These numbers terrify GM, Ford and the other automakers
01-19-16, 12:07 PM
#1
These numbers terrify GM, Ford and the other automakers
http://finance.yahoo.com/news/these-...160157091.html
How things change....
Driving isn’t cool any more.
Once upon a time, getting your driver’s license was the best thing that could happen to a teenager: It meant freedom, fun and escape. These days, however, apps, videogames and virtual reality seem to be more appealing.
The percentage of young people with a driver’s license has plunged during the last several years, according to a new study by the University of Michigan’s Transportation Research Institute. In 2008, for instance, 65.4% of 18-year-olds had a driver’s license. Now, 60.1% do. The trend has been underway for decades but seems to have intensified since the recession that began at the end of 2007.
In all age groups from 16 to 69, the percentage of Americans with a license has fallen since 2008. Above 70, it has inched up from 78.4% to 79%. This table shows all the changes:
.
Auto sales have been strong during the last few years, hitting record levels in 2015. Analysts expect a slight increase in sales for 2016, for another record year. But that may be largely due to pent-up demand among consumers who put off buying a car when the economy was weak and are only now catching up.
Fewer licensed drivers, meanwhile, portends fewer car buyers in the future -- a problem General Motors (GM), Ford (F) and the other big automakers are all aware of. Technology is part of the reason: Smartphones and social networks now provide a sense of connectivity that the automobile provided before the digital revolution. And they’re way cheaper.
More people these days live in cities, where cars are often more hassle than they’re worth. Many millennials lack the cash for such a big purchase anyway, since the job market for twentysomethings is still soft and the average student-debt burden is near a record high. And many millennials who do drive prefer leasing over buying, since there’s no down payment and you can upgrade your ride more often.
More than 90% of people between 45 and 69 drive, which means car sales probably aren’t about to fall off a cliff. Cheap financing and easing credit help. But automakers are also racing to get ahead of demographic trends by investing in businesses that provide an alternative to car ownership.
GM has invested $500 million in ride-share company Lyft, and it just purchased the remnants of a bankrupt competitor, Sidecar, for an undisclosed sum that's less than the $39 million investors plowed into the startup. Ford is experimenting with a Zipcar-style car-renting program in a handful of cities and is reportedly teaming with Google on a self-driving car project. And most automakers are partnering with tech titans such as Google (GOOGL), Apple (AAPL) and Microsoft (MSFT) on new software that syncs the car’s entertainment system with smartphones, allowing drivers to bring many of their favorite apps into the cabin and use them straight from the dashboard.
Automakers, nonetheless, are still dogged by worries that Peak Auto is upon us and it’s all downhill from here. Shares in GM and Ford have flatlined during the last two years—despite record sales and strong profits—with investors concerned there’s no growth ahead for car companies. It doesn’t help that emerging markets such as China and Brazil are wobbling, too. There's no shortage of young people in the world, but there may be a shortage of young driver
How things change....
Driving isn’t cool any more.
Once upon a time, getting your driver’s license was the best thing that could happen to a teenager: It meant freedom, fun and escape. These days, however, apps, videogames and virtual reality seem to be more appealing.
The percentage of young people with a driver’s license has plunged during the last several years, according to a new study by the University of Michigan’s Transportation Research Institute. In 2008, for instance, 65.4% of 18-year-olds had a driver’s license. Now, 60.1% do. The trend has been underway for decades but seems to have intensified since the recession that began at the end of 2007.
In all age groups from 16 to 69, the percentage of Americans with a license has fallen since 2008. Above 70, it has inched up from 78.4% to 79%. This table shows all the changes:
.
Auto sales have been strong during the last few years, hitting record levels in 2015. Analysts expect a slight increase in sales for 2016, for another record year. But that may be largely due to pent-up demand among consumers who put off buying a car when the economy was weak and are only now catching up.
Fewer licensed drivers, meanwhile, portends fewer car buyers in the future -- a problem General Motors (GM), Ford (F) and the other big automakers are all aware of. Technology is part of the reason: Smartphones and social networks now provide a sense of connectivity that the automobile provided before the digital revolution. And they’re way cheaper.
