Young People Pose A Threat To The Car Industry



Young Australians have always had a love affair for the humble car. A signal of status, freedom, and maturity – the car has long been number one on the wish list of young people and one of the first real tests in young adult life.

As most young people begin to drive at 16 years of age, the dream of owning and driving your own car has always been a priority..until now.

For the first time in Australia’s history, young people are putting off getting their licence and becoming less likely to purchase their own mode of transport.

The decline in driver licensing in Australia has been recently recorded in the states of New South Wales and Victoria (Australia is one of the few countries that doesn’t document licensing rates on a national whole).

Victoria’s rates reflect that the decline has been slow but steady, with licence obtainment for under-25’s dropping from 77% to 66%.

Australia isn’t the only country where young people are saying no to cars; with the US, Canada, UK, Japan, and Europe all recording declines in licence obtainment for under-25’s.

So what is driving this trend of young people putting the brakes on getting a license?

While research on the topic is still in its early stages, many experts and economic researchers believe that “a job market paying less than it did for young workers in the past and record-breaking student debt” are to blame, making car ownership out of reach for most young people.

In Australia, other factors include changes to driver licensing regulations and heavier restrictions and penalties for learner and P-plate drivers. Most notably, the requirement for learner drivers to log up to 120 hours of supervised driving prior to applying for their provisional license.

Another significant factor is the shift in life course and direction of young people today compared to those of the baby boomer generation.

In the past, many young people would quickly transition from school to full-time work, to marriage and home ownership. Whereas today, young people are staying in school longer, working part-time jobs to accommodate higher education study, living with their parents for longer, and putting off things such as marriage and children.

These changes mean that many young people do not have the resources or financial means available to own and to maintain a car.

The cost of buying and maintaining a car has deterred many young people, with the price of new vehicles and fuel skyrocketing in recent years.

Another factor, one that has been partly to blame in the US, is the availability of public transport. Many young people are now working in cities where a car just isn’t practical. As a result, they are now relying on public transport more heavily as it is both cheaper and more efficient. Public transport has also improved significantly – with access a whole lot easier and more frequent than say, 20 years ago.

All of this research has defined a time of change, with the love of the car eluding many young people.

This change has proven a challenge to the car and auto manufacturing industry, with many car manufacturers now turning to more clever ways of marketing. Instead of flaunting how quickly a car can go from 0-60 km/h, manufacturers are now focusing on things such as fuel efficiency and tech-savvy components such as Bluetooth and voice command.

Overall, the cultural shift of young people today suggests that the car is no longer a symbol status but a symbol of adult responsibility – one that a lot of young people aren’t ready for.

There are many questions this new research begs us to ask – are young people forgoing cars entirely or just until they’re financially secure? Is it a result of young people being more economically and sustainably aware, or are they being pushed out of car ownership due to financial or unwanted circumstance? Are licensing regulations for young people too strict? Is the cost of owning and maintaining a car way too high to justify, both financially and environmentally?

What are your thoughts?


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