Why are we buying fewer cars?
Car manufacturers are facing a big shift in the way that people view car ownership and in the basic interest people have in owning a car. The trend is most pronounced and growing fastest amongst the millennial generation – the group that car manufacturers might have looked to traditionally as their future market.
In 2017, a KPMG study for Business Insider Intelligence has even predicted that by 2025 over 50% of people believe that half of today’s car owners will no longer want to own a car. It’s a massive shift and in an industry that plans years ahead a stark warning for fast changing consumer sentiments and behaviours.
Millennials are identified as leading this new trend. As this groups comes to maturity and moves to the city in search of work, they are adopting lower cost, resource-sharing, and more convenient on-demand services. Two key factors are also seen to influence their choices:
- Public transportation is getting better
More and more people are using public transport. In the Asia-Pacific region, 2.29 billion more passengers used public transport from 2016 to 2017 alone. As smart and connected cities evolve, we are anticipating further transformation of the transportation system, improving connections and convincing more people to abandon the personal car as a preferred option.
Ride-sharing has been growing rapidly over recent years. While driving and owning a car is still enjoyable, it also means paying for fuel, insurance, maintenance, and repairs – all of which require a large chuck on the household budget. We believe that millennial consumers will opt for ride-sharing services more and more for the on-demand convenience and low-cost.
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