More people these days live in cities, where cars are often more hassle than they’re worth. Many millennials lack the cash for such a big purchase anyway, since the job market for twentysomethings is still soft and the average student-debt burden is near a record high. And many millennials who do drive prefer leasing over buying, since there’s no down payment and you can upgrade your ride more often.
More than 90% of people between 45 and 69 drive, which means car sales probably aren’t about to fall off a cliff. Cheap financing and easing credit help. But automakers are also racing to get ahead of demographic trends by investing in businesses that provide an alternative to car ownership.
GM has invested $500 million in ride-share company Lyft, and it just purchased the remnants of a bankrupt competitor, Sidecar, for an undisclosed sum that's less than the $39 million investors plowed into the startup. Ford is experimenting with a Zipcar-style car-renting program in a handful of cities and is reportedly teaming with Google on a self-driving car project. And most automakers are partnering with tech titans such as Google (GOOGL), Apple (AAPL) and Microsoft (MSFT) on new software that syncs the car’s entertainment system with smartphones, allowing drivers to bring many of their favorite apps into the cabin and use them straight from the dashboard.
Automakers, nonetheless, are still dogged by worries that Peak Auto is upon us and it’s all downhill from here. Shares in GM and Ford have flatlined during the last two years—despite record sales and strong profits—with investors concerned there’s no growth ahead for car companies. It doesn’t help that emerging markets such as China and Brazil are wobbling, too. There's no shortage of young people in the world, but there may be a shortage of young driver
Last edited by bitkahuna; 01-19-16 at 12:13 PM.
01-19-16, 12:30 PM
#2
Lexus Fanatic
iTrader: (20)
in the future there will be less and less need or even want to own a car. especially in urban areas it will make no sense. driverless uber style cars will take us where we need to go.
01-19-16, 12:31 PM
#3
Lexus Fanatic
Driving isn’t cool any more.
Once upon a time, getting your driver’s license was the best thing that could happen to a teenager: It meant freedom, fun and escape. These days, however, apps, videogames and virtual reality seem to be more appealing.
Back when I got my license (late 60s), in most places, driving DID mean freedom.....you got in your car and went somewhere, usually enjoying yourself in the process. Today, by contrast, you get in your car and sit in traffic (and yes, yakking on your phone LOL). And, in some states, you get your license piecemeal....in phases, rather than all at once.
01-19-16, 01:34 PM
#4
Lexus Test Driver
This article gets posted once every year or so, but I agree that it is a sad reality that driving has become uncool.
They'll pry my self-driven internal combustion vehicle from my cold dead hands.
They'll pry my self-driven internal combustion vehicle from my cold dead hands.
01-19-16, 07:53 PM
#5
Lexus Champion
01-19-16, 09:40 PM
#6
Lexus Test Driver
Nothing saves more time than having your own car and using it to it's optimum. I don't see it's popularity faded anytime soon. I whole-heartedly believe if everyone could snap their fingers and wish they owned one, they would. It is the highest level of mobility and life efficiency.
I believe the main reason teens today are not hot on the bandwagon is because of the high cost to do so. Parents today are working two jobs and barely affording rent/mortgage and food. A teen driving and owning a car is simply too expensive, compared to how it was decades ago. Eventually, as they gain their own financial footing in life, they all end up buying cars. This is the new process and will continue to be until the cost of living becomes realistic once again (probably won't).
I believe the main reason teens today are not hot on the bandwagon is because of the high cost to do so. Parents today are working two jobs and barely affording rent/mortgage and food. A teen driving and owning a car is simply too expensive, compared to how it was decades ago. Eventually, as they gain their own financial footing in life, they all end up buying cars. This is the new process and will continue to be until the cost of living becomes realistic once again (probably won't).
