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‘Generation N’ is Steering Clear of Auto Showrooms

Steve Cole | The Agency Collection | Getty Images

A new study by the consulting firm AlixPartners is raising a point that may seem hard for many Americans to accept.

Millennials, and other young people have become so neutral about driving, they are a factor behind auto sales not growing at a faster pace.

In fact, AlixPartners estimates there are 5 million fewer car buyers today than five years ago. Not all of that is because of younger people putting off buying a car, but they do play a role according to the study.

AlixPartners calls this “Generation N” – as in neutral about driving.

This is not the first time we’ve heard reports of “Generation N” showing less interest in owning cars. Heck, it’s the reason car sharing companies like Zipcar expect to see membership and revenue grow at a steady pace for the foreseeable future. The driving force behind this is unclear and begs the question - how much of that is disinterest in driving and how much of that is Generation N saying that it doesn’t make sense to take on a car loan, insurance and the daily costs of driving?

The answer is that both reasons play a role in many younger people saying no to buying a car.

Last year, I attended a panel looking at research into what millennials (Generation N) want in a car. I sat next to Mark Fields, Ford’s president of the Americas, who is trying to figure out how to bring more young buyers into Ford showrooms. The researchers (graduate school students from business schools around the country) repeatedly said that young adults are more interested in staying connected via their smart phones or computers than they are in buying a new car. But when asked if they could buy a car, what would it be, they routinely picked a luxury brand. For Fields and the folks at Ford it is a puzzle they are struggling to solve.

When I shared these results with friends who are not in the auto industry almost everyone said the same thing: “These kids will eventually grow up and realize they need a car”

Maybe.

Until that happens, automakers are wondering how to convince younger people they should buy a new car.

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___________________________ Questions? Comments? BehindTheWheel@cnbc.comand Follow me on Twitter @LeBeauCarNews

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