To buy a car or not to buy a car.
It’s the question of the millennium – or is that the millennials?
Considered for years to be the generation that could kill off driving as we know it because of their reported lack of interest in car ownership, the millennial tide apparently has turned.
“As the generation born between 1981 and 1996 begin to reach their family formation years, they are getting licensed to drive at the highest rate in 40 years,” said a study by Benchmark Company and reported recently by Bloomberg news service.
“That’s good news for automakers that have fretted over young Americans spurning the rite of passage that is getting one’s license at age 16,” the study said. “Millennials have simply delayed that step.”
Indeed, Bloomberg suggests, “Millennials Could End Up Being a Boon to the U.S. Auto Market.”
The Truth About Cars website goes a bit further questioning whether “Millennials Now [Are] Positioned to Save U.S. Auto Market” in a recent headline. “Millennials never actually hated cars. They’ve simply been, on average, too poor to harness the same purchasing power of their ancestors.”
It seems to be the same dynamic that resulted in millennials putting off other major life decisions like getting married, having kids and buying a home, according to the website.
Making a big impression
Apparently all the fuss was much ado about nothing.
“The first millennials reached [age] 35 in 2016, toward the beginning of the auto industry’s record five consecutive years of at least 17 million U.S. vehicle sales,” Bloomberg reported. “Traditionally, license rates begin to peak when people reach their mid-30s and millennials are no different.”
“We believe underlying demographics support normal demand of 16.5 to 17 million units annually over the next five to 10 years,” Benchmark’s auto analyst wrote in the report, which predicted that “the key demographic of people aged 35-44 years continues to grow until 2034.”
“The impact on the auto sector from the millennial generation could be as great as the impression the baby boomers had on the industry in the 1980s,” the analyst wrote.
Surprising survey results
WardsAuto also reported on a survey of more than 2,000 millennials, about a quarter of whom live in the United States, in which the company conducting it was surprised by their own findings.
Because of the perceived environmental consciousness and thrifty nature of the millennial age group, and the increasing availability of options such as ride-hailing and public transportation, “we went into this thinking there may not be a (positive) response by millennials in terms of car ownership,” Mark Kwilosz of the consulting firm Duff & Phelps told WardsAuto in a recent article.
“What we found was actually the complete opposite,” said Kwilosz, an auto industry expert.
“We still think there’s a place for (ride-hailing), but it does appear that owning or leasing a car, for this generation, seems to have significant value,” Kwilosz told WardsAuto.
The more things change
“Simply put, it’s all but impossible to count the number of articles condemning millennials for purported disinterest in cars or driving,” wrote James Gilboy at The Drive automotive website. “As anyone who has actually bothered to ask the question would know, however, [millennials] are no less interested in America’s favorite form of transport than their predecessors.”
Millennials are “maybe starting to see the value of car ownership, now that they have families and now that they need to drive around their kids, potentially, and taking them to sporting events or other activities,” said the Duff & Phelps auto industry expert.
That’s a long way from the nightmare scenario we’ve read for years about millennials.