Selling cars to young adults under 30 is proving to be a real challenge for automakers. Unlike their elders, Generation Yers own fewer cars and don’t drive much. They’re likely to see autos as a source of pollution, not as a sex or status symbol as their predecessors did.
Motorists aged 21 to 30 now account for 14% of miles driven, down from 21% in 1995.
They’re more apt to ride mass transit to work and use car sharing services -- pioneered by Zipcar -- for longer trips. And car sharing choices are expanding, with car rental firms moving into the market, making it convenient for young folks to rent with hourly rates and easy insurance.
The rise in insurance rates, gasoline and overall vehicle costs have all played a role over the last decade in the shift. The fact that the tech industry is facilitating internet connectivity and social networking on almost every digital device imaginable also encourages more hands-free time to complete to necessary tasks the Gen Yers deem necessary as part of their daily routines. "You can text and surf a lot easier on the subway than a car," said technology consultant Patricia Fields.
The trend won’t cause car sales to tank, of course, but the generational shift doesn’t bode well for manufacturers and auto dealers, which for decades have counted on wooing young new drivers to their brands in hopes of cementing lifetime customer relationships.
Gen Yers are a big potential market: At 80 million strong, they represent the biggest generation in U.S. history. Baby boomers are a close second, but millions of them begin turning 65 next year -- an age at which car purchases drop off sharply.
“It’s a matter of mind-set far more than affordability,” says William Draves, president of Learning Resources Network, an association that studies consumer trends and provides education and training services.
“This generation focuses its buying on computers, BlackBerrys, music and software and views commuting a few hours by car a huge productivity waste when they can work using PDAs while taking the bus and train,” says Draves.
Moreover, in survey after survey, Gen Yers say that they believe cars are damaging to the environment. Even hybrid electric vehicles don’t seem to be changing young consumers’ attitudes much.
Although much of the climate change debate is largely up in the air, many Gen Yers still feel reducing pollution is a good thing in the long-term. They're actions certainly speak for themselves.