Gen Y likes tech-savvy green cars, but cost a barrier: study

Thu Jan 16, 2014 6:28pm EST
 
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By Deepa Seetharaman

DETROIT (Reuters) - Young U.S. consumers want vehicles outfitted with expensive technology that boosts gas mileage and keeps them safe and connected, according to a survey published on Thursday. But the high cost of car ownership remains a stumbling block.

These consumers, ages 19 to 36 and known as Generation Y, are also three times more likely than their parents to abandon car ownership if costs escalate, consulting firm Deloitte LLP said in the study.

The findings suggested that worries that the millennials, as members of Gen Y are also known, are eschewing vehicles altogether may be overblown. But winning them over means striking a balance between making cars affordable as well as technologically advanced.

"Affordability is the mantra for Gen Y consumers who don't already own or lease a vehicle," Craig Giffi, head of Deloitte's U.S. automotive practice, said in a statement.

Millennials account for some 80 million people in the United States, rivaling the baby boomer generation. Their sheer size makes them something of the next big emerging market for automakers like General Motors Co and Ford Motor Co.

Many delayed buying cars during the economic downturn and are open to options like renting cars from Zipcar. Their experience with smartphones has shaped their expectations for car ownership.

"When they do buy cars, millennials' expectations of car ownership could parallel their expectations of technology - where upgrading every two years is the norm," Ford Chief Operating Officer Mark Fields said during a keynote speech at the Automotive News conference this week.

More than 2,000 of the survey's respondents were U.S. consumers, of which 677 were part of Generation Y. Of the younger group, 86 percent owned or leased a vehicle.   Continued...