Given a choice between a new Toyota Corolla or the latest iPhone, 16-year-old Allison Katz of Irvine, Calif., says that’s an easy one.
She’d take the phone.
Texting drives her social life. She doesn’t have a driver’s license and hasn’t rushed to get one.
“I mostly stay near my house except for soccer practice, and then Mom or Dad drives,” Katz said.
It’s enough to keep an auto executive awake at night.
Thirty years ago, nearly half of 16-year-olds had a driver’s license, their passport to independence. By 2010 that figure had dropped to 28 percent, according to research from the University of Michigan.
The cultural shift is largely the result of technology that keeps teens connected to one another and the coolest new stuff without ever getting into a car. All the adolescent staples – music, movies, clothes, books – are available with a mouse click or smartphone swipe.
Driving once allowed teens “to go where you want, do what you want, see who you want and, in some sense, be who you want,” said Lindsey Kirchoff, 23, of marketing software company HubSpot and a millennial trend marketing consultant. “The Internet has made the freedom that comes with a license anticlimactic.”
Getting a driver’s license has also gotten a lot tougher. For starters, today’s teens are more pressed for time than their parents were. Stiff competition for college admissions means prep courses, SAT tutoring, team sports and other activities to buff up college resumes.
Meanwhile, driver’s education classes, once a staple in U.S. high schools, have fallen victim to budget cuts, making it harder for kids to get the training.
This generation’s waning interest in driving has serious long-term consequences for automotive sales and marketing. Before selling young buyers on any particular model – say, a Honda Civic versus a Chevrolet Cruze – automakers have to convince them that they need a car at all.
Drivers ages 15 to 20 accounted for 3.4 percent of new-car sales in 1985, or about 500,000 vehicles, according to CNW Research, an automotive market research firm. That dropped to 2 percent last year, or just 300,000 vehicles.
The implications for automakers go deeper than a few lost or delayed sales to young drivers. Many of today’s teenagers won’t form the same emotional attachment to driving as their parents, who aspired to luxury or performance cars as status symbols.
Many teens without licenses say they will eventually learn to drive. But they won’t have “parked” up. Fast food will be walk-up rather than drive-through. They won’t make formative memories in cars or develop a passion for driving.
Status now comes from gigabits instead of horsepower, from the newest iPad with Retina display rather than a BMW.
This generation probably will buy fewer cars during their lifetime than their parents, concedes Jack Hollis, who heads marketing for the Toyota car brand in the U.S. That’s a function of competing interests, increased auto durability and recession-honed pragmatism.
Nearly three-quarters of millennials, ages 18 to 34, would rather shop online than in stores, according to a December survey by Zipcar, the hourly car-rental company. Given the choice of losing their phone or computer or their car, 65 percent would go without their car.
“This is the Xbox generation,” said Scott Griffith, Zipcar’s former chief executive. “They manage their social lives as easily on the information highway as we did on the paved highway.”
The trend holds for older teens. In 1983, 69 percent of 17-year-olds had licenses, compared with 46 percent in 2010; for 18-year-olds, the percentage declined from 80 percent in 1983 to 61 percent in 2010.
“I know a lot of people who are waiting until they are 18,” said 18-year-old Cat Blumberg, who hopes to pass her driver’s test this month. “If I had a job, I would feel more motivated to get my license.”