News and analysis from The Center for Michigan • http://thecenterformichigan.net
©2014 Bridge Michigan. All Rights Reserved. • Join us online at http://bridgemi.com

Original article URL: http://bridgemi.com/2014/01/as-detroit-auto-show-revs-america-cools-to-car-culture/

Economy & competitive position

As Detroit auto show revs, America cools to car culture

Although carmakers are still in hot pursuit of the youth market, data suggests these potential customers don’t really care what’s about to be unveiled at the Detroit auto show. (Photo by Flickr user LorProCars; used under Creative Commons license)

Although carmakers are still in hot pursuit of the youth market, data suggests these potential customers don’t really care what’s about to be unveiled at the Detroit auto show. (Photo by Flickr user LotProCars; used under Creative Commons license)

Around 800,000 people are expected to check out the auto industry’s latest models during the nine-day run of the North American International Auto Show in Detroit, which opens to the public Saturday.

They’ll ogle the shiny sheet metal, jump into the drivers’ seats of hundreds of vehicles on display and dream of buying that sporty convertible when spring finally arrives.

But for others, owning a car with its attendant expenses of maintenance, gasoline and insurance holds no excitement. They’re perfectly happy getting around on buses, trains, bicycles or their own two feet.

Americans are driving less.

And young people – who once couldn’t wait to get a driver’s license and buy a car – are delaying this traditional rite of passage in unprecedented numbers. Even as auto sales climb again after a steep downturn, younger buyers are comprising a smaller share of that market.

The trend has touched off a spirited debate over whether America’s long-held love affair with the automobile is cooling, or if it’s just in a temporary lull while the economy regains its footing.

“We’ve seen a really bad economy, one of the worst downturns since the Great Depression. The most profound impact has been on the young demographic,” said Erich Merkle, a Ford Motor Co. sales analyst. “Young people are not coming out of the gate as fast as their parents did.”

Among them is Kevin McKenna, who is pursuing a master’s degree in urban planning at Michigan State University. McKenna, 25, said he has never owned a car and doesn’t plan to purchase one anytime soon.

“I don’t aspire to have one,” he said. “I might find myself in a situation where I need a pay-as-you-go rental, but I don’t intend to own an automobile.”

Part of his reasoning involves economics. Money is likely to be tight after he graduates in May and starts paying back student loans.

New cars are out of the reach of many cash-strapped young people. The average price of a new vehicle in December was $32,890, according to Kelly Blue Book. That’s more than some new college graduates earn in a year.

McKenna said he plans on moving after graduation to a large city where a car can be more of a hassle than a convenience. He said he prefers public transportation.

One study shows that the recovery from the Great Recession is not bringing back younger drivers to dealer showrooms in substantial numbers.

Younger buyers, between the ages of 18 and 34, bought 12.6 percent of all new cars in 2012, up from 10.8 percent in 2011, according to Edmunds.com, an online car-shopping site.

But their share fell again in 2013, to 11.4 percent through August.

Edmunds.com chief economist Lacey Plache attributed the slide to weak job growth last year and the trend among so-called millennials to delay moving into their own households.

“Millennials haven’t seen the same benefits in the labor, housing and stock markets that baby boomers and others have enjoyed over the last year,” Plache said.

That could spell trouble for automakers in the future if the millennials’ finances don’t improve over the next few years.

No rush to get license

Teenagers also seem less interested in driving than their parents were at their age.

The percentage of 19 year olds with driver’s licenses in the U.S. has fallen from roughly 87 percent in 1983 to 70 percent in 2010 – a 20-percent dip, according to the University of Michigan’s Transportation Research Institute.

In Michigan, the number of 16 year olds getting driver’s licenses has fallen from 92,762 in 2000 to 84,495 last year, according the Michigan Secretary of State.

More garage time

Indeed, Americans of all ages are driving less.

The amount of miles driven per driver, per vehicle and per household all peaked in 2004, according to studies by Michael Sivak, director of the Sustainable Worldwide Transportation program at U-M’s Transportation Research Institute.

In Michigan, vehicle travel is down slightly, from 94.9 billion miles in 2000 to 94.3 billion miles in 2012, according to the Michigan Department of Transportation.

Sivak said the decline in miles driven nationally is likely due to increased use of public transit, people moving to cities and changes in the age demographics of drivers. He noted that the number of driving miles peaked before the Great Recession started in 2007, so economic factors were not a major reason for the decline.

Micheline Maynard, co-founder of Curbing Cars, a website that chronicles changing attitudes toward transportation, said she sees a profound shift in how cars are viewed. “In the 20th century, people saw the automobile as their ticket to freedom,” she said. “In the 21st century, people look at the automobile as hindering their independence.”

Maynard, a former New York Times Detroit bureau chief (and a Bridge contributor), said most people aren’t ditching cars.

Rather, they are “driving light” – viewing their cars as part of a larger personal transportation portfolio that includes bicycles, vehicle-sharing services and public transportation.

“I’m pretty surprised,” Maynard said. “When we started Curbing Cars, I thought this was mainly a West Coast and East Coast thing. We’ve heard from people all over the world who are driving less.”

That includes some baby boomers.

