Millennials: it turns out they’re just like you. They want many of the same things anybody wants: They’d like to own a home and retire in comfort, and yes, maybe even have a car someday.
The only real difference is that many millennials can’t afford such bougie luxuries, until now.
Despite so many panicky predications to the contrary, sleepless nights in German automotive boardrooms and at least one failed millennial car brand – R.I.P. Scion – it turns out millennials are, finally, buying cars.
“The millennial generation, the group of people that we were told, 10 years ago, hate buying cars and will never buy cars, in about five years they'll buy more cars than their boomer parents,” said J.D. Ney, head of J.D. Power’s Canadian automotive practice, speaking during the third annual Globe Drive Mobility Summit.
The total number of 15 to 19 year-olds in Canada has stayed relatively steady over the past 10 to 15 years, but the number of drivers in that age group has gradually increased, said Peter Hatges, automotive sector leader at KPMG Canada, who also spoke onstage during the Mobility Summit.
Are you a millennial? You are if you were born between 1981 and 1996, according to a Pew Research report. That puts me roughly in the middle of what has now become Canada’s largest generation.
“The cost of living, certainly in major urban centres in Canada, is really expensive to [young people] so that forces a delay in the purchasing of larger ticket items,” Ney said. That car-buying delay makes sense; it mirrors delays in other areas: moving out of their parents’ house later, buying a house of their own later and having children later. It’s all about money, or the lack thereof.
Economist Gray Kimbrough analyzed U.S. Federal Reserve data to chart the stark difference in generational wealth – assets such as homes and investments minus debts and mortgages. His depressing chart went minor-league viral on Twitter and was covered by major news outlets.
Kimbrough’s research shows that by the time the median baby boomer was 35 years old, that generation owned roughly 20 per cent of the America’s wealth. The median millennial isn’t quite 35 yet, but we barely register as a blip on the graph, owning a paltry 3 per cent of the wealth.
The generational wealth gap in Canada isn’t quite so stark, but Canadian millennials are carrying significantly more debt than prior generations, according to Statistics Canada.
Don’t say “avocado toast”; there aren’t enough avocados in the world. The reasons for the generational wealth gap have been well documented: the Great Recession, high student debt, lower relative wages, unaffordable rent and housing, and on and on.
You may want to sit down for this next fact, but the oldest millennials are about to turn 40. They may not have as much generational wealth, but it is rising, slowly. They’re finally having children and maybe even moving to the suburbs, pushed out of downtown by high rent. Gradually, cars are becoming more of a necessity, since, for the most part, the layout of cities hasn’t fundamentally changed; they’re still designed for and around cars.
As a result, if the research from J.D. Power and KPMG prove correct, millennials are on the verge of becoming the largest car-buying demographic.
I remember, in September, 2010, the hopeful launch of Scion in Canada. Toyota’s now-dead spinoff brand would appeal to gen-Xers and millennials, they said. Scion was going to be edgy, and cool, not like your parents’ Camry, no sir. Scion officially folded in 2016, because, it turns out, millennials were quite happy to drive Toyota Camrys and Corollas and Rav4s just like their parents had done. We’re not so different after all.
Car-sharing hasn’t (yet) replaced young peoples’ desire to own a car either. The sharing economy, like the gig economy and the tiny-house trend, is more of a coping mechanism than a choice. If you can afford it, owning a car is still more convenient than sharing one.
Yes, these are the same young people that have helped make Bernie Sanders a front-runner in the U.S. democratic primary in recent days. As a generation, it turns out we are more inclined toward these collective-good policy reforms – which makes sense given the tough economic conditions in which we came of age. But that doesn’t mean we want to all go live on a hippie kibbutz. Socializing the means of production? Maybe we’re interested. Socializing the fruits of that production by sharing our own individual cars? No, thanks.
“It turns out that young people love cars and would rather own one than rely on ride-sharing services from the likes of Uber Technologies Inc. and Lyft Inc.,” was the conclusion of a Globe and Mail story about a 2016 Strategic Vision Study.
That’s not to say change isn’t on the horizon. There plenty of companies working right now to make car, bike, and scooter-sharing happen profitably and at scale. There are plenty more companies – including all the major automakers – working to make cars sustainable and electric and, in the more distant future, fully self-driving.
Don’t worry, we’re just as scared of robo-cars ruling the roads as you are.
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