For something like half a decade, the auto industry has been fretting about whether millennials will buy cars.
The ascent of Uber and Lyft didn’t help matters, as the whole concept of “de-ownership” gained currency.
Well, it turns out that millennials are actually completely car crazy.
Here’s Bloomberg’s David Welch:
Millennials … are more captivated by cars than their parents and still want the freedom of owning one, according to a new study from San Diego consulting firm Strategic Vision Inc. That contradicts predictions in recent years that auto sales would suffer as Millennials, also known as Generation Y, took Uber instead of buying their own vehicles.
Welch reported that the Strategic Vision Study “came up with a Customer Love Index” to explore how much affection millennials did or didn’t foster for owning an automobile.
The upshot is that millennials are absolutely enamoured of cars. They’re especially fond of crossover SUVs, and that bodes well for the auto business — this type of vehicle is more profitable than the passenger cars that used to be the entry point to car ownership.
Intuition and a bit of history could have told us that all the dire prognostication about millennials and owning cars was bogus. True, for younger folks living in big cities, owning a vehicle can be onerous. But when millennials pair up and start to form families, car ownership become more imperative.
Then there’s the improved economy. Jobless millennials had no need for a commuting vehicle and no access to credit to finance one in any case. With the US now at “full employment” — the unemployment rate is below 5% — and auto credit flowing, those previously unpleasant conditions have reversed.
Ultimately, because millennials make up such a large generation, their car-buying habits will shape the auto industry for several decades.