Ann Arbor online newspaper publishers Mary Morgan, 53, and husband Dave Askins, 49, got rid of their car in 2009.

Morgan said she was more reluctant to sell their car than Askins, an avid bicyclist who rarely drove. But she said she has no regrets, even during the recent cold and snowstorms.

“If I had a car the past few days, I would worry about having to shovel the whole driveway, whether the car would start and what would happen if I got stuck,” said Morgan, who publishes the Ann Arbor Chronicle. “Life is less stressful without a car.”

She gets around town mostly by walking or riding her motor scooter in good weather. Morgan said she’ll also occasionally take the bus or rent a vehicle by the hour from Zipcar, a car-sharing service.

Morgan said not owning a car is a lifestyle choice that may not work for others who have children or live in rural areas. “But I’m here to tell you it’s not crazy,” she said.

Maynard said the auto industry might not yet be feeling a significant impact from the “driving light” phenomenon because its products are aimed at an increasingly wealthier segment of the U.S. population.

Domestic automakers, of course, also sell cars and trucks globally, helping to hedge against sales hiccups in their home markets. General Motors, for instance, sells more vehicles in China than in the United States.

“We’re always going to have cars and an auto industry,” Maynard said. “But it’s becoming less of a mass-market industry. It’s skewing higher toward upper-income and luxury buyers.”

Automakers counter that they haven’t forgotten about middle-income consumers. They say they have a variety of smaller, lower-priced, fuel-efficient vehicles aimed at capturing younger buyers and making them life-long customers.

Merkle, the Ford sales analyst, said he’s confident the majority of millennials will eventually marry or form domestic partnerships and establish households in the suburbs, where they will need cars and trucks.

“They don’t all get jobs in Chicago and Manhattan and rely on public transportation,” he said. “And when they decided to form that family and have children, their needs change dramatically.”

Rick Haglund has had a distinguished career covering Michigan business, economics and government at newspapers throughout the state. Most recently, at Booth Newspapers he wrote a statewide business column and was one of only three such columnists in Michigan. He also covered the auto industry and Michigan’s economy extensively.

14 comments from Bridge readers.Add mine!

  1. Paul

    Hello,

    I want to start a non-car residential development in Michigan Maybe Ann Arbor is the only town in the entire state of Michigan that you can survive without a car. My kids (UM) are bolting from MI to pedestrian-friendly cities! We can make big mechanical things here, like trucks, busses, trains, wind generators, and solar panels. Why don’t we have the leadership to make this happen?

    I lived in Europe in college. I never want to own a car again!

    1. Eric

      Downtown Grand Rapids has far better transit than anyplace in metro Detroit. Check out the Wealthy St area.

  2. Amy

    I hope so. I recently moved back to Michigan after 10 years in Chicago and the dependence on personal vehicles is likely the reason we will not stay. A culture where people share public transit, walk, or bike is not only much better for the environment and for our health (besides, it saves gobs of $$ and headache) but I believe it results in a more civilized society.

  3. tom

    I enjoy the freedom to go anywhere want whenever I want. My car is as comfortable as it gets. I do have friends who dont buy cars constantly asking to borrow mine. Its getting old fast. I do see more trusting Michigan economy enough to buy a car now. Big box stores drove out local stores so just getting daily food requires driving 10+ miles each way.

    1. Eric

      I used to feel that way when I was in Grand Rapids, but when the car needs maintenance, the weather is bad (often), or you just simply want to walk to your destination, cars can create a self-inflicted feeling of one being trapped in their own house or community. There needs to be balance.

  4. Eric

    After growing up in car-dependent Grand Rapids and graduating MSU, I moved to Cincinnati shortly after purchasing a new car. After two years here only needing the car once a week or two, I decided to sell it since I’m within walking OR transit distance to work downtown and have just grown tired of worrying about constant maintenance. It’s cheaper just to rent a car for trips back to Michigan than to maintain something I can get by without for the most part.

  5. Tim

    I love cars. Always will, and so does my son, who is 2 years old. I am excited for him to grow up learning to fix cars, and appreciate the awesomeness of cars, from yesteryear, and beyond. I understand the reasons for not owning a car, I do, and can appreciate it, but, I love them too much to never own one. I feel truly blessed to be able to own a car….it is a luxury nowadays. Yes, they are polluters and expensive to maintain, but they are also a necessity to so many. LOVE LIVE THE AUTOMOBILE!

  6. Phil

    I’m with Tim. We have 2 girls who are itching to get in our older rides. We love our classic cars!

    And, I totally understand a lifestyle without cars, too. If you can do without, I beg you to do so. If you don’t want the hassle of up-keep and maintnance, insurance, liabilities, repairs, etc, do not buy a vehicle.
    Also curbing your cars could be a blessing in disguise for many…

    A couple of our “late model” classics (although painted and in perfect working order) would be considered just another old beater or even a junker to the less informed or non car-savvy public. This too is a blessing in disguise…

    If we can get these type of people off the streets and into buses, trains, bikes etc, think how much cleaner the planet will be!
    Not to mention that a good majority of “non car” folk just don’t get it- and I’m talking about simple driving dynamics here. The world’s roads will be a much safer place without these texting, eating and even reading fools clogging our streets.

