Automotive OEMs and Dealers have built brands by having the enviable advantage of having customer relationships that span generations. While transportation access is more important than ever, vehicle ownership is no longer a requirement for many of the next generation of drivers. Indeed, less than half as many 16-year olds have their driver’s license compared to 30 years ago, and the trend continues into their 20’s.
Here are 5 reasons why:
- Car ownership for younger people is expensive. Payments account for a higher percentage of income and insurance is very high.
- City living is expensive. Particularly in larger cities, where the jobs gravitate. Parking is also costly, and cities with good public transit mean owning a car often isn’t worthwhile.
- Millennials are digital natives. They are entirely comfortable with accessing their transportation needs through their phone.
- Younger people prefer renting / leasing to buying. The Annual Mobility Study found that 31% of 18-24-year-olds agreed that “In general, I would rather rent or lease expensive things than own them,” while only 24% of those aged over 65 agreed.
- Younger people aren’t inclined towards car ownership. The Annual Mobility Study found that 58% of those aged 18-24 agreed that “If I didn’t have to own a car, I wouldn’t,” compared to just 33% of those aged over 65.
For dealers, understanding this changing mobility requirement for younger people is exceptionally important to their future. Failure to grasp this means blocking out a whole new generation of customers. However, understanding and adopting new business models in shared mobility opens up a new world of opportunity that younger people naturally gravitate towards. For dealers who get this right, their future is assured.
Around the world, Ridecell customers are providing alternatives to ownership today. Check out these stories to learn more about urban transportation trends:
Author: Mark Thomas, VP of Marketing and Alliances, Ridecell