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