Are millennials really returning to new car showrooms?

Right out of the recession, just as things were getting better, someone in the auto industry hit the panic button about millennials. “Oh, the young ones are not buying cars,” they must’ve said.

It soon graduated to, well, they are just not interested in cars.

Gallons of ink — and millions of dollars of corporate strategy — have been spent over the last couple of years on how to bring Gen Y to the automotive fold.

Looks like all the millennials needed were jobs.

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With the improving economy, millennials are finally returning to dealerships. Recent figures show that in 2015, millennials became the second largest group of car buyers in the U.S., just behind baby boomers. No data is available for the Canadian market but in America, Gen Yers now constitute 28 per cent of new car consumers. The number closely reflects their share of the American population — 30 per cent.

Needless to say, the auto industry is rejoicing. All the erstwhile doom and gloom surrounding millennial apathy toward cars seems to be fading away. You can hear a lot of “I knew it” across boardrooms these days.

Or are they?

I don’t want to be a party pooper. I have always maintained that millennials will start buying cars once they have jobs and they can turn their mind and money away from onerous student debt. In a nutshell, car ownership isn’t going anywhere. Not in North America, at least.

But there are three nuances here that should be grasped to truly understand what’s happening here and what we can expect in future.



First, definitions: A “millennial” generally includes people born between 1980 and 2000. But the term is rather flexible in its use. The J.D. Power report being cited in this recent tale of emergence counts people born as far back as 1977. The three-year spread may not seem like much but stats can skew heavily even on such small differences. So are we including more people in this subset than we should? Maybe, but that’s more a technicality.

A more useful number to look at would be what percentage of people aged 20 to 30 bought cars during various decades. I think that would reveal more about attitudes of today’s young folks against, let’s boomers, when they were in their 20s.

Second, let’s look at their options. In earlier decades, car ownership after a certain age was a given — not necessarily because of better economic conditions but because there wasn’t much else. Forget all the ride sharing, Ubers and subways in hyper-urban areas — transportation has improved even in suburban communities. For instance, our very own GO network keeps improving every year.

This trend will only grow and will continue to have an impact on car purchase and use, however minimal. Combine that with the constant millennial migration to urban centres and you get a fuller picture of the situation.

Third, consider their attitudes. Do Gen Yers care less about their cars than previous generations? That’s the million dollar question but numerous surveys have shown that the love has surely faded over the decades. That does not mean that current 30-year-olds with jobs and kids won’t buy a car, but it surely implies that they might be less passionate about the purchase — meaning that car companies will have to find new ways to draw them in.

Kumar Saha is a Toronto-based automotive analyst with the global research firm Frost & Sullivan. To send feedback, email wheels@thestar.ca