Anglia UK Anglia UK

Dealing with the generation game

It’s hard not to have a degree of sympathy for the challenges facing the car industry at the moment. Sales down, confidence waning, diesel cars vilified and now, the latest blow in the form of Nissan’s decision to pull production of its X-Trail from Sunderland.

Rather than this being the ultimate doomsday scenario for our four wheeled friends, I believe these are simply further indicators of a significant market restructure – a belief that has just been strengthened with the news that Ikea is to start leasing furniture.

Linking the pioneer of flat pack to the beleaguered car industry may be a bit of a stretch but it is further evidence of a shift in the mindset and buying habits of the next generation. For while we were busy working and saving for a better life, they have well and truly consigned that notion to the history books. Many young people now believe ownership is an outdated concept and that renting is the new reality.

Whether driven by an inability or an unwillingness to save up for more expensive goods, the monthly payment approach pervades almost every aspect of life for millennials and Generation Z - from housing to mobile phones and now even their clothes and furniture.

To bring this back to the automotive industry, ask yourself this question: when was the last time you saw a young person in a car dealership? I’m a fairly regular visitor and I can’t remember the last time I did. And the reasons are simple – cost and lifestyle. Under 25s have grown up in an online environment with the world at their fingertips and an unbelievably powerful search engine to find the best deals available. The thought of physically visiting a local dealership and negotiating with a real person is as alien to them as visiting HMV for a CD.

For a glimpse of the future we only need cast our eye across the Atlantic where a new US concept, Carvana, is tearing up the old car dealership model. Recognising the next generation’s precarious financial position and aversity to hassle, Carvana, is an online only dealership where buyers can browse thousands of vehicles from the comfort of their home.

Carvana uploads a huge array of detailed photos of each car, highlights any defects and offers home delivery or to one of its innovate regional “vending machines.” Not only that but it also promises to beat market prices by up to $2,000 as well as a seven-day money-back guarantee.

And it seems the idea is catching on over here too. Alex Chesterman, the co-founder of Lovefilm and Zoopla has turned his attention to the second-hand car market and has raised more than £30m from backers including the publisher of the Daily Mail for his new venture, Cazoo.

Sounding remarkably similar to Carvana, Cazoo will sell refurbished cars online, deliver them to customers’ homes within 48 hours and offer a seven-day free returns policy.

Retail is evolving at breakneck speed, driven by an ever-increasing desire for value for money and convenience. High street retailers have had to adapt and evolve to meet the demands of this new online world order and now it’s the car market’s turn.