It’s no surprise that millennials spend differently than the older generations do. They aren’t fans of football, department stores, diamonds or fast-casual dining, just to name a few things. They also have a strange relationship with houses and cars, which is affecting American car manufacturing.
American Car Manufacturing and the Millennial
Millennials face expensive health insurance premiums and tons of student loans. That’s why it makes sense they haven’t made buying a home or car as a priority. At the end of 2018, student loan debt measured $1.5 trillion. This is also why millennials prefer to live in the city. They can own an apartment for far less money, and they don’t need a car.
There’s also a declining rate of driver’s licenses as more people remain car-free. Right now, about 80% of people own cars, and many who don’t, plan to someday. The majority of millennials would rather use the rental services and shared ride programs instead. They also participate in more bike shares to get around the city.
The environment continues to factor into their decision as well. Many millennials choose to lower their dependence on driving to protect the environment. The added perk to that is less money spent on gas and vehicle maintenance.
So, how will this continue to affect American car manufacturing as previous generations continue to get older? We just don’t know yet. Millennials don’t seem to be completely against new cars, but statistics don’t show them favoring the American car companies.
With a $300 to $400 student loan payment to pay each month, it doesn’t make sense for many younger people to add a car loan to the mix. With that said, even if they could afford it, many of them would still opt not to have a vehicle.
What Do Millennials Want?
If it isn’t cars and houses that millennials are after, what is it? We know a few things about this group. They desire convenience, choices, experiences, budget-friendly items plus they want to belong and receive recognition. If a car manufacturer can meet these needs for this age group, it will be a winner. The 2020 Toyota Corolla Hybrid might be a car they are interested in.