01-19-16, 10:14 PM
#7
Lexus Fanatic
I partially, but not totally agree with that......electronic gadgets have at least played some part. But the main culprits today are simply traffic and more restrictions on the road......4-way stops, traffic lights, speed bumps, barricades, DO NOT ENTER signs, etc.... Driving in many areas is such a PITA that many teens just don't want to get involved with t.
Back when I got my license (late 60s), in most places, driving DID mean freedom.....you got in your car and went somewhere, usually enjoying yourself in the process. Today, by contrast, you get in your car and sit in traffic (and yes, yakking on your phone LOL). And, in some states, you get your license piecemeal....in phases, rather than all at once.
Back when I got my license (late 60s), in most places, driving DID mean freedom.....you got in your car and went somewhere, usually enjoying yourself in the process. Today, by contrast, you get in your car and sit in traffic (and yes, yakking on your phone LOL). And, in some states, you get your license piecemeal....in phases, rather than all at once.
For me, Mon to Fri I drive twice, I got to Toronto on Monday morning and the car sits at my apartment for the entire week until Friday when I drive back to see my my husband and family. During the week, I walk 4 blocks to my office every day, I take the metro if I need to get anywhere at a cost of $3 each way, I walk to the supermarket, movies (if I gt), walk to the MLB game and the list goes on. Driving, the cost of going somewhere, paying for parking, traffic is just not worth it.
The new generation who live in cities simply don't need a licence.
Outside of the big city, I pretty much require a car, especially when I go home to Rochester.
Trending Topics
01-19-16, 10:20 PM
#8
Lexus Fanatic
Nothing saves more time than having your own car and using it to it's optimum. I don't see it's popularity faded anytime soon. I whole-heartedly believe if everyone could snap their fingers and wish they owned one, they would. It is the highest level of mobility and life efficiency.
I believe the main reason teens today are not hot on the bandwagon is because of the high cost to do so. Parents today are working two jobs and barely affording rent/mortgage and food. A teen driving and owning a car is simply too expensive, compared to how it was decades ago. Eventually, as they gain their own financial footing in life, they all end up buying cars. This is the new process and will continue to be until the cost of living becomes realistic once again (probably won't).
I believe the main reason teens today are not hot on the bandwagon is because of the high cost to do so. Parents today are working two jobs and barely affording rent/mortgage and food. A teen driving and owning a car is simply too expensive, compared to how it was decades ago. Eventually, as they gain their own financial footing in life, they all end up buying cars. This is the new process and will continue to be until the cost of living becomes realistic once again (probably won't).
01-20-16, 12:23 PM
#11
Lexus Champion
With the move back into the cities, the rise of Uber and Lyft, carsharing, it really doesn't make sense to own a car in the city. However, you'll still need one past the city limits. My car sits outside my building - I only drive it on the weekends or it's pouring rain out.
01-20-16, 12:27 PM
#12
With the move back into the cities, the rise of Uber and Lyft, carsharing, it really doesn't make sense to own a car in the city. However, you'll still need one past the city limits. My car sits outside my building - I only drive it on the weekends or it's pouring rain out.
01-20-16, 08:13 PM
#14
Lexus Test Driver
With the advent of Uber, Lyft, Zipcar etc, transportation does seem to have become more "connected". A new paradigm for sure. Question I have is that more cost effective in the long run. Also from a security standpoint I'd much prefer my wife to have a car no matter if all those services are available. Sometimes you need a vehicle NOW.
01-20-16, 08:40 PM
#15
Lexus Test Driver
Not sure how ppl survive without a car unless ur single maybe.
If you have a baby or young kids, a car is needed.
Getting them to school, running errands etc. Mass transit is a nightmare with babies especially living in cold climates.
How do ppl go grocery shopping without a car??? Lol
All these studies are overblown especially with auto sales at all time highs.
Love of cars is growing if anything especially in emerging markets globally.
If you have a baby or young kids, a car is needed.
Getting them to school, running errands etc. Mass transit is a nightmare with babies especially living in cold climates.
How do ppl go grocery shopping without a car??? Lol
All these studies are overblown especially with auto sales at all time highs.
Love of cars is growing if anything especially in emerging markets globally.