Auto manufacturers today are scratching their heads, trying to figure out why the millennial generation has little-to-no interest in owning a car. What car makers are failing to see is that this generation’s interests and priorities have been redefined in the last two decades, pushing cars to the side while must-have personal technology products take up the fast lane.

It’s no secret the percentage of new vehicles sold to 18- to 34-year-olds has significantly dropped over the past few years. Many argue this is the result of a weak economy, that the idea of making a large car investment and getting into more debt on top of college loans is too daunting for them. But that’s not the “driving” factor, especially considering that owning a smartphone or other mobile device, with its monthly fees of network access, data plan, insurance, and app services, is almost comparable to the monthly payments required when leasing a Honda Civic.

It used to be that having your own car provided the ultimate sense of freedom for young adults.

What auto manufacturers, along with much of corporate America are missing here is that the vehicles to freedom and personal identity have changed for this generation. The sooner brands get a grip on this reality the sooner they can make adjustments in how they market to and communicate with this core group, which is essential to their long-term success.

It used to be that having your own car provided the ultimate sense of freedom for young adults, allowing them a means to get together with friends, establish independence and separate from their parents. It was a critical right of passage to real adulthood to drive your own car, and it was the one place you could blast music without your parents complaining. Popular movies of the later Baby Boomer’s and Gen X’s coming of age, such as Risky Business and Dazed and Confused shaped this generation’s sense of self, portraying images of fancy sports cars as the ultimate young adult possession.

Today however, older teens and young adults don’t need cars to achieve a sense of self and freedom. This generation’s coming of age consisted of graduating from the Internet and CD-ROM computer games to hand-held mobile devices where they’re establishing identities, relationships, and individualism online all day long–as much as, if not more than, in the real world.

With recent studies showing a huge decline in auto sales among the millennial marketplace, it’s no wonder auto manufacturers are in a mild state of panic, realizing they’re missing out on a generation that wields $200 billion in purchasing power. Numbers don’t lie, and over the last few years statistics have shown a significant drop in young people who own cars, as well as those with driver’s licenses–and that decline continues among the youngest millennials, meaning this is not a trend that’s going away anytime soon. From 2007 to 2011, the number of cars purchased by people aged 18 to 34, fell almost 30%, and according to a study from the AAA Foundation for Traffic Safety, only 44% of teens obtain a driver’s license within the first year of becoming eligible and just half, 54% are licensed before turning 18. This is a major break with the past, considering how most teens of the two previous generations would race to the DMV for their license or permit on the day of their 16th birthday.

The number of cars purchased by people aged 18 to 34 fell almost 30%.

Unlike the Baby Boomers, who gained their independence and individuality from movies, music, cars, and motorcycles, older teens and young adults today are expressing their freedom through social channels–these are their new wheels and they get the keys now starting at about age 9. Marketing to this group demands a different mindset that involves taking the time to understand the neo-millennials.