90% of millennials still want a car
Are young people abandoning car ownership for ride-hailing and other forms of ‘usership’? Yes, says the accepted wisdom. No, say two recent surveys: millennials still love owning cars. That’s good news for OEMs. And bad news if you’re counting on a quick shift to a new mobility paradigm.
Experts and studies repeat the same mantra over and again: young people have fallen out of love with cars. In a trend often likened to the rising popularity of Netflix and other subscription services, they’d much rather pay a little for using vehicles than pay a lot for buying them; and for environmental reasons would like to avoid them altogether.
That’s the thinking that underpins predictions of an imminent paradigm shift, towards a future dominated by both shared mobility (car-sharing, car-pooling, ride-hailing) and multimodal mobility (combining car usage with public transport, walking, cycling and other modes of transportation).
The big loser in this model: car ownership. But, as two recent surveys strongly indicate, the millennials that are supposed to be turning away from car ownership actually like the concept.
A survey by global consultancy Duff & Phelps suggests EU millennials still have a strong purchase intent, which is good news for the increasingly struggling car industry.
Independence and convenience
The ‘Millennials and Auto Trends Report’ polled 2,150 millennials (23-38 years old) from the UK, France, Germany and Italy. Some of the results:
- Most (79%) already own a car and 50% of those who didn’t, expect to own one within five years.
- A huge majority (83%) feel owning a vehicle is a necessity.
- A large majority feel owning a car is necessary for independence (77%) and convenience (66%).
- Most (82%) use ride-hailing or car-sharing services ‘never or rarely’ (i.e. less than once a week).
- While most (53%) still prefer petrol or diesel engines, more than one in three (39%) is considering a hybrid or full-electric for as their next vehicle.
- The most common priorities when buying a car: price (70%), fuel efficiency (59%), style (34%) and safety (30%).
So, around 90% of millennials either already own a car or plan to own one in the next five years; and over 80% never or rarely using ride-hailing and car-sharing services.
These results suggest factors such as environmental awareness, urbanisation and the availability of public transport and ride-hailing – often cited as reasons not to own a car – are not having a major impact.
The traditional behavioural pattern of owning rather than ‘using’ a car may be more persistent than some futurists have predicted. Similarly, shared and multimodal mobility may not break through as soon or as massively as they think.
A recent study in the US, by insurance quote provider QuoteWizard.com, confirms the EU survey's findings and throws some extra light on the motivation behind the mobility choices of (American) millennials.
Yes, millennials are more likely to opt for public transport and shared mobility than older generations. But that's more because of circumstance than out of choice, the study suggests.
Millennials are less likely to have children and more likely to live in urban areas. This makes having a car less advantageous than if you're a parent in suburbia (or in more rural surroundings).
The millennial generation also has other spending priorities – be it travel or paying off student debt (at an average of $33,000 per student loan).
Financial constraints are why millennials are more likely to drive sedans than the average consumer, who increasingly goes for crossover SUVs. The top three millennial vehicles are: the Honda Accord, Nissan Altima and Honda Civic.
While it's true that millennials priorities 'experience over possessions' (i.e. car usage over car ownership), the evidence is that there is no real aversion towards car ownership – downsizing or postponing car ownership is just an easy way to cut cost. Especially since corporate benefits increasingly include free public transport as a mobility option.
The QuoteWizard.com study predicts that, as millennials get older, settle down and start families, they will show an increasing interest in owning (bigger) cars.
As both studies suggest, most millennials still love the idea of car ownership. The imminent death of car ownership has been greatly exaggerated. The shift to a new mobility paradigm will likely take a bit longer than many experts think.