Are Millennials Killing The Car Industry?

Where have all the drivers gone? Something shifted with regards to our driving behaviors during the mid 2000’s and we simply started driving less even though the population continued to grow.

So many different factors may have contributed to this decline: economic factors, gas prices, family dynamics, people working from home, and changes in air travel activity. General family dynamics have changed as well – younger people today simply don’t need to go as many places as we needed to at that age – their connected lifestyle has changed the entire concept of ownership and the need to physically go somewhere to acquire something is different. Want to buy something? It’s simply a click away.

Consider this statistic: Today’s 20-something Amercians drive approximately 20% less today that their parents did while they were in their 20’s.

The question remains though, what happens when this segment of the population ages, moves out of their parent’s houses, enter the professional workforce and start their own families? They will eventually need vehicles. And when they do enter the market it could create a much needed buying spree. Or, will their historical activities and future needs create a new standard of automotive shopping behavior and disrupt the retail industry even further?

The projections for the future see three possible scenarios, according to a research report from The Frontier Group and the US PIRG Education Fund. These scenarios could vary between: Drivers will re-enter the market and driving will pick up to near-normal levels, drivers will continue to maintain current activities and the trend will be an enduring shift or there will be a full reversal and driving will continue to decline. One contributor to that decline may be the introduction of ride sharing services like Uber, ZipCar and other companies providing cost effective, convenient ownership alternatives. The Frontier Group is quick to point out that all three of these scenarios predict the future outcomes to be below the anticipated historical trend line.

So, regardless of where the trends actually fall dealers will be faced with a different marketing challenge: Connecting with a segment of automotive shoppers who have different needs and an entirely different experience with online shopping and ownership.