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Brian Riesbeck

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The Future of the Car and the Consumer

Everyone wishes they had a crystal ball to see what the future of the car industry will be like. Sadly no such thing exists. But there are indicators to give us a very good notion. While nothing is set in stone, many of these changes will likely occur and change the way that cars are bought, sold, and made.

 

Many automotive insiders cast doubt on the younger generations and their purchasing power. Generation Y and the Millennial generation, coming of age in an era of two wars and the worst economic downturn within almost a century, have been largely overlooked by the automotive industry simply due to lack of purchasing power. But as the economy turns up and the current generation of 20-to-30-somethings finally reach financial security they will this is surely due to change. For lack of a better term the 2001 Ford Taurus that they inherited from their mom will give out and they sure will be looking for something better, and to better understand this new demographic it is good to better understand how the world around them shapes their worldview.

 

According to the Energy Information Administration the United States reliance on foreign crude oil has been on a steady decline since its high in 2005. Furthermore 100% of new energy creation within the United States in 2012 was from green, eco-friendly energy sources. The use of oil in industrial processes is also on the decline. For a generation that is already haunted by a decade of war that was in part due to the United States reliance on foreign energy sources and who already wishes to not have to sacrifice the niceties of life in order to pay at the pump the idea of moving over to sustainable alternative means of fueling their cars will be an attractive one. Already in Europe this trend can be seen as Western European nations have moved away en mass from conventional gasoline to diesel and bio-diesel vehicles. That move was ushered in part due to government tax breaks on said vehicles and as well as the attractiveness of saving money at the pump. The shift away from gas powered vehicles in the US has been headlined by none other than a European company, Volkswagen, and in 2013 sales of their diesel-powered cars far outstripped even their own projections.  And while some older Americans, haunted by the loud and smelly diesel Oldsmobiles of the 1980’s, may have reservations those who do not remember such nightmares are more quickly to grab onto the opportunities to save at the pump. Other cars such as hybrids and electrics have seen jumps in sales over the last few years. As these technologies continue to improve and the means of maintaining them become more widespread expect this trend to continue. Younger drivers have already shown they are not as interested in traditional buying factors such as brand loyalty and horsepower and more interested in factors like fuel economy.

 

Another of the newest trends in the automotive industry is its inclusion into the so-called Internet of Everything. As of this writing major automakers have signed contracts with such Silicon Valley giants as Google and Apple in order to produce a new generation of cars with integrated operating systems that will provide drivers with services such as directions, restaurant choices, and live traffic updates. This development is largely due to the demand to younger generations and is a very logical step in direction. Drivers, especially younger drivers, want and even need to stay connected. Within just a few years there will no longer be a need for a friend with a smartphone in the passenger seat to look for the closest Greek restaurant or which roads to avoid due to a head-on collision. Rather the driver will be able to speak and receive relevant data almost instantly, as well as keep tract of their friends who they are actually meeting for dinner. What may seem to be added gadgets and gizmos to older generation will be seen as an increase in utility and user-friendless to younger ones.

 

While such staples of the American automotive experience as the Shelby Mustang and the Ford F150 will not disappear anytime soon, even these brands too have been influenced by the demands of the modern young consumer. For its 2014 model year the Ford F150, the most widely purchased vehicle in the US, introduced a new all-aluminum frame, decreasing the truck’s weight by some 700 pounds and increasing fuel economy. And for its 2015 model years Ford has openly stated that they are considering development of hybrid, diesel, and even electric models for their signature Mustang. 2014 also marks the year that Apple’s iOS and Google’s Android operating systems could be introduced in cars.

 

Whatever the future may hold, American automakers will meet the demands of the newest automotive consumer and begin to produce lighter, smaller, cheaper, more integrated, and alternatively fuelled cars.

 

For more information about cars and car buying check out our blog and the Articles section of our main site Carlotfinance.

 

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