Study Indicates Automakers Need To Target Gen Z Buyers Who Desire Practical And Affordable Cars

A study by Kelley Blue Book and Autotrader found that the youngest future car buyers — those through age 17 — still value car ownership.

The companies surveyed more than 1,200 members of generation Z and found they are not as materialistic as the millennials who came before them, but 92 percent own or plan to own a vehicle, and 97 percent have or plan to get a license. That stands in contrast to some beliefs that younger buyers will shun car ownership in favor of ride-sharing services like Uber and Lyft or other forms of transportation.

“Gen Z accounts for nearly a quarter (23 percent) of the population right now, and by 2020 this group will translate to $3.2 trillion in purchasing power, which is larger than the GDP of some small countries,” Isabelle Helms, vice president of research and market intelligence for Cox Automotive, Autotrader and Kelley Blue Book’s parent company, said in a statement. “While they will have access to some serious cash, they will be cautious in how they spend their money, a trait that makes Gen Z markedly different than their millennial counterparts.”

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MDarringer - 3/16/2016 10:32:06 AM

-4 Boost

My sons were all born after Gen Z ended. Does that make them Gen AA?

I like: "Price is more important to generation Z than saving the planet."

"Generation Z isn’t as materialistic as their millennial counterparts." Mental note: not TVR buyers.

Clearly they have astute brains: "Despite growing up with technology, 65 percent of gen Z say “lack of trust in the technology to work” is a barrier, while 41 percent cite concerns that the autonomous cars will not drive as well as people."

TheSteve - 3/16/2016 12:06:54 PM

-2 Boost

One of the reasons why BMW is so successful (as a *luxury* car brand) is they've recognized the uselessness of demographic data. They use psychographics instead.

Psychographics is the study of personality, values, opinions, attitudes, interests, and lifestyles (rather than age, geography, etc). BMW doesn't care if you live on a farm or in the city, if you're 25 of 65, if you're a boomer or Gen-Whatever. All they care about is if you have the kind of mindset (personality, values, opinions, attitudes, interests, and lifestyle) that makes a BMW type of vehicle appealing to you.

BMW is so serious about this that they do research and projections a decade ahead, to try to anticipate what the trends will be then. Did anyone notice how BMW was one of the first luxury brands to offer an SUV? That sounded insane for a sports sedan company. It turned out to be the right (popular and profitable) decision, and hell, they even produce noteworthy luxury sport SUVs!

BTW, I've owned 4 BMWs in my lifetime. I currently drive a Audi, so I'm not a BMW Fanboy. But I do take off my hat respectfully to a company that does something well.

MDarringer - 3/16/2016 12:24:45 PM

-4 Boost

Indeed and the oldest member of Gen Z is 17. When I was 17 I was focused on interested parties to exercise the thing in my pants and making money oh yeah and that thing called high school.

I say that to indicate that the data pool for the research may not accurately reflect how those people are at 30 which I will be this summer.

BMW does do things well and their tie-up with Toyota shows that they see the need to band together with strength to withstand the inevitable market consolidations that will occur.

Mercedes chose poorly with Renault/Nissan.

VW shat its pants.

FCA? Who were they again?

I predict cars like Mustangs and Camaros will still appeal. Crossovers will supplant hatchbacks.

MorePower - 3/18/2016 3:15:10 AM

+1 Boost

The study does not indicate that this group values practical or affordable cars. It only states that these are two attributes that they would consider in the purchase or lease of a car.

ex: If a consumer, of legal age, wants to buy a cheap, imported beer, this does not mean that consumer is looking for Tecate. It only states that price and the location of production are factors. This same consumer may end-up with PBR or something else entirely like a cider that was on sale but has a higher apv.