Gen Y and Its Effect on Car Ownership
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- Dwain Warren
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1 Are the wheels coming off for Gen Y?
2 It s true that car ownership is lower among Gen Y 68% of Gen Y are car owners 81% of Gen X are car owners
3 cars just aren t playing such a big part in their lives as they do for Generation X Share of journeys by car 45.5% 64.0% Gen Y Gen X
4 But travel by car already dominates their behaviour Top 5 modes of transport 45.5% 25.2% 10.1% 5.4% 3.7% Own car - Petrol/Diesel Going on foot/ walking Bus/Tram Train Bicycle you own
5 Gen Y think cars are as wonderful as do Gen X Own car Gen Y 109 Low customer retention High customer retention Gen X Own car
6 The potential for cars among Gen Y is remarkably similar to Gen X 67% 24% 91% 82% 8% 90% Have a driving licence Intend to get one in the future
7 Yet although the desire for cars is there, the reality is both Gen X and Gen Y are considering alternatives Gen Y Petrol and diesel cars Gen X 45.5 % 41.5 % -10% 64.0 % Share of journeys 58.0% Desired share of journeys -10%
8 Gen X are already cutting back on their usage Change in annual mileage in last 12 months % Gen Y Gen X Increased a lot/little Stayed the same Decreased a lot/little 15 24
9 Ownership cannot be taken for granted Anticipated change in number of cars owned - next 2 years % 74 Gen Y 57 Gen X Increase Stay the same Decrease Don't Know
10 Factors shaping attitudes towards car ownership
11 UK s generation Y felt the pinch of recession harder than most : 21% unemployment and wages down by 12% for those in work.down 12% for those in work People who begin their careers without work are likely to have lower wages and greater odds of future joblessness than those who don t. A wage penalty of up to 15-20%, lasting for around 20 years, is common. Source: The Futures Company
12 The importance of cars is shifting and structural changes are accelerating questions about car ownership In the past decade all of England s 8 major cities have grown, due to reinvestment in city centres and rising immigration The number of single person households has risen by 1 million between , now representing 30% of UK households Source: The Futures Company
13 These changes are affecting the way people think about car ownership 42% of UK drivers would consider giving up their car and sharing one with other people. 46% of drivers aged 18 to 24 said they would choose internet access over owning a car Source: The Futures Company
14 At the same time the cost of motoring has increased Drivers now pay an average of 1,556 per year more to own and run a vehicle than they did in x the rate of inflation EU s ban on gender-discriminatory insurance means many women s premiums are already rising and for those aged 17-18, rising by 50% Source: The Futures Company
15 New business models are providing many of the benefits of vehicle ownership without ownership itself. Auto companies as mobility providers Improvements in public transport Car clubs and car sharing These shifts are shaping how Generation Y calculate the costs and benefits of vehicle ownership Source: The Futures Company
16 How could the industry respond?
17 Three areas offer potential Technological evolution Service models Pushing the experience
18 Push technological developments that reduce motoring costs and enhance time use Source: The Futures Company 45% of UK drivers want Smart route planning with options for most economical, fastest and safest route
19 Service models: provide access to mobility rather than ownership Innovative rental, vehicle sharing and leasing models Source: The Futures Company
20 Example : The Flatshare Carshare Need gap Younger city dwellers find it difficult to get their foot on any ladder. They want a car, but it is too big a commitment. Target consumer Better by Public Transport Consumer insight Car sharing with people I know would be appealing if the costs and administration were manageable Example idea Customers collectively buy a dealer approved used car. Usage (and running costs e.g. Petrol, insurance) are managed through built in telematics which identifies who uses how much (delivered by app)
21 Engage Gen Y in ways they can relate to Provide vivid experiences Audi showroom Piccadilly Involve Gen Y in vehicle development Social Media inspired 370 Source: The Futures Company
22 Consider how other brands engage Gen Y through innovative lease schemes 'O2 Lease' scheme : new Apple handset for a year without paying an upfront fee and return the phone after 1 year Source: The Futures Company
23 Example : Our range is your garage Need gap People make many different kinds of journey. Whilst cars in general can deliver effectively on many of these, individual models cannot cover the range of needs Target consumer Metro Managers Consumer insight A little car would be great for during the week but when we go on holiday we need the space of the estate car Example idea Customers sign a contract with the local dealer. At the core is a particular model, but for 30 days a year, they can switch to a different model in the range which better meets their needs. The dealer has agreements with 6 leading insurance companies that no change is required to the policy.
24 It is not the strongest of the species that survives, nor the most intelligent, but the one most responsive to change Charles Darwin
25 Thank you Andy Turton Global Development Director TNS Automotive TNS ul. Wspólna 56, Warszawa
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