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January 2016 MILLENNIALS AND DRIVING (UK)

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Page 1: MILLENNIALS AND DRIVING (UK) - Economist Group · Features worth paying more for in a car Millennials care more about alternative power sources ... driving and owning a car in the

January 2016

MILLENNIALS AND

DRIVING (UK)

Page 2: MILLENNIALS AND DRIVING (UK) - Economist Group · Features worth paying more for in a car Millennials care more about alternative power sources ... driving and owning a car in the

MILLENNIALS ARE GROWING IN SIZE BUT

DRIVING LESS COMPARED TO OTHERS

By 2019, the Millennial population is expected to grow to 17 million

(25% of the UK population)

2

England National Travel Survey 2014

Population estimates: http://www.neighbourhood.statistics.gov.uk/HTMLDocs/dvc219/pyramids/index.html

http://www.thedrum.com/bauer/welcome-real-millennial-generation-digging-deep-their-lives

1,719

3,608

4,874

5,593 5,295

1,231

3,348

4,776

5,799 5,403

17-20 21-29 30-39 40-49 50-59

Age

Average number of miles driven per

person per year

2009 2014

-40%

-8%

-2%

+4% +2%

25%

UK Population 2019

Page 3: MILLENNIALS AND DRIVING (UK) - Economist Group · Features worth paying more for in a car Millennials care more about alternative power sources ... driving and owning a car in the

TRENDS AFFECTING MILLENNIALS 3

Sources: : Institute for Fiscal Studies (IFS), CityLab, Eventbrite UK 2014

Economic

£44K average student loan

debt after a 3 year

university course

Flow to big cities

50k net inflow into London of

young people aged 22-30 from

the UK’s other major cities

Experience > Owning

66% of Millennials feel more fulfilled by

live experiences than purchasing

an item of the same value

Page 4: MILLENNIALS AND DRIVING (UK) - Economist Group · Features worth paying more for in a car Millennials care more about alternative power sources ... driving and owning a car in the

INCREASED TRANSPORT OPTIONS

AVAILABLE FUELLED BY THE ON-DEMAND

ECONOMY

4

Page 5: MILLENNIALS AND DRIVING (UK) - Economist Group · Features worth paying more for in a car Millennials care more about alternative power sources ... driving and owning a car in the

WHAT WE WANTED TO UNDERSTAND

Is this difference in behaviour due to lifestyle differences or is it a generational difference?

Is there room for driving in Millennials’ lifestyle given their urban lifestyles and financial headwinds?

Given their experience over owning mindset, are cars just viewed as a conduit to experiences? Is it just a means to an end and if so, how does that impact how they view car ownership?

5

Page 6: MILLENNIALS AND DRIVING (UK) - Economist Group · Features worth paying more for in a car Millennials care more about alternative power sources ... driving and owning a car in the

METHODOLOGY

Online quantitative study of Economist readers run by

Fox Insight in August 2015

TOTAL RESPONDENTS: 1,171

UK RESPONDENTS: 440

AGE 18-34: 46% AGE 35-54: 34%

£65K+ HOUSEHOLD INCOME: 58%

AVERAGE IN THE UK: £27K

ABOUT THE

RESPONDENTS

6

479 RESPONDENTS

U.S.

440 RESPONDENTS

UK 252

RESPONDENTS

GERMANY

Page 7: MILLENNIALS AND DRIVING (UK) - Economist Group · Features worth paying more for in a car Millennials care more about alternative power sources ... driving and owning a car in the

ECONOMIST MILLENNIAL READERS ARE

MORE AFFLUENT AND INFLUENTIAL 7 ECONOMIST READERS ALSO SPEND MORE ON CARS

Source: Ipsos Affluent Europe 2015 – UK

Personal income £50K+ Economist Millennial readers: Index 133

Total affluent Millennial population: Index 62

People often come to me for advice before making a purchase Economist: Index 132 Total: Index 115

Spend £17K+ on their last car Economist: Index 156 Total: Index 96

Page 8: MILLENNIALS AND DRIVING (UK) - Economist Group · Features worth paying more for in a car Millennials care more about alternative power sources ... driving and owning a car in the

