Some auto manufacturers are scratching their heads over the dropping numbers of young people who are looking to buy a car. What the industry does not see is that this generation (meaning, the Millennials) is more interested in gadgets and personal products than in cars. What could be the reasons for this?
Unstable Economy – The proportion of vehicles sold to people between 18 and 30 years old has significantly dropped these past years, according to research about the auto industry. One of the reasons could be the unstable economy. According to the National Business Review (NBR), some economic factors like high gas prices, stagnating wages, and re-urbanisation could be the game changer for millennials. With more important things to spend for, purchasing a car is not a priority.
Financial Security – Young people are seeking ways to secure their finances to create a buffer for future monetary needs. Loan providers, such as Rapid Loans, are familiar with the horror scenarios that millennials want to avoid, such as making a car investment on top of their college loans and ending up buried in debt right after graduation. Short-term loans, however, may provide the buffer they seek or the amount for the vehicle purchase.
Gadgets over Wheels – Millennials are turning to items that provide maximum convenience at a low price. This is why their desire for technology and devices like smartphones and tablets are reshaping the retail space. Millennials were born with technology and they believe they need it to connect with the family, search for jobs, get their work done, and obtain information, especially to shop online.
Car manufacturers are in a mild state of panic as the decline continues among the youngest potential buying population. Findings of the latest study of the College of Millennial Consumers (CMCs) partly explain the phenomenon. Millennials aged 17 to 25 are, by nature, open-minded and practical – perhaps even more so than the generations of their parents and grandparents. Instead of purchasing cars, this generation prefers to have a new set of services that will allow them to have access to such products without the burden of ownership. An author and economist, Jeremy Rifkin, predicts that 25 years from now, car sharing will be the norm.
Millennials are a generation of consumers who do not feel the need to define themselves by their cars. Car manufacturers should strive to have a better understanding of the interest and behaviour of millennials so they could engage more with this target market.