Monday, March 26, 2012

The Millennial Generation of Lost Car Buyers. Those in their 20s are Bewildering Car Makers as they Show Little Desire to Own a Car.

The Millennial generation, those born in the 1980s and 1990s, are bewildering car manufacturers as, in contrast to previous generations, they do not seem nearly as interested in buying or owning a car.

At a conference last year, Toyota USA President Jim Lentz said the following:

"We have to face the growing reality that today young people don't seem to be as interested in cars as previous generations. Many young people care more about buying the latest smart phone or gaming console than getting their driver's license."

Indeed, less than half of potential American drivers under the age of 19 had a license in 2008. This is down from a rate of 66% only a decade before. But the important questions for auto-makers is whether they are buying less cars and not obtaining their licenses because of money and the economy, or because of a genuine shift in their tastes, preferences, and priorities.

In particular, the Millennial generation is known for delaying adulthood and its hallmarks. They are delaying marriage, delaying moving out, delaying getting full-time jobs, and now delaying purchasing auto-mobiles and houses.

Interestingly, in The Atlantic, it is noted that the Millennial generation has a rising preference for urban living, in contrast to their parents' desire to live in sprawling suburbs. If this is true, there will be a large dent in auto-mobile sales as this generation and their children grow older. Expanding suburbia after the end of World War II was a key contributor to the growth of auto-mobile culture in North America, and if the suburb begins to wane, so too will car sales.

So how to increase car sales? The Millennial generation often loves fun toys that look cool, more than they appreciate a product's practicality. Engineer cars that make them feel like they are somehow rejecting the idea that they have to be responsible or grow older. Make a fun car with lots of gadgets, and one that helps them to identify more with a culture that rejects the conformity of previous generations for a new... while, conformity. But one that this time is so self-concious and worried about conforming that it desperately tries to be different and unorthodox for the sake of it.

Will this work? Perhaps not, but watch closely and you will see Ford, GM, Toyota, Chrysler, Honda, BMW, Volkswagen, Mercedes, and others beginning to fall all over themselves trying to preach unconformity and difference to the lost generation of car buyers.

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