OVER HALF OF MILLENNIAL READERS

LIVE IN BIG CITIES 8

The Economist Group Reader Panel; Age 18-34 n=203, Age 35-54 n=150

17%

8%

27%

49%

6%

7%

34%

54%

Rural

Suburban

Town/Small city

Major metropolitan city

Type of area that you live in

18-34 35-54

Page 9: MILLENNIALS AND DRIVING (UK) - Economist Group · Features worth paying more for in a car Millennials care more about alternative power sources ... driving and owning a car in the

FOR BOTH GROUPS, PUBLIC TRANSPORT

IS MAINLY USED IN MAJOR CITIES 9 WHILE THOSE IN OTHER AREAS MAINLY DRIVE FOR THEIR COMMUTES

The Economist Group Reader Panel; Age 18-34 n=203, Age 35-54 n=150

3%

6%

7%

4%

12%

69%

0%

2%

5%

25%

19%

50%

Other

I do not commute

regularly

Cycling

Walking

Driving

Public transportation

Major metropolitan city

18-34 35-54

3%

14%

5%

18%

9%

51%

1%

2%

13%

18%

21%

45%

Other

I do not commute

regularly

Cycling

Public transportation

Walking

Driving

Small city, suburbs or rural

18-34 35-54

Main transport method for daily commute

Page 10: MILLENNIALS AND DRIVING (UK) - Economist Group · Features worth paying more for in a car Millennials care more about alternative power sources ... driving and owning a car in the

CONVENIENCE IS MOST IMPORTANT

TRANSPORT FACTOR FOR ALL AGES 10 BUT CONVENIENCE, CONTROL AND COSTS ARE EVEN MORE IMPORTANT TO

MILLENNIALS

The Economist Group Reader Panel, Base: UK respondents 18-34 n= 199, 35-54 n= 135,

16%

31%

21%

30%

41%

52%

20%

24%

30%

40%

46%

61%

Commuting is also a way for me to exercise (e.g.

walking or cycling)

Ability to multi-task while commuting

I like being in control rather than rely on the

schedule of others

This is a cost-effective way for me to travel

This transportation option saves me the most time

Convenience – it’s easiest for me to access this

mode of transport

Most important factors in choosing the mode of transportation for

daily commute

18-34 35-54

Page 11: MILLENNIALS AND DRIVING (UK) - Economist Group · Features worth paying more for in a car Millennials care more about alternative power sources ... driving and owning a car in the

OVER 80% OF MILLENNIAL READERS

HAVE THEIR DRIVING LICENCE

Do you currently have a valid driving licence?

18-34: 84% yes

35-54: 98% yes

11 ECONOMIST READERS ARE MORE LIKELY TO HAVE THEIR DRIVING LICENCE

The Economist Group Reader Panel, Base: UK respondents 18-34 n= 203, 35-54 n= 150, TNS UK Automotive Study 2013

General population

18-34: 67%

35-54: 82%

Page 12: MILLENNIALS AND DRIVING (UK) - Economist Group · Features worth paying more for in a car Millennials care more about alternative power sources ... driving and owning a car in the

11%

18%

33%

56%

71%

21%

21%

41%

71%

78%

My parents/friends thought it was a good

idea to get my licence

I wanted to buy a car

I considered it a rite of passage to pass my

driving test

Driving is a good life skill to have

I wanted to drive

Which of the following best describe the main reasons for why you

decided to get your driving licence?

18-34 35-54

MILLENNIALS ARE MORE LIKELY TO SEE

DRIVING AS A GOOD LIFE SKILL 12

The Economist Group Reader Panel, Base: UK respondents 18-34 n= 170, 35-54 n= 147

Page 13: MILLENNIALS AND DRIVING (UK) - Economist Group · Features worth paying more for in a car Millennials care more about alternative power sources ... driving and owning a car in the

BUT MILLENNIALS ARE ALSO EQUALLY AS

LIKELY TO ENJOY DRIVING 13

The Economist Group Reader Panel, Base: UK respondents 18-34 n= 170, 35-54 n= 147

