Priced Off The Road — Millennials Still Want Cars, They Just Can’t Afford Them

-Analysis-

BUENOS AIRES —The auto industry has never experienced a transformation as significant as the one it is currently undergoing. The shift to electric vehicles, limits on emissions and new safety requirements, the challenge that China represents for traditional manufacturers, and the tariff war — taken together create a brewing time bomb that threatens to wipe out many brands.

Meanwhile, consumers are finding it increasingly difficult to afford a new car, as they are becoming more expensive and more onerous to maintain.

However, in a simultaneous trend, super-luxury and high-performance sports car companies continue to break sales records year after year, creating increasingly exclusive, exotic and expensive options.

This contradiction completely refutes the notion that emerged a few years ago that “young people are not interested in owning a car.” Realistically, it would be more accurate to say that young people can no longer afford to buy a car.

This truth is compounded by the spectacular collapse of almost as many car-sharing companies as were created. Few have survived despite predictions that the future would no longer see cars with individual owners, something that is not happening at the moment.

Car-sharing drop

About 15 years ago, the idea that car-sharing would be the norm in the future began to gain momentum. With marketing arguments like millennials preferring a flexible and environmentally friendly model for mobility, startups all over the world began to pop up offering car-sharing services.

These essentially provide a pay-per-use service: it could be by the minute, hour, day, or week, and with greater flexibility than traditional rental companies. All you had to do was have an app, reserve an available vehicle, and use it.

There were some cases that looked set for success. One of the best known is Autolib’ in France, which began operating in 2011 and grew to have more than 150,000 subscribers and a fleet of 4,000 identical vehicles, all in a matching gray. They were built by the manufacturer Bolloré and were fully electric, with a range of 250 kilometers (155 miles).

It had contracts with several French municipalities, but its headquarters were in the capital, Paris. It had appealing prices compared to public transport, even more so when divided among four, the vehicle’s passenger capacity. They also had government support and a charging network that eventually reached 6,000 recharge points.

So why did it fail? The car-sharing business has proven to require a very large initial investment and the knowledge that you will have to operate at a loss for several years. The business is made more complex by the low profitability it offers. What’s more, the promised hordes of millennials never arrived to take up a car-free lifestyle.

The point is that in 2018, Autolib’ had to close even though it had contracts to provide services until 2023, and thousands of its cars ended up covered in green overgrowth in various vacant lots across France.

What most deters potential new drivers from cars is their price.

Another similar case was Panda Auto in China, which had more than 4 million registered users and nearly 20,000 cars, all of which also ended up as “planters.” This project had state backing in Chongqing province as well as from the manufacturer Lifan.

Other companies that dreamed of global expansion remained operational in only a few cities, such as Car2Go, Zity, and Free2Move. In Argentina, Keko, Kinto Share, and MyKeego continue to provide services.

It’s the prices, stupid

The main argument for the emergence of many car-sharing companies was “the new generations’ lack of interest in cars.” This sounds somewhat flippant and contradictory at a time when Formula 1 viewership is  breaking records because of young consumers.

The reality is that what most deters potential new drivers from cars is their price, which is prohibitive in many parts of the world for those starting their working lives.

Affordable cars have disappeared from most markets. Emissions and safety requirements, high-tech equipment, and electric power have made new models increasingly expensive.

In Argentina, the cheapest car on the market now costs 19,600,000 pesos (about $16,200), while 25 years ago the most affordable model cost around $11,000.

There is a demand for small cars.

In Spain, the average price of the 10 best-selling cars last year was 23,977 euros, whereas in 2014 the average was 14,236 euros. And earlier, at the beginning of this century, there were some on offer for less than 10,000 euros.

Squeezing the middle class

Something similar happened in the United States, where the average market price for new cars was $48,699 in May 2025. In the mid-1990s, that value fluctuated between $15,000 and $20,000, and in 2011 it reached $25,000.

The then CEO of the Renault Group, Luca de Meo, made strong statements regarding the decline in sales in the European market: “This happens when people cannot buy new cars because the purchasing power of the middle class in Europe is falling and people cannot make ends meet. It is a vicious circle.”

He insisted that Renault’s mission was to make cars for ordinary people: “And right now ordinary people can’t buy cars. In Europe, there is a demand for small cars, but with all the existing regulations, they cannot be made profitable. Without a solid middle class, the vehicle industry cannot function. Of course, young people want to drive cars, but they cannot afford them!”