GM is preparing for the death of car ownership in cities — and its solution is popular among millennials (GM)

• Automakers are preparing for a decline in car sales as millennials elect to live in cities where it's expensive to own a car and easier to use services like Lyft or Uber.
• In 2016, General Motors launched Maven, its car-sharing service, to appeal to millennials' mobility habits.
• Currently, 80% of Maven's users are between the ages of 18 and 34.

General Motors in 2016 launched its car-sharing service with millennials in mind.

Called Maven, the service's focus on millennials is apparent in the nomenclature alone. Julia Steyn, vice president for urban mobility at Maven, said the automaker purposefully selected a name that would distinguish the service from its legacy brand and appeal to younger generations.

"We consciously launched a brand that was not tied to our hardware," Steyn said in an interview. "We wanted to attract the people who normally wouldn't think of an automaker as providing them with a service."

GM also decided against using massive billboards to advertise the service, realizing millennials aren't as responsive to big banner ads, Steyn said.

"The marketing is very digital," she said. "Millennials want word of mouth. They want someone to directly recommend it."

Although the service is still in its early days, GM's efforts have so far led to positive results. Of the 75,858 people using Maven, 80% are between the ages of 18 and 34, Steyn said. The average user is 30-years-old.

Maven is currently available in 17 cities in North America, including New York, Los Angeles, and San Francisco. Users can book a car that's located in a nearby parking garage through the Maven app. 

Prices vary based on the type of vehicle. A New York listing for a 2016 Chevrolet Cruze costs $14 per hour or $120 per day while a listing for a 2017 Cadillac XT5 goes for $20 per hour or $210 per day.

GM, like other major automakers, is preparing for an eventual decline in car ownership. That trend has been fueled by millennials' choice to live in cities where it's expensive to own a car.

Steyn said she doesn't think car ownership will take a hit in American suburbs anytime soon, but that sales are already taking a dive in major cities.

"We clearly see in the urban environment, that sheer problem of how expensive the real-estate is, car ownership is taking a hit," she said.

Ride-hailing services like Uber and Lyft have made car ownership more of a luxury than a necessity in major metropolitan areas. Some experts say these services combined with advents in autonomous tech will replace the personal car altogether.

Maven is meant to appeal to the best of both worlds by getting millennials to use a GM service even if they don't want to purchase a vehicle. Steyn added that the general exposure to the cars could lead to a sale later on.

"There is a high likelihood that if you like the car so much you will want to own one," she said.

Still, Maven faces steep competition in the space from Zipcar, BMW's Reachnow, and Ford's GoDrive.

The death of car ownership may also not be as imminent as some expect. 

A 2016 Strategic Vision Study also found that millennials would rather own a car than rely on ride-hailing services, Bloomberg reported. In 2014, millennials bought more cars than Generation X for the first time.

SEE ALSO: Former Tesla and BMW exec says self-driving cars will start to kill car ownership in just 5 years

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Contributer : Tech Insider http://ift.tt/2voFUbo

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