Generation YEnlarge Photo
If you read our sister sites, you already know that shoppers over 50 account for nearly two-thirds of all new car purchases. What you may not know is that the stats on shoppers under 35 -- better known as Generation Y or Millennials -- are in the tank, and they may not improve much.
When news first broke about the buying power of the AARP set, we found it a little shocking. After all, every other marketing headline seems to crow about companies using Facebook, Foursquare, and Twitter to sell goods to young people. No one talks much about marketing to Boomers -- much less their retired elders.
But after a little reflection, the data made sense. Boomers (and to a lesser degree, Gen Xers) have enjoyed a fairly good job market, and they've had the chance to stash cash for big purchases. Gen Y, on the other hand, has had a tough row to hoe, job-wise; internet billionaires like Mark Zuckerberg are the exception, not the rule, meaning that Millennials can't pony up at the cash register like their elders. And with shaky job prospects, many are unwilling to take on big car loans.
That's not to say that Millennials aren't buying -- they are. It's just that they're not buying so many big-ticket items like cars. According to a report from MSNBC, Millennials are less interested in owning a set of wheels and more interested in gadgetry -- phones, tablet computers, gaming consoles, and so on.
But surely, they'll come around, right? Surely, once they get married and have kids, they'll want the convenience of a car to get from Point A to Point B? Probably so. But that doesn't change the fact that an important demographic -- 18 to 35 year-olds -- could remain a weak sector for automakers. It also means that car ownership may lose luster as one of America's great rites of passage for young adults.
The social factor
Cars offer freedom. Part of the reason that owning a car is such a big deal for young people is that it gives them the freedom to move around. It offers a level of mobility and independence they equate with being grown-ups.
But social media has changed that. With today's teens sending scores, if not hundreds of texts each day -- not to mention accessing Facebook, Twitter, and other social media outlets -- the teenage social life that used to take place in malls and parking lots has moved online. Sure, they still venture out to football games and rock concerts, but they don't need to be constantly in the company of friends to feel connected. And so, cars have become less important.
Furthermore: although cars offer freedom, they also offer dependence -- dependence on jobs, on income, on parking. Given the uncertainty of the economy and the sometimes transient nature of young people, especially those just out of college, many see cars and car loans as potential liabilities
And of course, we can't forget the green movement. Millennials have grown up in an increasingly eco-minded environment, and cars are often seen at odds with it.
Is this a trend?
Japanese marketers noted this very same trend almost two years ago. It wasn't that Japanese youth were thinking about cars differently; they weren't thinking about them at all. So perhaps it's part of a global shift away from the notion of car ownership as a measure of success. (That would help explain the ever-growing popularity of Zipcar and other car-sharing companies, too.)
But we'd be remiss if we didn't consider the source of all this information. Just as we cast doubt on the report touting the buying power of shoppers 50+ (it was compiled in part by AARP Media, which has many reasons to make older Americans feel good about themselves), we have questions about the MSNBC piece, too. Clearly, it's not a scientific study, and even the quantitative data it cites is in conflict with that dug up by AARP Media: the latter said that shoppers under 35 account for just 12.7% of new car sales, while MSNBC quotes a much higher figure of 27% from CNW research.
Until someone publishes reliable stats on the matter, all we know for sure is that (a) the auto scene is changing and (b) social media is booming. We've seen those two trends interact before -- namely, with new social technology from Ford, GM, and others -- and we wouldn't be surprised if they had other effects, like changing the public's attitude toward car ownership.