Before
technology came into play everyone would get really excited to get their Driver’s
License. However, now a days everyone is more excited to get a new phone or a
new electronic device. The number of young people who drive in this day on age
are very few compared to those years ago. In the article by Rick Newman he
mentions how the decrease in drivers is affecting the automobile companies,
such as GM and Ford. These companies are concerned because the less drivers
there are in the streets the less cars they will sell. Another factor that
plays a role in the sales of cars in the young people groups is that many do
not have money to pay for a car since they have debt and student loans. Even
though their numbers on sales are not completely decreasing because of the
older group still driving, they are making future plans. They are also trying
to adapt to new things such as renting cars rather than selling them.
Newman also
mentions in his article how GM invested in the company Lyft, which is a
transportation method that is cheaper than a taxi and more convenient. Ford is
also investing in the self-drive car since it would be convenient for people
since many do not know how to drive. We also have to keep in mind that many
people live in the city which means that they have different methods of
transportation and do not necessarily have to buy a car. I think it is great
that these two companies are trying to find new ways in which they adapt their
company because if not they would begin to loose profit and eventually have to
shut down.
Here is the link and it has a quick video: http://finance.yahoo.com/news/these-numbers-terrify-gm--ford-and-the-other-automakers-160157091.html#
I think you will continue to see more and more of this shift to rent cars as well as more investment into the self driving cars. Its an interesting point growing options for transportation as well as the increase of young adults going to college has decreased the number of cars sold. I can only see this to continue to increase into the future. Many times when students are finally done with their education many will have student debt and also be living in or close to a big city for their employment. With this being said cities and their surrounding areas are projected to continue to become more and more populated potentially leading towards a decrease in the number of automobiles needed for purchase and more of a temporary car and public transportation business. It will be interesting to see where the automobile industry goes as consumers' needs and preferences continue to change.
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ReplyDeleteIt will be interesting to see whether this decrease in demand for the purchase of cars will lead to a drop in prices. I also wonder how this will affect the car insurance industry. Since less drivers are on the road it seems only logical that insurance companies will be affected in one way or another. In addition, it is interesting to look at the pros and cons of this development. Having less cars on the road can help slow the damage to the environment that is incurred due to their use, and it seems to be bringing about innovation. It is also affecting many industries, though, and may not be beneficial to our economy.
ReplyDeleteIt will be interesting to see whether this decrease in demand for the purchase of cars will lead to a drop in prices. I also wonder how this will affect the car insurance industry. Since less drivers are on the road it seems only logical that insurance companies will be affected in one way or another. In addition, it is interesting to look at the pros and cons of this development. Having less cars on the road can help slow the damage to the environment that is incurred due to their use, and it seems to be bringing about innovation. It is also affecting many industries, though, and may not be beneficial to our economy.
ReplyDeleteOne thing that will be interesting to see is how Uber has been affecting the automobile industry. In most cities, taking an Uber is often cheaper than a taxi due to the medallions that taxis have to own. While cities are trying to fight against Uber to keep the taxi cab companies in business it is very difficult to regulate and it can easily slip under the cracks of regulation. In addition younger generations are moving to the cities and owning a car is not always the best financial option. I would think that services such as Uber are a substitute for owning an automobile.
ReplyDeleteOne thing that will be interesting to see is how Uber has been affecting the automobile industry. In most cities, taking an Uber is often cheaper than a taxi due to the medallions that taxis have to own. While cities are trying to fight against Uber to keep the taxi cab companies in business it is very difficult to regulate and it can easily slip under the cracks of regulation. In addition younger generations are moving to the cities and owning a car is not always the best financial option. I would think that services such as Uber are a substitute for owning an automobile.
ReplyDeleteI think the nature of how disposable goods are today, could present an opportunity for car companies to capitalize on. In other words, they may be able to get consumers to pay for more leasing, renting or other services where a customer gets an immediate service but ultimately is spending more money. So some consumers have a price to pay for the connivence they want. Today, a lot of people will be willing to spend more money if it saves them time, so it might be a trade off between more efficiency for the consumer but higher dollar amount paid for that.
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