We wrote recently on the Pickles blog about millennial car collectors and their flashy choices, like Justin Bieber's blue Ferrari. But, outside of the luxury segment, how are millennials really interacting with their cars? Some have declared that millennials' interest in ride-sharing and delay in obtaining drivers' permits may eventually spell the end of the automotive industry as we know it.
The demise of "car culture" seems unlikely - but how will this generation cause it to shift? A recent blog post on Medium suggested that
millennials may actually be the key to *sustaining* the automotive industry.
On the sharing-economy point, with services like ride-sharing, cars are of course still critical to the equation. Strategically, automakers have already begun investing in this space to ensure they maintain relevancy. The cars shared may become more utilitarian, chosen for passenger-friendliness and overall durability rather than luxury symbolism. The overall principle that cars are a convenient form of transportation remains intact; the ownership rules and maximization of the vehicle's utility (e.g., in the form of less idle time) may change. Another form of utility maximization is the "recycling" of cars; for example, at Pickles we take cars that are already in the market and facilitate their transfer to the next owner, for example at auction.
It is true that many millennials have delayed getting a drivers' license: in 2006, Australia saw 72.5% of millennials driving, and this had dropped to 67% in 2016. But, they are still purchasing cars, just a bit later. The purchase process is where their preferences can change things dramatically. Rather than the hassle of visiting dealerships and engaging in lengthy negotiations, millennials are relying on their mobile devices to find the right car (80% of millennials, vs. 46% of those over the age of 35) and seeking what the article cited above referred to as "seamless stress-free experience, integrated with online pathways to purchase".
This is something that we have taken note of at Pickles, as we make investments in technology that makes it easier to find, assess and purchase the right car at a good value. In fact, this quarter, we'll be announcing a seamless, one-stop platform for buying and selling vehicles, including finance, insurance and warranties, that makes the process even more stress-free - stay tuned!
14 May