It’s become conventional wisdom that Millennials would rather text their friends than drive over to visit, but a new study by youth-oriented MTV suggests that, as is often the case, conventional wisdom has things upside down.
A survey of 3,600 Millennials reveals that three out of four would give up their social media for a day, and texting for a week, rather than hand over the keys to their cars. One reason more teens aren’t rushing out to drive, the study suggests, is that new licensing rules make it harder for them to get behind the wheel.
“Millennials, like other generations, see car ownership as a way to establish independence,” Berj Kazanjian, Senior Vice President of MTV’s Ad Sales Research, said at a presentation of the new finding during the annual National Automobile Dealers Association convention in San Francisco. “Millennials,” he added, “also see car ownership as a way to craft their unique adult identity.”
The study should come as welcome news to an auto industry struggling to cope with dramatic changes that could threaten its traditional business model. Among the many challenges are increased urbanization, new car-sharing services that provide vehicles on demand without the hassle of ownership, and a sharp reduction in the number of driving age teens who have gotten their licenses.
(Why are most automakers sitting out this year’s Super Bowl ad-fest? Click Hereto find out.)
A recent study by the University of Michigan Transportation Research Institute found that only 75% of 19-year-olds were licensed in 2008, down from 87% in 1983. A separate 2013 UMTRI study indicated Baby Boomers between the ages of 55 to 64 were 15 times more likely to buy a new vehicle than Millennials between the ages of 18 and 24.
“We’re definitely seeing trends, especially in the U.S. and other urban areas, where people are putting off that (new car) purchase,” General Motors CEO Mary Barra said during an appearance on CNBC last week.
Industry observers point to a number of factors:
- Graduated state licensing programs that often restrict when, where and how a teen may operate a vehicle play a factor, according to the MTV study;
- Higher unemployment rates that make it more difficult for Millennials to afford a car;
- Increased student loan debt that adds to the financial burden;
- Uber, Lyft and various car-sharing programs that offer alternatives to ownership;
- A return to urban living that makes it both less necessary and more difficult to own a vehicle.
(Ford opens new Silicon Valley tech center – targets new tech for young buyers. Click Here for more.)
But not everyone is convinced that Millennials are ready to walk, bike or ride mass transit, rather than own a new vehicle. Ford’s President of the Americas Joe Hinrichs has suggested that Gen-Y is likely delaying, rather than abandoning the goal of vehicle ownership.
The MTV study appears to support that argument, indicating that once Millennials do get behind the wheel, they don’t want to give their cars up. If anything, it suggests they may be more, not less, passionate about driving than Boomers. A full 70% replied that they “like driving a lot,” compared to 66% of Gen-X respondents, and 58% of Boomers. Meanwhile, 85% said they look forward to eventually owning the car of their dreams, compared to 72% o Gen-Xers ad 59% of Baby Boomers.
That said, the survey did reveal some concerns. For one thing, 87% said they wanted a more transparent car buying process, with 80% wishing it would take less time to buy or lease a vehicle.
“There is a tremendous opportunity to work with Millennials and the industry needs to do better at reaching them,” said MTV’s Kazanjian.
He also issued a warning to brands that don’t hear what Millennials are demanding, stressing that, “This is the first generation in history that can literally kill a brand with the push of a button.”
(Honda planning “dramatic shift in design.” Click Here for the story.)
There are some questionable “conclusions” being reached from the survey results. For example just because those “millennials” who currently own a vehicle would give up texting, etc. for a week to keep their vehicle in no way = “millennials” as a group are as serious about buying/owning a car, as previous generations. You can’t make a rational argument for that position based on the original survey question. You need better questions to reach that conclusion.
What is pretty obvious is that many “millennials” are not in such a hurry to purchase an auto based on actual sales numbers as best can be determined at this point in time. In addition the trend could change at any time if it becomes “cool” to own a vehicle, which for most generations it has been. The millennials have been distracted by electronic toys and have not discovered the independence associated with owning your own vehicle, that most people desire.