Generation Y would rather spend money on tech and recreation than cars, says millennial perception study
The auto industry is facing a serious issue when it comes to engaging with young adults who would rather spend their hard-earned cash on tech and their social lives than cars, according to research from marketing consultancy Prophet.
The study of 1,000 18-34 year olds found that a majority of UK millennials (67 per cent) would rather buy a second-hand motor and spend the saved cash on “electronics, recreation and travel”. An additional 65 per cent said they would rather invest in the latest smartphone model than that of a new car.
Half agreed that the car is losing its positon as a status symbol among their friends. Despite earlier showing a tendency to embrace electronics, gadgets and smartphones, 49 per cent said they don’t see any great use for digitally connecting cars.
Similarly 48 per cent said they’d be interested in buying their next car directly off the internet, signifying an issue for physical car showrooms.
Greg Handrick, a partner at Prophet, said: “This research is a stark wake-up call to the automotive industry. Generation Y has a very different outlook from the generations before it and car companies must find new, creative ways to appeal to them.
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“If they don’t, they could become completely irrelevant to their lives, especially as the research also shows that millennials are very open to car sharing ideas, like car-pooling, which may not require owning a car at all.
On digitally connected cars, Handrick added: “Young people are very sceptical and hesitant when it comes to connected cars. They do not recognise the advantages and are afraid of being distracted by more electronic services in car. It’s up to car companies to better communicate the advantages and reassure them about safety risks.
Similar studies also ran in the US and Germany.
In Germany, almost two thirds (65) of young people agreed that the car is steadily losing its significance as a status symbol, compared to only half of Brits and 47 per cent of Americans.