Some millennials are driving more - but the trend could still be bad news for luxury car brands
- Lower-income millennials are driving more than they did in 2001, according to the 2017 National Household Travel Survey.
- But the percentage of higher-income millennials who drive plummeted over the same time period. Across all age groups, a lower percentage of Americans are driving compared to years past.
- These trends could be bad news for luxury car companies.
The report looks at the commute and transit patterns of people in cities and towns around the US. The biggest takeaway is that Americans today are driving less than they did eight years ago, relative to population averages.But as researcher Chris McCahill at the State Smart Transportation Intiative notes, that trend differs by age group and income. Since 2009, driving among millennials has actually increased, but only for those who earn less than $50,000.
This could be bad news for luxury car brands, since the young people who are driving more are likely not able to afford their vehicles. Those who can afford expensive cars are driving less than they did at the turn of the 21st century. Some luxury brands are already seeing sales declines. From November 2016 to November 2017, Mercedes' sales were down 1.7%, BMW sales dropped 3.2%, and Lexus sales decreased by 7%.
As you can see in the graph below, the percentage of people ages 26 to 33 who make more than $100,000 (in blue) declined sharply from 2001 to 2017. Compared to recession levels in 2009, medium-income millennials also drive less today, but only by a few percentage points. Driving among lower-income millennials has slightly surpassed 2001 levels.
Fewer Americans are also getting their driver's licenses than decades past. According to a 2016 study by the University of Michigan Transportation Research Institute, the percentage of people with a driver's license decreased across all age groups between 2011 and 2014. The trend is most evident among teens. (In 2014, only 24.5% of 16-year-olds had a license, a 47% drop from 1983.)
Even non-luxury car companies have struggled to attract millennials in recent years, and many have invested resources in marketing to them. GM once hired consultants from MTV to find out what the kids are into these days. In collaboration with the car-sharing company Zipcar, Ford has planted its cars on college campuses to help popularize them. In late 2017, Honda debuted an ad arguing that millennials are not #Adulting until they buy a Civic.If ridership levels for public transit continue to rise, it will become even more important for cities (and their outlying suburbs) to improve their offerings.