GM exec: Young people still have passion for cars
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The auto industry can stop wringing its hands over the notion that young people seem to be losing interest in buying cars.
According to General Motors' top economist and others, young people are not drifting away from driving in favor of the Internet and cool gadgets.
Instead, it's their ballooning student loan debt. And the rising cost of insuring young drivers. And difficulty finding a job.
In short, younger buyers are broke.
"I don't see any evidence that the young people are losing interest in cars," says Mustafa Mohatarem, GM's longtime chief economist. "It's really the economics doing what we're seeing, and not a change in preferences."
Economic data suggest that consumers aged 18 to 34 are delaying marriage, having children and even moving out of their parents' home. That's not surprising, given that their net worth as a demographic has declined 44 percent since the recession, while outstanding student loan balances have nearly doubled since 2003.
For those whose livelihoods depend on selling cars, SUVs and pickups, all this is good news over the long term.
You see, debt gets extinguished. The cost of insurance goes down with age. Most people eventually find jobs. These things change, but passion for driving and automobiles? That can't be replaced.
You can reach Larry P. Vellequette at email@example.com.