Back during the global financial downturn of 2008, 2009, and to some extent into the early part of this decade, there was much speculation about the idea that there was a behavioural shift underway and millennials would become the “de-ownership” generation, relying instead on transit, bikes, skateboards or their feet to get around. We saw some bandwagon jumping forecasters labelling millennials, those born between the 1980’s and 2000, and also known as Generation Y, as the first generation who would actively avoid car ownership and single-handedly bring about “the end of the car culture.”
Well, that certainly hasn’t been the case. A recent and surprising study conducted by Strategic Vision has shown that millennials actually love cars as much as their predecessors. With the economy improving and as the generation matures, it has become obvious that the need for a vehicle of their own is still apparent, particularly in places like British Columbia. The study proves the desire to own one’s own car has not been phased out, and although the purpose of owning one has somewhat changed throughout the years, it is still an important rite of passage for many.
While car-sharing services such as Evo, Car2go and Uber are definitely on the rise, they tend to be used for more specific reasons like going out for the evening or to avoid a costly cab trip. Millennial’s are now known to be purchasing vehicles so frequently, that they are second only to baby boomers, who come from a generation of updating their vehicles every few years.
New technology and apps are also shaping the way people purchase their vehicles. With the ability to research just about everything online, most car buyers know exactly what they want before they step foot into a car dealership to make their purchase.
This has increased the number of car companies selling cars at fixed prices. Tesla has long been an advocate for fixed prices and has made a practice of it, and last year Costco signed a deal with General Motor dealerships to sell 465,000 vehicles at a fixed cost.
It’s no surprise that millennials are choosing to go greener with their choices with a majority leaning towards Electric Vehicles (EV’s) or Hybrids. With over 20 EV models available to choose from in the current market, prices that are actively competing with gasoline-powered equivalents and the look of vehicles becoming increasingly attractive, it is easy to see why they are popular amongst this generation.
With millennials closing the gap on baby boomers as the largest living generation, auto retailers are paying close attention to what the Gen Y’ers value, how they conduct purchases and what ultimately persuades them to buy. Where a quality car radio was good for the baby boomer, millennials want full smartphone functionality. This growing consumer powerhouse will continue to drive manufacturers to increase the technology initiatives in automobiles, something that is great news for all consumers.
Blair Qualey is President and CEO of the New Car Dealers Association of BC. You can email him at [email protected].