The defining characteristics of the 80 million young people currently between the ages 18 and 34 has been much debated. In the haze of millennial hype, common themes vie for a place at the top. Are millennials entitled, lazy, and self(ie) obsessed? Or are they a diverse group propelled by innovation and interested in social change? The confusion surrounding what appeals to millennials has caused many ad campaigns to plummet, with truly dismal results. The United States Potato Board wants to understand how they really feel about potatoes. Tic Tac wants to satisfy their need for never ending entertainment. But luckily for the auto industry, the capricious desires of the M-generation aren’t so important. A new target audience has proven themselves the key to automakers’ success. And these folks aren’t Tinder’ing at the red light.
Welcome to the Future
Kyle Stock of Bloomberg Business recently declared the elderly as the future of the U.S. auto industry. The reason why is multifold but this turn to seniors (in millennial parlance: the olds) is less surprising than it first appears. Stock explains, “American seniors have never been healthier or wealthier. At the same time, cars have never been crammed with more features to safeguard drivers with fuzzier vision, slower reactions, and stiffer necks.”
The Kids Are All Right (With Not Driving)
In recent years, young people have been driving much less than their baby boomer parents. According to the most recently published National Household Travel Survey (NHTS), the number of annual miles driven has dropped by more than 20 percent: From 2001 to 2009 vehicle-miles driven decreased from 10,300 miles to 7,900 miles per capita.
Since the NHTS is only conducted every five to seven years, it is possible that more current data will reveal a different pattern. But as Vox reports, other datasets support that the number of young people sitting behind a steering wheel is declining, and there is little reason to believe the trend will change course. In 2010, only 70 percent of 19-year-olds had drivers’ licenses— a 17 percent decrease from 1983. Additionally, surveys conclude that compared to the generation before them, young people’s lifestyle preferences are much more likely to include residing near a city center, which makes a walk or bike ride feasible as a primary mode of getting around. City dwellers also benefit from increased access to multiple public transit options. And, as we frequently cover, the proliferation of ridehailing apps has made it simple to get from point A to point B without owning a vehicle at all.
Roads Going Gray
While millennials are driving less, those over the age of 65 are driving more. From Bloomberg: “From 2003 to 2013, the number of licensed drivers over the age of 65 surged by 8.2 million, a 29 percent increase, according to U.S. Census data. The very old were particularly stubborn about pulling over for good. There are now about 3.5 million U.S. drivers over 84, a staggering 43 percent increase over a decade ago.” For older adults, the ability to drive is fundamental to maintaining independence and mobility. And while ridesharing giant Uber did began offering senior-specific assistance this July, the overall concept of ridesharing is less familiar and less appealing to the seasoned drivers of prior generations.
Granny’s New Whip
With all that increased time on the road, seniors can easily justify the splurge of a new ride. Drivers with more than 75 birthdays under their belt have “registered about six times as many new cars as those age 18 to 24,” according to Bloomberg. The number of new cars registered to households led by someone age 65 or older? That’s risen too— IHS calculates an increase of a whopping 62 percent in the last five years.
A Side Effect of Student Debt
When it comes to buying a new car, millennials are still getting warmed up to the idea. Last year, just 12 percent of new cars were registered to a head of house under 35 years old. The 2008 recession and its high youth unemployment rates was a defining economic event for much of America, one that pushed vehicle ownership out of reach for many young people. Though the economy has improved, spending habits are slower to change. Especially since millennials still shoulder a soaring amount of student loan debt. This debt, ranked as the top financial concern for millennials, is routinely looked to as a reason for pushing back life milestones, like the purchase of a car or home.
Health Follows Wealth
A major benefit of driving a new car (besides the new-car scent, of course) is the assurance it comes with the latest safety features, like blind-spot and lane departure warnings. And every year safety features continues to advance, perhaps with seniors in mind. Already in 2015, auto safety tech has gone beyond mere warnings to autonomous action. Currently on the market are cars with sensors that will automatically steer a driver back into their lane if they leave it, warning signals that will alert drivers of a forward collision, and automatic emergency braking systems that can apply the brakes before a driver even realizes an imminent crash is ahead. With features like these, seniors will be able to keep driving for longer than ever before.
Young Blood Still Needed
The shine of youth may be waning, but the promise of a youngster’s brand loyalty will always hold a place in the hearts of marketers and CEOs. The younger you can snare a customer the longer you will have their business. And while U.S. life expectancy is lengthening, “in economic lingo, the expected lifetime value of an 85-year-old customer isn’t great, no matter how wealthy she is,” says Stock. And so it goes. We hope America’s sprightly seniors enjoy their day in the sun because it won’t be long until the auto industry turns an eye toward the snapchat stars of Generation Z. (That is, as soon as they come of driver license-bearing age.)