A new consulting firm study is raising a point that may seem hard for many Americans to accept.
Millennial’s, and other young people have become so, “take it or leave it about driving,” they are actually a large factor behind auto sales not growing at a faster pace.
In fact, it is estimated there are 5 million fewer car buyers today than five years ago. Not all of that is because of younger people putting off buying a car, there are also those giving up their license due to aging, however the young do play a significant role according to the study.
This is not the first time we’ve heard reports of this generation showing less interest in owning cars. The re-urbanization of America is giving more people access to public transportation. It’s the reason car sharing companies like Zipcar expect to see membership and revenue grow at a steady pace for the near future.
The driving force behind this is unclear. How much of that is disinterest in driving? And how much is the younger generation realizing the interest on a car loan, insurance expense and the daily costs of driving just doesn’t make sense for their situation? The answer is that actually that both reasons play a role in many younger people decision to drive or not.
Some say the economy is mostly to blame — that the younger folks aren’t buying because they’ve been particularly affected by the recession. In the scheme of this generation’s budget, a $12,000 Kia and a $2,000 Macbook Pro both count as major life purchase. Given the centrality of the web to everybody’s personal and professional lives, the computer (or heck, even a phone) may be the higher priority. Others say the trend could be part of larger social shift. The fraction of teen drivers tends to fall as a country’s level of Internet access increases. There’s also vivid, albeit anecdotal, evidence that the country’s tech-obsessed youth have all but forgotten about cars.
When this generation does consider a car, there is a consensus that younger buyers will want to get from A to B in a different kind of car. It must be more stylish. Performance is still important, but it must come wrapped in technology that appears more environmentally responsible. Younger buyers also seem more open to the trend toward smaller autos with more premium features — provided the cars look cool.
While automobile executives express confidence they will find products to appeal to the “millennial’s,” as they are known in marketing speak, the car companies also betray a level of anxiety.
In the end, the lack of interest in cars (and automobiles in general) by the millennial generation is the rational result of a combination of long-term trends and the profit hungry short-sighted mindset which characterizes the later stages of capitalism.
Do you see this being an issue of the future?
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