Unlike most of my Millennial peers, I didn’t get my driver’s license until just before my 22nd birthday. Being an older new driver came with a lot of anxiety and fear, especially given the fact that I had only driven a handful of times prior to obtaining my license (terrifying, I know). I still remember one particularly nerve-wracking driving lesson with my dad where he told me over and over again, “you’re driving the car, the car is not driving you.” His words sunk in, and eventually, with practice and routine, driving evolved into a feeling of freedom, not fear. As I look ahead to future generations, I can’t help but smile at how close we are to those words no longer being true.
With the new decade, comes a new era of technological innovation, especially in the ever-adapting automotive industry. Automobiles are an emblem of the 20th century, a rite of passage in the U.S.A., and their role in our daily lives shows no sign of slowing down. We have seen rapid development in the automotive sector in the last hundred years and, with the exponential rise of technology, we are likely to see an expansion of that same caliber within a much narrower timeframe.
Reflecting back on the automotive industry – what did it look like 5, 10, even 15 years ago in comparison to today? Well, for one, there is a brand new generation of consumers. This year, people born in 2004 will be eligible to obtain their driver’s licenses in most states. A few years from now, those same people will potentially be making their first vehicle purchase.
Reflecting back on the auto industry – what did it look like 5, 10, even 15 years ago in comparison to today?
In this blog series, I’d like to explore the factors that influence “The Buy” and how these factors have shifted across generations, in addition to how the automotive industry has currently responded to these fluctuating needs. Moreover, I couldn’t write a blog series on the changes within the automotive industry without addressing the impact of ride-sharing companies such as Uber and Lyft, as well as how these new considerations have affected employees in the automotive field.
So, what are the big factors that play into the decision-making process when it comes to purchasing a vehicle, particularly for my generation, Millennials, and the successive Generation Z?
The Rise of the Eco-Conscious Consumer
First, let’s talk about the environment. The effects of climate change are at the forefront of the list of pressing issues we face in today’s world. A recent poll conducted by Amnesty International found that 41% of 18-25 year-olds listed climate change as the most important global issue. Awareness and concern over our individual impact on the environment are more prevalent than ever before and climate activists are urging society to make better decisions when it comes to consumption. Recommendations to cut out single-use plastic, reduce our consumption of animal products, and opt to walk or ride a bike whenever possible are at the top of the list when it comes to “greener” decision-making.
However, a lot of these suggestions are easier said than done, particularly the last point. Being able to get around with an alternate mode of transportation (i.e, riding a bike, public transport) greatly varies by location. I live in Austin, Texas, where urban sprawl combined with rapid growth has made it increasingly difficult to navigate areas without a car, but expensive parking and poor infrastructure within the city also present major obstacles for vehicle-owners. Public transport is an option, but most American cities, Austin included, are lacking in this regard and those who use public transport cite infrequency, disjunction within routes, and safety concerns as some of the drawbacks.
Before I got my first car, I was a frequent user of Austin’s Capital Metro system and I have a multitude of negative experiences to fortify the notion that the money you save on public transport, is not always worth the headache. An analysis by Geotab compiled average commute times for the 20 largest cities in the US (by population). The average commute times were at least 10 minutes longer in each city for those who used public transit. When you crunch those numbers for a full calendar year, car commuters save a significant amount of time.
A New Generation’s Reality of Debt
Another obvious factor to consider is cost. The national student debt is at an all-time high, reaching $1.6 trillion in mid-2019, the majority of it held by those under 40. While it is true that younger generations want to make more eco-friendly decisions, if they can’t afford the eco-friendly option, they are going to go with the next best thing: whatever will get them from Point A to Point B. Beyond the initial purchase, the annual average cost of vehicle ownership is $9,282 in 2019, according to research by AAA. Even if a buyer was trying to cut costs by purchasing a pre-owned vehicle, maintenance costs can quickly add up.
Along that same vein, online purchasing is also rising steadily. The majority of car sales still occur in-person at the dealership, but the ease of online shopping is a draw for a lot of younger buyers. Although a young buyer isn’t necessarily making their final buy on the internet, they are still comparing models online, reading the reviews on dealerships and dealers in their area, and researching prices before committing to a purchase. A recent Forbes article stated that 97% of Millennials read reviews posted online before visiting a business. Predictably, I fall into this percentage. In fact, I couldn’t fathom giving a business my money without at least checking out what their patrons are saying.
Intelligent Vehicles: No Longer a Pipe Dream
Unsurprisingly, connectivity modules are also an important element when it comes to buying. Drivers want to be able to have an easy way to connect their smartphones in their vehicle either to play music, make phone calls, or use navigation services. By the time I got behind the wheel, I never had to rely on my mental map or memorize directions beforehand because of apps like Google Maps and Waze. I’ve lived in Austin long enough that I could easily navigate without a GPS, but I still like to use it to time my routes and become informed of any potential delays (i.e., an accident, construction).
While self-driving vehicles are not dominating the industry quite yet, smart features on vehicles are expanding. For example, rear cameras, proximity sensors, and self-parking technology are already widely available to consumers. I will elaborate on this in the next part, but automotive manufacturers have quickly responded to these needs, and it seems as though each new model is equipped with the latest and greatest tech features.
In sum, the ranking of needs when buying a vehicle is shifting with new generations and new innovations. We’re seeking fuel-efficiency, environmentally friendly cars and companies, technological integration, and of course, low costs. In the next part of this blog series, I’ll dive into the auto industry’s perspective on evolving needs and their many advancements and experiments, including self-driving cars. I, for one, am looking forward to flipping the mantra to “you’re not driving the car, the car’s driving you”.
Until next time,
From providing support to the leadership team to event planning, Leslie brings drive and resourcefulness to all of her work. She has a degree in International Relations from the University of Texas at Austin and prior to joining Square Root, she was living and working in Dublin, Ireland. Despite being a self-proclaimed homebody, she enjoys the excitement of travel and believes that home can be many places. Outside of Square Root, she enjoys cooking, hiking, and reading.
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