Earlier this year, we posted a report that today’s generation of up-and-coming drivers—so-called Millenials or “Generation Y”—are more interested in PCs, smartphones, and social media than, you know, actually meet family, friends, and potential mates in person via a quick drive.
That fear is not unfounded. According to analyst Itay Michaeli of the Citi Investment Research group, the number of vehicles per American household is dropping. This is confirmed by IHS Automotive, which state that the number of vehicles per home used to be 1.05 per driver in 2007. That figure dropped to 1.0 vehicles per driver in 2010 and .99 in 2010. IHS analyst Rebecca Lindland forecast that figure could drop to .96 by 2020.
Various conditions may be causing this trend beyond more accessible communication outlets. A major factor is simple economics: Gen Y and Millenials, crushed by bankruptcy, job loss, student loans, and tight job market, simply can’t afford any but the most base vehicles. Automakers have been particularly worried as gas prices have dropped but Americans stubbornly refuse to make more trips or purchase larger—and more profitable—crossovers and SUVs. Sales of vehicles are up nearly 15 percent compared to the same period of time of time last year. That’s the good news. The bad is that job prospects continue to be tight while uncertainty continues to wobble all major industries like housing. Citi reports that U.S. car owners have gotten rid of—and not replaced—one million vehicles since 2008, a first. Automakers fear Americans, especially the young, will continue to adjust to this new world where cars are an option, not a necessity, in their lives.
Source: Detroit Free Press