores the need to establish customer relationships early in the sales process.

Once a purchase is made, customer satisfaction depends primarily on the product, which contributes 50% to the satisfaction score. Aftersales service accounts for 25%, staff interaction for 20%, and the sales process for 5%. These findings highlight the importance of product quality and post-purchase experience in building customer loyalty, with the sales experience playing a lesser role.

Frequent service visits among younger consumers further emphasize the need for effective aftersales strategies. Generation Z accounts for 20% of service visits, while Millennials represent 62%. This trend, potentially linked to younger drivers’ inexperience or preference for entry-level models, underscores the importance of personalized and efficient service.

“If brands don’t adapt, they risk losing the market. While 80% of processes can be standardized, the remaining 20% must be tailored to specific customer needs—whether male, female, young, or older,” Gómez noted, stressing that tailored aftersales services are now critical for market success.

Despite a slight decline in emotional satisfaction, Mexican vehicle owners maintain a stronger attachment to their vehicles compared to owners in the U.S. and Canada. The 2024 APEAL index for Mexico stands at 889 points (on a 1,000-point scale), 42 points higher than in the U.S. and 185 points above Canada.

“Satisfaction among owners of both luxury and volume vehicles has declined year-over-year, especially in comfort and fuel economy. This is partly due to modern vehicles, even entry-level models, having complex technologies that may malfunction or be challenging to use. Still, owners overall enjoy and appreciate their vehicles,” Gómez added.

J.D. Power’s studies highlight a clear link between dealer service experience and emotional satisfaction. Brands delivering superior dealer service report higher emotional satisfaction among customers. Japanese (899) and South Korean (896) brands top the satisfaction index, while Chinese brands (812) trail in both service and emotional satisfaction.

Electric vehicles (EVs) also boost emotional satisfaction. Owners of hybrid, plug-in hybrid, and fully electric vehicles report 30 points higher satisfaction (918) compared to gasoline or diesel vehicle owners. Key categories driving this satisfaction include fuel economy (+51 points), infotainment (+37), engine and transmission (+35), safety (+34), and handling (+30).

Among luxury brands, Mercedes-Benz ranks highest in emotional satisfaction with a score of 932. Toyota leads volume brands with 907 points, followed closely by Honda (905) and Mazda (902).

The 2024 APEAL index for Mexico is based on responses from 6,740 owners of 2021–2023 model vehicles. The study evaluates emotional attachment and enthusiasm across 10 categories, including engine and transmission, handling, safety, fuel economy, comfort, exterior design, ease of entry and exit, start-up experience, infotainment, and interior design.