Younger Consumers Delay Driving; Confound Car Manufacturers

by Don Elliott on July 23, 2012

Whether automobile manufacturers will admit it or not, interest in owning a new or used car by younger buyers appears to be declining.

In a new study by Michael Sivak, a research professor at the University of Michigan Transportation Research Institute (UMTRI), teenagers are waiting longer to obtain a driver’s license and therefore delaying the first car buying experience.

“It is possible that the availability of virtual contact through electronic means reduces the need for actual contact among young people,” says Sivak. “Furthermore, some young people feel that driving interferes with texting and other electronic communication.”

Sivak’s team compared driver’s license records from 1983 to 2008. About 46 percent of 16-year-old drivers had their driver’s license in 1983 compared with 31 percent in 2008. The drop continued throughout the teen years with 19-year-olds slipping from 87 percent to 75 percent during the period. In a separate study done by UMTRI, researchers discovered that in 2010, the 19-year-old group had slipped even further with 30.5 percent of the 19-year-old group without driver’s licenses.

Auto manufacturers, car dealers and automotive repair shops are beginning to shift their marketing efforts to rekindle enthusiasm for car ownership with young buyers. Social media, online advertising and promotion, and the gaming industry are all new targets for auto industry advertising dollars, shifting significant dollars away from more traditional television and print media. The debate over the effectiveness this shift is still to be determined.

As Sivak points out, “The less car-centric attitudes of millennials will eventually require policymakers to allocate more resources to public transportation over highways.”

At the opposite end of the age spectrum, baby boomers still cherish the used car value inherent with car ownership through means of proper car maintenance and having a driver’s license. According to the UMTRI study, drivers 70-years-old and older comprised 10% of the drivers on the road in 2008, the largest of any age group. In 1983, 19-year-olds comprised a larger percentage of drivers on the road than the 70+ drivers. In 2008, that had changed with the 19-year-olds representing less than half of the number of drivers on the road compared to the 70-year-old group.

AARP and J.D. Power also conducted a survey to determine car ownership trends. They discovered that consumers 50 and over accounted for 62% of new vehicle purchases last year. Compare that to 39% in 2001. It is clear that the baby boomer generation has embraced car ownership throughout their lives, providing the best market for car manufacturers in today’s market. The problem, of course, is that designing cars for older drivers presents a problem for the future of the automobile industry.

Who will buy the cars in twenty or thirty years and what should they look like? Car designers have a dilemma that only time and technology can sort out.

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