The reports out of Detroit are bullish. Despite a still-dumpy national economy, auto sales are climbing back to pre-recession numbers. Analysts predict that more than 14 million rigs will be sold this year with 15 million more vehicles hitting the road in 2013.
It's great news. Factories are cranking up, the industry is shaking off its so-called legacy costs and workers are returning to their jobs. Automakers are moving the metal all right, but as a bright new era dawns for Detroit and its Asian and European competitors, there's mounting evidence that the industry could be facing its biggest challenge yet: Just who the heck is going to buy your cars 10 or 20 years down the road?
If several studies and reports are to be believed—not to mention the anecdotal evidence among my brood of millennials—you had better hope that baby boomers discover a fountain of youth, because your target market doesn't appear to be the mercurial Generation Y.
A Federal Highway Administration report noted that as of 2010, 26 percent of millennials—that's more than a quarter of our kids who fall into the age range of 17 to 32—don't have a driver's license. Additionally, according to auto-shopping site Edmunds.com, the number of new cars purchased by 18- to 34-year-olds in the U.S.—that's about 80 million people—dropped 30 percent in the past five years.
Sure, you can chalk that up to a generation of Juniors living at home until they're 30 and borrowing Dad's Crossfire or Mom's Touareg to go play video games with their buddies. But the shift in millennials' transportation choices reveals a distain for the traditional suburb-to-office commute in favor of living where they want and commuting to work by means other than a car of their own.
The term "telecommuting" seems like such a quaint, 1990s anachronism, but the fact is worker mobility is playing an ever-increasing role in where and when people work. Today's workforce is more mobile and wired than ever before, and it's no secret that Generation Y especially craves that connectivity. How millennials commute to work is becoming less of an issue than where they decide to live.
It's hard to believe, but a Deloitte study notes that 46 percent of 18- to 24-year-olds would choose Internet access over owning a car. An Internet connection is more important to a millennial than tooling to work in a Toyota? Perhaps the new symbol of youthful freedom isn't the day you get your driver's license or buy your first car, but instead is celebrated by the first app you download onto your new smartphone.
When gas prices spiked this past spring, my two youngest children simply moved closer to their jobs. It's not out-of-the-box thinking by any means, but it points out that, unlike their parents and grandparents, millennials and generations to follow are less likely to be beholden to a car to get them to work.
While I'd suffer a severe bout of separation anxiety without my car, several colleagues and neighbors here in Chicago get along just fine without one. Public transportation is laughably convenient, and smartphone apps with to-the-second tracking of buses and trains make traveling that much easier and faster. Zipcars and other car-on-demand services also are cutting into the need to own and insure a vehicle.
U.S. Census data and research from the Brookings Institution show that urban populations are growing faster than their suburban populations. And we're seeing smart companies seeking the best workers following that talent trail from the suburbs to the city. Earlier this summer, Google Inc. announced the relocation of 3,000 Motorola Mobility Inc. jobs into downtown Chicago from its suburban offices, in part to gain access to a wider array of young, eager talent living in the city.
While the auto industry has proven in recent years to be more adaptable and responsive to consumers, a car simply doesn't hold the panache it once did for young people. Cruising Broadway with your friends is losing out to connectivity with the world on a Friday night. It's a road that employers should follow, as well.
Rick Bell is Workforce's managing editor. Comment below or email email@example.com.
Workforce Management, October 2012, p. 42 -- Subscribe Now!