49%

61%

57%

63%

I enjoy the drive as much as the destination itself

Driving is fun – I enjoy driving on challenging

roads

To what extent would you agree with the following:

18-34 35-54

Page 14: MILLENNIALS AND DRIVING (UK) - Economist Group · Features worth paying more for in a car Millennials care more about alternative power sources ... driving and owning a car in the

NEARLY 3 IN 4 MILLENNIAL READERS

CURRENTLY OWN OR LEASE A CAR 14

The Economist Group Reader Panel, Base: UK respondents 18-34 n= 170, 35-54 n= 147, TNS UK Automotive Study 2013

Do you currently own or lease a car?

18-34: 71% yes

35-54: 88% yes

General population 18-34: 68% 35-54: 81%

51% of Millennial

respondents agree that it is

‘very important’ for them to

own a car in the future

Page 15: MILLENNIALS AND DRIVING (UK) - Economist Group · Features worth paying more for in a car Millennials care more about alternative power sources ... driving and owning a car in the

1 OUT OF 3 MILLENNIAL READERS PLAN

TO BUY A CAR IN THE NEXT 2 YEARS 15 MILLENNIAL READERS ARE JUST AS LIKELY AS OLDER READERS TO BUY A CAR IN

THE NEXT 5 YEARS

The Economist Group Reader Panel, Base: UK respondents 18-34 n= 203, 35-54 n= 150

34%

25% 23%

18%

38%

34%

9%

19%

Yes, within the next

1-2 years

Yes, within the next

2-4 years

Yes, within the next

5 years

No, not within the

next 5 years

Do you plan to buy or lease a car in the next 5

years?

18-34 35-54

Which of the following do you intend to do in the next 2 years?

(Age 18-34 respondents) 44% career advancement at current job 39% move house or relocate 17% have a baby

Page 16: MILLENNIALS AND DRIVING (UK) - Economist Group · Features worth paying more for in a car Millennials care more about alternative power sources ... driving and owning a car in the

FOR BOTH GROUPS, CAR OWNERSHIP IS

MOTIVATED BY FREEDOM AND NEED 16 HOWEVER FREEDOM TO GO ANYWHERE IS MORE IMPORTANT TO MILLENNIALS

The Economist Group Reader Panel, Base: UK respondents 18-34 n= 120, 35-54 n= 130

4%

18%

13%

35%

37%

54%

54%

62%

6%

8%

10%

35%

42%

54%

61%

78%

Other

I like to keep a car for emergencies

I wanted to buy a car to treat myself or my

family

I like to drive

I wanted a car to be able to visit my family and

friends

It’s convenient to my lifestyle

I need it - it’s one of my primary modes of

transportation

I like the freedom to go anywhere at any time

Why did you decide to buy or lease a car?

18-34 35-54

Page 17: MILLENNIALS AND DRIVING (UK) - Economist Group · Features worth paying more for in a car Millennials care more about alternative power sources ... driving and owning a car in the

CAR OWNERSHIP USED TO EQUAL

IDENTITY AND STATUS 17 BUT TODAY’S TECHNOLOGY AND SOCIAL MEDIA HAVE ALTERED THE DEFINITION

OF IDENTITY AND STATUS

Then Now

Page 18: MILLENNIALS AND DRIVING (UK) - Economist Group · Features worth paying more for in a car Millennials care more about alternative power sources ... driving and owning a car in the

THE CAR THEY DRIVE IS LEAST LIKELY TO

REPRESENT MILLENNIALS’ IDENTITY 18

HOBBIES AND SENSE OF FASHION ARE MUCH MORE IMPORTANT TO MILLENNIALS

The Economist Group Reader Panel, Base: UK respondents 18-34 n= 203, 35-54 n= 150

18-34 35-54

My hobbies/interests 68% 56%

My nationality/cultural

heritage 54% 54%

My career standing 52% 53%

The city or neighbourhood

where I live 28% 32%

My sense of fashion 23% 14%

The technology products

that I own 15% 10%

My online presence 12% 8%

Other 11% 12%

The car that I drive 5% 14%

Thinking about your own personal 'identity', which

of the following come to mind?

