Good News for the Automotive Industry – Duff & Phelps Study Reveals: Millennials Want Their Own Car

Munich – The global automotive industry is currently facing serious challenges: carmakers have to contend with declining sales figures at a time when they also need to invest significantly in electric powertrain technology, connectivity and autonomous driving. The current climate change debate, which is mostly driven by the efforts of younger generations and puts strain on the automotive industry, only exacerbates these effects. However, there is good news for industry players—according to a recent study by Duff & Phelps, the global advisor that protects, restores and maximizes value for clients, the millennial generation’s attitude towards cars is less skeptical than generally assumed. The number of German millennials who own or lease a car is surprisingly high at 81 % (79 % EU-wide) and half of all EU respondents who do not currently have a car, plan to acquire one in the next five years (42 % in Germany). For the automotive industry, this could be a welcome reprieve from the rapid transformation which the industry is currently experiencing.

  • 81% of German millennials currently own or lease a car (79% EU-wide)
  • For roughly 73 % of German millennials, access to a car is a necessity (83% EU-wide)
  • Respondents still prefer to buy cars with combustion engines (Germany: 61%, EU-wide: 53%) rather than electric or hybrid vehicles (Germany: 32%, EU-wide 39%)

For its Millennials and Auto Trends Report, Duff & Phelps surveyed 2,150 millennials between the ages of 23 and 38 from across the world on car-buying preferences and the factors driving these trends. In Europe, millennials from Germany, France, Italy and the UK were surveyed for the study.

The tendency of millennials to be city-dwelling and to use public transportation seems to not dampen their interest in car ownership. According to the study, general environmental concerns have no negative impact on this sentiment either. A majority of millennials consider a car to be necessary for independence (70 % in Germany, 77 % EU-wide) and convenience (51 % in Germany, 66 % EU-wide). These are the primary reasons why car ownership is still more popular than options such as ride-hailing, car-sharing or public transportation. A significant majority of respondents (over 80% in Germany and also EU-wide) say that they use services such as car-sharing or ride-hailing less than once a week or not at all.

Even though the number of German millennials surveyed indicate they would prefer to buy an electric or hybrid vehicle (32% and EU-wide 39%), a clear majority of 61% still favors combustion engines; EU-wide, that is still the case for a relative majority of 53%. The high acquisition cost of electric vehicles and the important role that the price of a car plays for millennials are the likely reason for this sentiment. Seventy percent of both German and EU-wide respondents consider price to be a crucial aspect during car-buying decisions, followed by safety (59% in Germany, 30% EU-wide), fuel efficiency (44% in Germany, 59% EU-wide) and style (24% in Germany, 34% EU-wide).

Andreas Stöcklin, Managing Director and Germany Country Head at Duff & Phelps, comments: “Our Millennials and Auto Trends Report provides insight into the preferences of generation that most assumed would choose transportation alternatives to car ownership. The results of our global study clearly indicate that millennials can drive the automotive industry forward and help shape the fundamental transformation process it is currently undergoing. Carmakers should, however, consider taking into account the preferences of millennials, which represents a third of the global population, especially when making investment decisions.”

About Duff & Phelps
Duff & Phelps is the global advisor that protects, restores and maximizes value for clients in the areas of valuation, corporate finance, investigations, disputes, cyber security, compliance and regulatory matters, and other governance-related issues. We work with clients across diverse sectors, mitigating risk to assets, operations and people. With Kroll, a division of Duff & Phelps since 2018, our firm has nearly 3,500 professionals in 28 countries around the world. For more information, visit www.duffandphelps.de.

M&A advisory, capital raising and secondary market advisory services in the United States are provided by Duff & Phelps Securities, LLC. Member FINRA/SIPC. Pagemill Partners is a Division of Duff & Phelps Securities, LLC. M&A advisory, capital raising and secondary market advisory services in the United Kingdom are provided by Duff & Phelps Securities Ltd. (DPSL), which is authorized and regulated by the Financial Conduct Authority. M&A advisory and capital raising services in Germany are provided by Duff & Phelps GmbH, which is a Tied Agent of DPSL. Valuation Advisory Services in India are provided by Duff & Phelps India Private Limited under a category 1 merchant banker license issued by the Securities and Exchange Board of India.

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