By Ryan McGreal
Published August 08, 2012
Yet another newspaper article is exploring the fact that young people just aren't that into cars. A recent essay published in Wheels, the Toronto Star's automobile pull-out, reports concern by the auto industry that young people are buying fewer automobiles.
A combination of lower wages for the youngest workers and the generation's tendency to favour gadgets over cars may cap average U.S. auto sales at about 15 million annually, said Dan Luria, a labour economist at Michigan Manufacturing Technology Center in Plymouth, Mich. The peak for sales was 2000 at 17.4 million cars and light trucks.
"Now, technology not only competes," Luria said, "it competes and wins."
This is already turning up in sales numbers. Young drivers used to account for 17 percent of auto sales, but that rate has declined to 11 percent this year, accounting for the 2.4 million unit drop in annual sales since 2000.
It's not just that young people aren't driving cars, either. The share of 20-24 year olds with drivers licences has fallen from 92 percent in 1983 to 81 percent in 2010.
To be sure, part of the reason is that young people have less money to spend on an automobile. However, they are choosing to spend the money they do have on communications technology instead of a car.
Smartphones, laptops and tablet devices compete for their dollars and are higher priorities than vehicle purchases, said Joe Vitale, an automotive consultant with Deloitte.
Financing, parking, servicing and insuring a vehicle all add up to a commitment that cash-strapped Millennials aren't ready to make, he said.
"A vehicle is really a discretionary purchase and a secondary need versus an iPhone, mobile phone or personal computer," Vitale said.
Between ubiquitous communications technology that is incompatible with driving and a shift toward more urban living, Generation Y consumers neither need nor particularly want cars the way their parents did.
You must be logged in to comment.
There are no upcoming events right now.
Why not post one?