Automotive Blog

Demographics – how they help, not hinder, change in the car industry

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Much has been written about how young people have no interest in cars or driving them, and how this will hasten the end of car ownership, to be replaced by car and ride sharing – or robo-taxis that will transport this generation autonomously, leaving them to go online with their smartphones.  As part of our research into the Dealer of Tomorrow, we have looked for hard data to test these claims, and found them badly wanting.
There are some general demographic and economic trends that everyone understands, and that the data supports in a wide range of markets.  Populations as a whole are ageing, with longer life expectancies and lower mortality rates amongst the very young.  Wealth is being accumulated by the elderly, perhaps at the expense of the younger generations whose earnings have been held back by a decade of austerity, higher education costs that some carry into their working lives as debt, and rising property prices and rents that absorb a greater proportion of their income.  Meantime, roads are more congested, public transport is improving and includes innovative options such as Uber and BlaBlaCar, and the contribution of private cars to urban pollution is highlighted by environmental groups and governments.
It seems logical that these factors would come together to deter young people from wanting to drive, and by extension want in time to own their own car.  Yet, in practice, the facts do not support this conclusion.  We have looked at available data from four of the main European markets and the USA, and this paints a different picture.  In the charts below for France, Germany, Spain and England (data for the whole of the UK is not available), the percentage of driving licence holders amongst different age cohorts has risen in each successive time series, with only minor glitches.
Taking the Spanish data for example, having a driving licence really was a privilege in 1976 with under 40% of the 30-39 year old age group holding a full licence, but 10 years later, almost 70% of this age cohort, now aged 40-49 could drive.  The proportion of young people, up to 20 years old, who could drive remained around 10% for three decades, but from 2005, this has been steady at 30%.
This is against a background of rising populations, so when the percentage is rising, the absolute number of licence holders is rising even faster.  In England, in the four decades from 1976 to 2016 the total number of licence holders has doubled from 16.5 million to 32.2 million.  In Italy, where only partial data is available, the number of licence holders grew from 31.7 million to 36.7 million in just one decade from 2007 to 2017 at a time when the economy was in recession much of the time.
Looking in more detail at the English data, the number of 17-20 year old licence holders grew by 3 percentage points or 68,000 people from 1976 to 2016.  The rate at which each age cohort acquired a driving licence is little different across the four groups of those who first became eligible in each of the four decades.  In 1976, 28% held a licence by age 20, rising to 63% by age 30.  Thirty years later, a slightly higher number (31%) had licences by 20, but this had risen to 64% ten years later.
SY Dl Blog 2
Over the same four decades from 1976 to 2016 the number of licence holders aged 60 or more than tripled from 2.4 million to almost 9.1 million.  This is the age group with money (average age of a new car buyer in the UK for many brands is in the 50s), the time to travel, and possibly greater reluctance to use public transport.  They also enjoy better health than forty years ago, and with ADAS features “looking after them” in the car, they may well drive further than they have done in the past.  All good news if you are in the business of making, selling and servicing cars!
In short, the interest in driving seems undiminished over forty years, and with a growing, ageing, healthier population, the absolute number of qualified drivers seems likely to continue increasing.  Each one is a potential car owner – it is up to the industry to come up with the solutions that address the other pressures that may constrain car use and ownership.
Written by Steve Young

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