Coronavirus Shaking Up Car Buying, As Millennials Suddenly Love Them.
Millennials leading car ownership would have been unthinkable, particularly in terms of buying non-electric cars. The industry should recognize that there is a new market”
Millennials are said to despise the fossil-fuel powered car, embrace public transport, worry about climate change above all else and are firmly behind environmentalists’ plans to bring forward the day when the sale of the traditional automobile is banned.
But that was before the coronavirus struck.
According to a survey across 9 nations undertaken by global consultancy EV, millennials (aged between 24 and 39) are reversing all these assumptions because the coronavirus has made public transport an unattractive prospect, with its requirement for facemasks and the inevitable close proximity to the unknown. The individual, sealed automobile is now a coveted object of desire for getting to work and play.
So far so shocking for the conventional wisdom.
The headline finding of the report was that nearly 1/3 of people without a car intend to buy one in the next six months, and 45% of those will be millennials. There will be a global boom in car buying in the next six months, not least because of pent-up demand.
It has become a cliché in the world of automotive conferences where industry leaders peer into the future of mobility and claim, frowning, that young people are not interested in cars and SUVs anymore and positively despise them. That never made much sense, given the freedom and prestige accruing from owning a nice set of wheels. In the aftermath of the 2008 financial crisis, young people were suddenly an impoverished group who couldn’t for the first time in decades, actually afford a car. So they accepted the need to take the bus or the train knowing it was a necessity.
But not only are millennials expressing a desire to buy automobiles, only 6% of non-car owners want an electric car, while 71% want one powered by the loathed internal combustion engine (ICE).
According to EY’s 2020 Mobility Consumer Index, millennials are expected to lead a car ownership boom in the next 6 months across the globe, representing 45% of all first-time car owners. The survey took place in 9 countries and interviewed more than 3,300.
Nearly a 3rd of respondents who do not currently own a car say they plan to buy one in the next six months.
“71% of non-car owners currently seeking a new car are looking to buy a gasoline or diesel model, with just 6% looking to purchase a purely electric vehicle and 23% looking to buy a hybrid,” the report said.
John Simlett, author of the EY report, said the coronavirus has shaken up the car market to the point where policymakers will have to address points they thought were obsolete; how to accommodate a huge increase in cars on the roads.
“The COVID-19 pandemic is reshaping the marketplace. Millennials leading the increase in global car ownership would have been unthinkable a year ago, particularly in terms of buying non-electric cars. The industry should recognize that there is a new market out there that didn’t exist until very recently,” Simlett said.
“But with more people buying cars and car usage expected to increase, this leaves policymakers with some very difficult questions to answer: How to accommodate all these cars on our roads and aim for a more diverse mobility mix? How will this trend impact public transport investment? Quite simply, is this sustainable, and if not, what needs to be done and by whom?” Simlett said.
Taxis and public transport have seen big drops in usage while journeys made by personal vehicles like cars, motorbikes, regular bikes, e-bikes and e-scooters has accelerated
The survey coincides with a few conflicting factors. This week the British government is expected to announce the ban on the sale of new ICE cars will be brought forward to 2030 from 2035. And a survey in Britain from Power MY EV www.powermyev.co.uk says a big majority of motorists support this action. The survey found that almost ¾ of those surveyed agreed the decision was necessary for the protection of the planet from climate change. The aggressive sounding response might have something to with the fact it addresses decisions to be taken almost 10 years away.
Meanwhile BMW CEO Oliver Zipse said any move to bring forward the ban on ICE cars will mean many car buyers simply won’t be able to afford a car, with big consequences for people and carmakers.
“If that’s the case, (and the ban is brought forward) we will produce the electric vehicles but whether this is particularly wise is another matter because the effect will be that many car drivers will not be able to afford to drive cars any more, or to access the charging infrastructure,” Zipse was quoted as saying by the London “Daily Telegraph”, after the launch of the BMW’s new Tesla Model X rival, the iX.
Permanent or temporary?
The survey was undertaken in Sweden, India, Singapore, China, South Korea, Germany, the U.S., Britain and Italy.
“One big question is whether these changes will be permanent or temporary. Rising delays and congestion on the roads may encourage some to return to public transport in search of shorter journey times,” the report said.
“But it is hard to imagine a return to previous levels of ridership, at least until COVID-19 is under much more effective control,” the report said.