Page 19: MILLENNIALS AND DRIVING (UK) - Economist Group · Features worth paying more for in a car Millennials care more about alternative power sources ... driving and owning a car in the

MILLENNIALS SEE CARS AS AN INDICATOR

OF STATUS OVER OTHER THINGS 19

THIS BODES WELL FOR LUXURY AUTO BRANDS WHICH CAN SERVE AS STATUS SYMBOLS

The Economist Group Reader Panel, Base: UK respondents 18-34 n= 203, 35-54 n= 150

18-34 35-54

My career standing 74% 65%

How much money I earn 37% 33%

The city or neighbourhood

where I live 36% 36%

The car that I drive 19% 15%

Other 16% 19%

My sense of fashion 14% 11%

Technology products that I

own (such as my phone,

tablet, computer)

13% 9%

The watch/jewellery I wear 8% 10%

Which of the following best convey 'status' for you

personally?

Page 20: MILLENNIALS AND DRIVING (UK) - Economist Group · Features worth paying more for in a car Millennials care more about alternative power sources ... driving and owning a car in the

TOP PURCHASING FACTORS ARE FUEL

EFFICIENCY AND AFFORDABLE PRICE 20 FUEL EFFICIENCY IS MORE IMPORTANT TO MILLENNIAL RESPONDENTS WHILE SIZE

OF CAR IS MORE IMPORTANT TO THE OLDER GROUP

The Economist Group Reader Panel, Base: UK respondents 18-34 n= 203, 35-54 n= 150

1%

2%

5%

13%

13%

16%

17%

20%

22%

25%

26%

29%

32%

33%

44%

Payment options

Model year

Car security

Exterior design

Environmental impact/friendliness

High performance (power…

Safety rating

Car technology/innovation

Comfort

Size of car

Brand reputation

Enjoyable to drive

Reliability

Affordable price

Fuel efficiency / gas mileage

Top 3 factors in buying/leasing a car

(Total respondents)

18-34 35-54

Fuel efficiency 52% 37%

Affordable

price

33% 32%

Size of car 20% 31%

Environmental

impact

15% 9%

Notable differences

Page 21: MILLENNIALS AND DRIVING (UK) - Economist Group · Features worth paying more for in a car Millennials care more about alternative power sources ... driving and owning a car in the

RESPONDENTS WOULD BE MOST LIKELY TO

PAY MORE FOR COMFORT AND SAFETY 21

The Economist Group Reader Panel; Age 18-34 n=203, Age 35-54 n=150

Safety technologies

18-34: 58% 35-54: 59%

Comfort while sitting

in the car

18-34: 60% 35-54: 62%

Alternative power sources

(e.g. electric or hybrid)

18-34: 49% 35-54: 40%

Connectivity tech(e.g.

connect to smartphone)

18-34: 55% 35-54 : 53%

Higher quality interior

design

18-34: 34%

35-54 : 48%

Features worth paying more for in a car

Millennials care more about alternative power sources while the older generation cares much more about high quality interior design .

Page 22: MILLENNIALS AND DRIVING (UK) - Economist Group · Features worth paying more for in a car Millennials care more about alternative power sources ... driving and owning a car in the

TAKEAWAYS

Millennials today are more likely to live in big cities where driving is less suitable but they are still interested in

driving and owning a car in the future.

Continue to communicate to Millennials as they’re interested in driving but may not be in a position to

purchase a car at this stage in their lives.

Compared to older readers, Millennial readers are more motivated by convenience, costs and control

when it comes to a commute.

A focus on affordable costs makes Millennial readers more pragmatic shoppers which has implications on

how to communicate fuel efficiency and affordability. For convenience, are there technologies that can

help with convenience – e.g. connectivity technologies that can sync the car with one’s phone?

Owning a car represents two main benefits to Millennial readers. They are more likely than the older

audience to appreciate the freedom to go anywhere that comes with a car. Secondly, Millennials still see

cars as an indicator of status over other things which bodes well for luxury car brands.

These are traits that auto brands can use to resonate with Millennials through their Marketing

communications

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