The peak demand for auto sales in the United States may be held down by 2 million units annually over concerns about the buying practices of Generation Y customers who are currently pressured financially. This group -- composed of buyers between 18 and 34 years of age -- tend to connect online rather than in person.
R.L. Polk & Co. said that the rate of car sales in the U.S. of this group fell to 11 percent in April 2012, a 17 percent drop for the same age group in April 2007, before the recession. Deloitte LLP said that 4G gets this group more excited than a V8 could. This group – which members were born from 1981 to 2001 -- comprises around 80 million consumers in the U.S. The car represents independence but there are now more ways for Generation Y to connect to the outside world.
Alexander Edwards, president of the automotive division of a consumer-research firm based in San Diego, named Strategic Vision, said that the car symbolizes freedom. He explained that the difference with what happened in the past years is that a Gen Y person now can do many various things to get that freedom. What’s at stake is the question of whether Gen Y would affect the recovery in vehicle sales.
In the first seven months, the U.S. sales of cars and light trucks increased by 14 percent to 8.43 million units. It is now on course to reach a total of over 14 million for the full year of 2012. This would be the best year that the company has had since 2007. However, this figure still falls behind the annual average of 16.8 million from 2000 until 2007.
The US automotive crisis in 2008 and 2009 particularly hit sales of cars and light trucks in the country. From 16.09 million cars and light trucks in 2007, the figure took a huge drop in 2008 to 13.19 million units. Another huge decline was posted in 2009, when US sales of car and light trucks dipped to 10.4 million units. The US auto industry recovered in 2010, but still not at the same level as prior to 2008.
Dan Luria, a labor economist at Michigan Manufacturing Technology Center in Plymouth, Mich., cited a few reasons for these preferences. He pointed out the youngest workers would be paid the lowest wages and that this group tends to prefer gadgets over cars. This is why the average U.S. auto sales are capped at around 15 million each year. Sales had peaked at 17.4 million cars and light trucks in 2000.