    So for me and my family personally, we hope that everyone will digest this article and heed our advice to not purchase a car. This will open up the roads for true drivers and we can enjoy the highway in a safe and fun manner without the unattentive scaring us to death every other day. We can cruise the speed limit (or 5mph over) without the idiots bearing down on us, cutting us off and weaving into our lane. So please: park it, sell it, junk it- or don’t buy one in the first place!

    This will be better fot everyone- hands down.

    1. Ken

      I agree i was raised around classic cars and depend on my everyday truck to get me to work and getting out on the weekend and having fun.I think its far from dying out Today the transit riders and tree huggers are just a different breed and cant locate a dipstick it there life depended on it As far as the new cars of today they lack personality and i cant tell one from the other .The kids today are very different then the way we were all raised .Hell we couldn’t wait til the morning came so we can get out and ride our pedal bikes or play sports and we would play outside everyday doing what kids did back then working on your pedal bike at a young age then dir bikes as we grew abit older planted the seed for our future and the love of hot rods The kids today or most of them are strange the hide indoors all day they don’t learn the skills that children of the past were lucky enough to learn in life and there is your nerdy goofy i ride the transit or walk to get around who needs a car type And thats a shame .Boy times have changed and Americans have become weak and soft just look around and its sad the way of the good ole days has really been the biggest change ..

  7. Jim

    My four studebakers will enjoy the roads much more without kids on their cell phones and texting and not paying attention to whats on the road around them.

    My friend Linda, in her cool 48 Plymouth, was on her way to a car show last Sunday morning, and was sideswiped by an illegal who was texting. She ended up going over the median and hitting a building and totaling her ride. She was slightly injured, Police tracked down the suspect and charged him with felony hit and run, and he’s now a guest of the state. And he will be deported!

  8. jason

    In your dreams. Cars classics and racing will be with us much longer then you Shemales who wish to change the Men out there.

  9. Mitch

    While I do not dispute any of the facts cited by the author, I think any conclusions that we are falling out of love with the automobile are premature. The Specialty Equipment Market continues to experience strong growth and has experienced strong growth for nearly 40 years straight (other than 2008-2009). At about 34 billion dollars Retail, it is a larger industry than Golf Equipment, Hollywood Moviemaking, and Toys – yet I don’t hear anyone proclaiming the beginning of the end for any of those industries. The fact is mass transit does make a lot of sense in places like Los Angeles and New York – but it makes no sense in places like Texas or much of the Western United States – because unlike Europe, decades ago we didn’t plan on needing it. Just last year, the SEMA Show in Las Vegas broke all-time attendance records and continues as the second largest trade show in North America. There is not a single product there that you have to have – but there are a lot of products there than automotive consumers want. I believe the real cause of young people being less interested in cars is because young people today have exponentially more choices in their lives than young people of even 20 years ago. Cars therefore will have to compete more than ever before for their attention and their dollars. One need look no further than the drop in attendance at many major sporting events – we all simply have a lot more ways to have the same or nearly the same experience than in the past without actually attending the event. Today you can drive a Porsche around the Nurburgring from the comfort of your living room without buying a Porsche or traveling to Germany but that doesn’t mean Porsche is in trouble or that people are going to stop traveling to Germany. I do believe that the bottom tier of vehicles are likely to struggle as mass market consumers migrate to mass transit (assuming it is even a viable option for them) – but the higher end vehicles will remain strong for many years to come. We are also seeing more and more technology in the higher end vehicles – which will most certainly be attractive and aspirational to younger consumers. The end of our love affair with the automobile has been predicted several times over the past 40 years – and every time not only were the predictions wrong – the industry actually increased in size at the same time it was supposed to be on its deathbed. Therefore, the likely outcome this time is the same. The future may mean fewer automotive consumers – but the automotive consumers that are there will be spending more money on better and more expensive vehicles and automotive products.

  10. Gary

    It is funny that most of these comments come from individuals that live in large cities, or are within ten to fifteen minutes of one. You might as well place a large glass dome over you, like a habitat dome, so you don’t have to venture out to areas of inconvenience. Large cities, small insight as to what there really is in the world. Ninety percent of the civilized world, does not live in the Habitat Dome, nor would they want too. We enjoy the freedom that our transportation gives us. Sitting on a bus, or train with someone that has a habit of taking a bath in their perfume, smells like an ashtray, or looking at somebodies underwear because they think it’s cool to walk around with it hanging out, sounds pretty gross. So enjoy your mass transit and Habitat Dome, and the uncivilized will continue to enjoy life. As far as one person put it, they think it makes for a more civilized culture. No, it makes it easier for the predator to move among his prey without them noticing him/her. Your so called civilization is responsible for more crime than anywhere else due to the cramming of bodies into a small cage, bus, train car, etc…… Besides your transit goes from point A to point B. WE go to everything after that, and we don’t have a schedule we have to rely on. Think about it!

  11. Alex Eccleston

    Classics are exploding

Leave your comment...

Your email address will not be published.

Invest in non-partisan journalism.

Donate to The Center for Michigan. Find out why.