Josh Allan Dykstra wrote a piece in Fast Company a couple weeks ago suggesting Generation Y, also affectionately known as “Millennials” (I wonder if they hate that dorky label?) aren’t really interested in owning anything, especially cars, citing The Atlantic‘s article “Why Don’t Young Americans Buy Cars?”
By the way, have you heard the news? The motor city, Detroit, is apparently becoming a Suburb. The once thriving automotive manufacturing industry employing hundreds of thousands of people in the United States and Canada now seems to be in a contracting state of diminishing growth—everywhere except perhaps China.
So the question remains, what’s causing young people to forego car ownership? Dykstra goes one step further and makes a rather sweeping generalization:
“Generation Y doesn’t seem to enjoy purchasing things.”
Really? That’s an interesting remark. But is it a fair assessment of this group’s buying behaviour?
If we’re talking specifically cars and “car ownership” among Gen Y (that is, people born in the late 70′s and early 80′s) perhaps it’s worth considering this cohort’s current predicament, or some of the factors influencing the purported decline of car culture:
- graduating with a substantial student debt load.
- entering one of the worst job markets in history.
- ubiquitous digital technologies, particularly ‘cloud-based’ services, curb the desire to own physical products (e.g. books, CDs, set of winter tires).
- environmental consciousness is higher among Gen Y’ers than previous generations (e.g. prefer lattés and mobile apps over oil changes and windshield washer fluid top-ups).
If you feel I’m making a few more sweeping generalizations like Dykstra, then go ahead, call me on it. I’m no demographer.
But let’s be honest, cars can be bloody expensive. Gas, maintenance, insurance, parking, speeding tickets (if you’re so unlucky) —the whole 9 yards. Ownership can be a severe cash drain for younger people who typically wield the least amount of disposable income for such purchases. If you’re fresh out of university and only able to find barista gigs at the local coffee house while trying to pay off a hefty student loan then buying or leasing a new vehicle is almost certainly one of your last priorities. Dead last in fact, well behind food, clothing, and paying the landlord.
Consider also the growing number of twenty-somethings living at home with their parents saving for the down-payment on their first condo or house who are perfectly ok using their parent’s cars.
The other element at work here (bullet points 3 and 4) relates to a mindset I wouldn’t even characterize as strictly a Gen Y’er thing at all, but more a direct result of the digital economy. It’s (drum roll please) the rise of collaborative consumption that’s killing car sales. The idea we can use technology in more socially collaborative ways, and in the case of cars, more cost effective and environmentally sustainable ways is basically built-in to the Net. Social media, sharing, and cars. Brilliant! Services like ZipCar, the clever 24/7 car sharing service, have many of the established rental giants quivering in their boots.
Back to Dykstra’s piece, I feel there’s one statement that really seems to resonate:
“The concept of shopping has shifted from owning stuff to buying into new ideas.”
This statement should intrigue marketers.
What ideas have you been buying into lately?
Image source: James Byrum