Cars aren’t cool anymore.
That is the verdict of a broad swath of Generation Y. The auto industry covets the 18-to-30-somethings as trend-setting potential customers. But they aren’t as infatuated with cars as their parents and grandparents were. They are driving less; indeed, many aren’t bothering to get a driver’s license. And many who are interested in cars don’t want what Detroit is selling.
With online shopping, they have less need for cars to take them to malls. Smartphones take them to virtual hangouts with friends. Driving to the movies? Not in the age of Netflix. And when they’ve got to get somewhere, they avoid the hassle, cost — and pollution — of owning cars by relying increasingly on bicycles, public transportation and such hourly car rental services as Zipcar. Or they walk.
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That is great for the environment. Less driving means less global warming. (For every gallon of gasoline produced and burned, 25 pounds of carbon dioxide, the major global warming pollutant, enter the atmosphere.) But it is a challenge for an auto industry looking for its next market.
Government, academic and corporate studies demonstrate how much the car culture is changing: 16-to-34-year-olds drove 23 percent fewer miles in 2009 compared with 2001, the U.S. Public Interest Research Group reported last year. In 2010, one-quarter did not have licenses, according to the University of Michigan’s Transportation Research Institute. Among 19-year-olds, for example, 30 percent had not gotten a license, up 17 percentage points from 1983.
More than any other generation, Millennials say human activity is causing global warming, and support using alternative fuels to lessen our dependence on oil and other fossil fuels, the Pew Research Center found.
Reflecting this environmental concern, the consulting firm Deloitte LLP reported that nearly six in ten members of Gen Y in 2012 preferred hybrid vehicles over those powered by a conventional gasoline engine.
The Millennials, says Craig Giffi, Deloitte’s vice chairman and automotive leader, may be the “generation that leads us away from traditional gasoline-powered vehicles.”
That should be a wake-up call for anyone who makes and sells cars.
For decades, the industry has pushed gas-guzzling trucks and cars sporting antiquated engineering but ever-more cup holders. That strategy almost killed it in 2008. It recovered thanks in no small part to the $82-billion taxpayer bailout that let General Motors and Chrysler survive bankruptcy.
No doubt some of the bus-and-bike-riding Millennials will over time buy cars. But if Detroit wants to reach them, it must try something better than adding Bluetooth to its behemoths. It should ramp up production of clean cars.
Under the Obama administration’s money-saving mileage-and-emissions rules, the fleet of new cars and trucks sold in the United States in 2025 is slated to average 54.5 mpg. This represents the biggest single step any nation has taken to fight global warming.
But loopholes for which the automakers lobbied will let the companies make dirtier cars and trucks, undercutting the new rules. They should shun these escape hatches, delivering instead the hybrids and other clean cars that the next generation wants and the climate demands.
If they do, we will cut oil consumption and greenhouse gas emissions, and they will attract new customers, rather than repel them. That’s good for our environment—and good for their business.
To meet the standards of a new generation, Detroit’s assembly lines must roll out something better than the 21st century equivalent of muscle cars and tail fins.
Building a fleet that lives up to the tough standards isn’t rocket science. It’s auto mechanics. The auto companies need only reach for what is already on their shelves, though not in enough of their cars: Advanced technology engines and transmissions, and strong, lightweight materials, for example. They can expand their production of hybrid and electric vehicles.
The next generation of car buyers would be cool with that. They want Detroit to join them looking ahead, rather than in the rearview mirror.