A new study says Millennials may just want to own cars after all.
It’s become gospel that Gen-Y buyers simply don’t care about cars, that they’re happy to live at home with their parents simply tweeting and texting to friends. But a new study counters that Millennials would be quite happy to get new wheels – if they could afford them.
Though they may not have the emotional attachment to the automobile of prior generations, the report by Deloitte LLP argues that an overwhelming majority of those from Gen-Y still want to own a vehicle. Only one in 10 told surveyors that they don’t ever plan to lease or buy one.
“This is good news for carmakers, who already offer — or are bringing to market — many of the features Gen Y consumers most want in a vehicle,” said Masa Hasegawa, one of the principal researchers.
How to appeal to Millennials – and even younger Generation-Z consumers – was a frequent topic this past week at the North American International Auto Show in Detroit. Manufacturers have been looking for ways not only to bring vehicles down in price but also to appeal to a cohort of potential customers who consider the cellphone “the single most-important technology” they own, according to American Honda’s director of automotive operations Art St. Cyr.
(Nissan wants to crowdsource the design of its next Titan pickup. Click Here for more.)
Nissan designed the IDx NISMO with Millennials in mind.
Models like the 2015 Honda Fit subcompact are loaded with all sorts of high-tech gadgetry, the Japanese maker even adopting an Apple iPhone-like interface that allows its infotainment system to be operated with swipes and pinches. Meanwhile, Nissan showed off a concept vehicle called the IDx NISMO which, it suggested, was heavily influenced by vehicles one might see in a videogame.
“While Gen Y may not necessarily scrutinize horsepower, acceleration times or engine size, they do have clear needs, wants and desires, especially when it comes to remaining connected to all of their lifestyle technology while on the road,” echoed Deloitte’s Hasegawa.
Manufacturers also are targeting greener technologies, such as hybrids, plug-ins, pure battery-electric vehicles and even some new hydrogen fuel-cell-powered models, at Millennials.
(For a complete round-up of the news from the 2014 North American International Auto Show, Click Here.)
There are reasons to be worried. Studies by the University of Michigan’s Transportation Research Institute, as well as the Federal Highway Administration, show that teenagers are waiting longer than those from prior generations to get their driver’s licenses. A study by CNW Marketing indicates that almost 10% of American households have no vehicles at all, with an emphasis on those homes headed by younger consumers.
But the Deloitte study indicates that many are looking to get into the automotive market. Based on a survey of 2,000 Americans, including 677 from Gen-Y, three in five younger consumers expect to purchase or leave a vehicle within the next three years.
If they can afford one, that is, the Deloitte study indicating that for 80% of Millennials cost is the biggest barrier to ownership.
Unemployment has been plaguing Gen-Y – running nearly twice the national average in 2013 — but industry planners are hoping that as the economy recovers younger consumers will begin to benefit and find themselves able to join the ranks of new car buyers.
But to enhance the likelihood, makers are pushing out more lower-cost models, such as the new Honda Fit, as well as the Chevrolet Spark and Sonic, Ford Fiesta and Nissan Versa models. That could prove critical considering even more mature and affluent adults are struggling to keep up with recent surges in new car pricing. The average new vehicle sold in the U.S. hit $32,900 last month, an $882 increase year-over-year, and up a full $4,410 from December 2010, according to CNW Marketing.
Even more low-cost models could be in the works. Meanwhile, makers are looking for other ways to appeal to Millennials. The Nissan IDx NISMO and a similar IDx Freelow are designed to offer buyers lots of options to customize everything from body panels to headlights, something that plays well with Gen-Y, surveys show. The maker is studying ways to bring down manufacturing costs and could have one or more IDx models in production over the next few years, it says.
(Nissan plans to take IDx concepts from idea to reality. Click Here to check them out.)