Generation Why: Deloitte Study Shows That Money, Not Ideology Is The Biggest Obstacle To Car Ownership

Derek Kreindler
by Derek Kreindler

One of the main criticisms of Generation Why is the lack of hard data to support this column’s ongoing thesis: that the lack of interest in car ownership among millenials is related to economics, rather than any sort of anti-car/pro-environment/pro-urban ideological shift among young people. Now, a key study from Deloitte confirms our initial hunch: young people want cars, but cannot afford them, and the notion of a car-free future, with walking, cycling and transit replacing the automobile (whether privately owned or shared via a service like Zipcar) is an unrealistic fantasy that somehow continues to have currency.

Deloitte’s annual Global Automotive Consumer Study surveyed 23,000 people across the globe, representing 19 different countries. The copy provided to TTAC focuses on the 2,000 Americans surveyed by Deloitte, with a subset of those (roughly 700) taken from “Generation Y”, born between 1977 and 1994.

The study’s findings largely confirm what Generation Why has maintained all along. According to the study, 80 percent of millennial surveyed say that affordability is the key factor keeping them out of a new vehicle, with maintenance costs coming in second place at 70 percent. On the other hand, 67 percent said that walking and other forms of transit were sufficient to meet their current lifestyle needs.

The current meme of new cars being homogenous, devoid of character and unappealing to younger buyers is at odds with Deloitte’s finding that 80 percent of consumers are interested in new models available on the market place. The study doesn’t say which models: many of us would love an Audi S4 or a Mustang 5.0, and find something like a Chevrolet Spark unappealing. Considering that Deloitte suggests cheaper, more fuel-efficient vehicles with more affordable payment options as a way of enticing younger buyers, it would appear that expectations may need to be tempered on the part of Gen Y buyers when looking for an affordable new car. The sense of wanting it all without having to pay for it is further reflected later in the study, with millennial buyers expressing a strong interest in advanced safety, infotainment and in-car connectivity features, but with only 27 percent willing to pay more than $2,500 for these features, while 21 percent are unwilling to pay anything extra to get them.

The cost of driving is a pervasive theme throughout. Gen Y drivers are three times as likely to give up their car if the cost of driving becomes too high, and would be willing to give it up if it conflicted with their lifestyle choice (like living in a walkable neighborhood where a car is a hassle or unnecessary). Even the desire for a hybrid powertrain (strong among Gen Y buyers) is motivated by cost savings rather than any sort of environmental consciousness, with 53 percent of young consumers telling Deloitte that saving money on fuel is their primary motivation for opting for alternative powertrains.

Even with affordability emerging as the key factor in getting younger buyers to purchase new cars, 92 percent of the those surveyed plan to buy a new car at some point, with 75 percent planning on purchasing one within 5 years. Based on Deloitte’s findings, it looks as if the mass abandonment of the automobile will continue to be a pipe dream for only the most radical anti-car types, but don’t look for it to disappear from public discourse any time soon.

Derek Kreindler
Derek Kreindler

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  • Mikefitzvw Mikefitzvw on Jan 19, 2014

    It's interesting how they claim we want all these silly features. I'm 21 and drive a '97 Sentra, a gift from my grandma, and due to a combination of finances and it being an otherwise pleasant car, I have no plans to get rid of it after now-5 years of driving. Sell me a stripper car that doesn't look angry and has decent visibility, and let ME choose the options. I'd take crank windows and seat warmers. I wouldn't want to buy a car that costs a ton of money and has features I didn't want in the first place.

  • Jethrow Jethrow on Jan 19, 2014

    The ideology take is interesting. I think we have a similar thing here in Australia, where there has been a marked shift to smaller cars. Of course this has been very detrimental to Holden who used to make Australia's best selling car in the Commodore. Now it barely makes top 5. Of course everyone criticized Holden for now making a car no one wants because current thinking is everyone WANTS a smaller car. But like here, the truth is I do not think everyone wants a smaller car at all. It is just all most can afford right now ....

  • Canam23 I believe the Chinese are entirely capable of building good cars, BYD has shown that they are very forward thinking and their battery technology is very good, BUT, I won't buy one because I don't believe in close to slave labor conditions, their animosity to the west, the lack of safety conditions for their workers and also the tremendous amount of pollution their factories produce. It's not an equal playing field and when I buy a car I want it made with as little pollution as possible in decent working conditions and paying a livable wage. I find it curious that people are taking swipes at the UAW in this thread because you can clearly see what horrific labor conditions exist in China, no union to protect them. I also don't own an iphone, I prefer my phones made where there aren't nets around to catch possible suicide jumpers. I am currently living in France, Citroen makes their top model in China, but you see very few. BYD has yet to make an impression here and the French government has recently imposed huge tariffs on Chinese autos. Currently the ones I see the most are the new MG's, mostly electric cars that remind me of early Korean cars, but they are progressing. In fact, the French buy very little Chinese goods, they are very protective of their industries.
  • Jerry Haan I have these same lights, and the light output, color, and coverage is amazing!Be aware, these lights interfere with AM and FM radio reception with the stereoreceiver I have in my garage. When the lights are on, I all the AM stations havelots of static, and there are only a couple of FM stations that are clear. When Iturn the lights off, all the radio stations work fine. I have tried magnetic cores on the power cords of the lights, that did not makeany change. The next thing I am going to try is mounting an antenna in my atticto get them away from the lights. I contacted the company for support, they never responded.
  • Lou_BC Are Hot Wheels cars made in China?
  • DS No for 2 reasons. 1-Every new car pipelines data back to the manufacturer; I don't like it with domestic, Japanese and Euro companies and won't put up with it going to Chinese companies that are part financed by their government. 2-People have already mentioned Vinfast, but there's also the case of Hyundai. Their cars were absolutely miserable for years before they learned enough about the US market
  • Theflyersfan Well, if you're on a Samsung phone, (noticing all of the shipping boxes are half Vietnamese), you're using a Vietnam-built phone. Apple? Most of ours in the warehouse say China, but they are trying to spread out to other countries because putting all eggs in the Chinese basket right now is not wise. I'm asking Apple users here (the point of above) - if you're OK using an expensive iPhone, where is your Made in China line in the sand? Can't stress this enough - not being confrontational. I am curious, that's all. Is it because Apple is California-based that manufacturing location doesn't matter, vs a company in a Beijing skyscraper? We have all weekend to hopefully have a civil discussion about how much is too much when it comes to supporting companies being HQ-ed in adversarial countries. I, for one, can't pull the trigger on a Chinese car. All kinds of reasons - political, human rights, war mongering and land grabbing - my morality is ruling my decisions with them.