April 13, 2018
The face of the car industry has been in constant change over the last decade or so. Advanced technologies like autonomous vehicles, smartphone connections, increased safety features, and various other additions to the industry have made cars much different than they had been before. However, one thing has changed that was quite unexpected; Generation Z is widely separating itself from car ownership, even more so than Millennials have.
Instead of owning their own vehicles for their transportation needs, those in Gen Z relies on services like Uber and Lyft as well as trains, buses, and bicycles. Car manufacturers say that this is a game-changer. Unlike past generations, car ownership is not seen as a status symbol. Furthermore, those in this generation are actually quite frugal with their spending and smart about their money.
Naturally, this change can have many automakers sweating bullets. However, Ford is taking a different approach. They want to support consumers whether or not they want to buy a car. One wise way they are handling this 21st-century challenge is with their own bike-sharing services. This way they can still sell a product to people who have no need or desire to purchase their own vehicles.
In fact, Ford, Fiat Chrysler, and General Motors define themselves as no longer just automakers. Each one of these companies is branching out into other areas of transportation be it bikes, car-sharing, ride-hailing or self-driving.
GM has launched a new car-sharing app, Maven. Peter Kosak, the executive director of urban mobility for the new company reports that for newer generations it’s more about access than it is about ownership. Maven was created specifically to target those in Gen Z and Millennials.
UC Berkeley researcher Susan Shaheen has been studying ride-sharing programs since the 1990s before their widespread use. She reports that all of these changes can actually be positive movements for car companies.
Shaheen points out that when you use the mobility services of an automaker, they likely will gather data about your habits and preferences. This puts them in a prime position to market to you since they will have a lot of information on how and where you travel. Furthermore, using their other transportation methods can actually be similar to test driving a car, the first step in car ownership.
Kosak agrees that Maven is an excellent way to gain marketing targets for vehicles, even if people reserve car buying for some time in the future.
At one point, there was widespread panic among car makers regarding Millennials not wanting to own cars. However, they eventually started purchasing vehicles in droves. Their late start in car ownership has been attributed to the Great Recession, according to some industry experts.
Michelle Krebs, Autotrader analyst believes that once Gen Z gets older and starts having families that they will desire to have at least one personal vehicle for family use. This may be the cure for car companies that are finding themselves having a bit of an identity crisis.