Younger generation choosing IT gadgets over cars

A 30-year-old man who works at a company has no driver's license. He takes a subway to work and or a taxi if needed. "I don't know why I have to get a driver's license and drive a car. If I have money to spend on car maintenance, I would rather use it for my hobby".

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As a big fan of music, he says he spends his extra money mostly to buy IT gadgets such as a headphone, speaker or tablet PC.

The number of young drivers is on the decline. With the spread of smartphones and tablet PCs, the young generation is changing its focus from cars to IT gadgets. Decreased income combined with the lack of job security has also contributed to the fall in the number of young drivers.

○ Younger generation in Korea, US, Japan less interested in cars

The National Police Agency of Korea said Thursday that those aged 25 or younger represented 13.9 percent of newly licensed drivers last year, down from 19.2 percent in 2005. Given that the age group accounted for 7.5 percent of the Korean population last year, up from 6.4 percent in 2005, fewer young people are getting driver¡¯s licenses.

Korea is not alone. The Korea Automobile Research Institute said the share of license holders among those age 16 to 19 in the U.S. is sharply declining. In 1983, 87 percent of 19-year-olds had a driver's license but this fell to 75 percent in 2008. In Japan, 18- and 19-year-old licensed drivers comprised just 33.3 percent of drivers last year, down from 36.5 percent in 2002.

The think tank said, "While car sales are on a steady rise, young people show less interest in driving and cars".

○ The role of smartphones and unemployment

The fall in the number of young drivers is due to the emergence of "more affordable and interesting stuff" than cars. IT gadgets such as smartphones and tablet PCs are much cheaper than cars and provide social networking services, video and music players, Internet surfing and portability

The younger generation has grown up with the Internet and social networking services. "In the past, youths wanted to show themselves with a car and be recognized as an adult. But IT gadgets have replaced cars", said Kwak Tae-yoon, a researcher at the think tank. "This is in line with the survey result that 46 percent of Americans aged 18 to 24 said they prefer a smartphone to a car".

Furthermore, the trend reflects the decline in income of the younger generation due to high unemployment and the rise of contract workers. Seong Yeong-shin, a psychology professor at Korea University and former president of the Korea Society of Consumer Studies, said, "You can buy goods that need long-term expenditures such as a car and a house when predicting income. The prevailing sentiment of the younger generation around the world is anxiety due to unemployment, and even if they are employed, they cannot be optimistic about their income due to uncertainty about the future".

This means that the formula "buying a car after getting a job" no longer applies.

"The desire to express oneself, which the older generation used to fulfill with a car when they were young, is now being met with IT gadgets and luxury watches that are more affordable and make individuals more unique", Seong said.

○ Let young people start a car!

In response, carmakers have begun to take action because this could lead to decreased demand over the long term. Toyota Motor Chairman Akio Toyoda said in an interview with The Dong-A Ilbo at the Tokyo Motor Show on Nov. 30, "We're forced to admit that the younger generation is not as interested as the previous generation was in cars. We'll try to regain their interest again in various ways".

The Japanese carmaker used "Doraemong", a popular Japanese cartoon character, as a model for promotions and will sell "86(Hachiroku)", an affordable version of a sports car, from January next year. Toyota wants to deliver the message that a car and driving are familiar and attractive to the younger generation.

Hyundai Motor has also launched this year "Premium Youth Lap (PYL)", a brand targeting young people and rolled out "Veloster" as the brand's first model with a unique design. The Korean carmaker plans to allocate more budget for PYL marketing next year.

A source from the company said, "Our goal is to touch the soul of the younger generation with PYL marketing, which is different from that of the past".