• by Tanya Gazdik , March 15, 2016

As the market turns its attention toward the next generation of vehicle shoppers, Generation Z, it may be operating under some false assumptions, according to Kelley Blue Book and Autotrader, which conducted an in-depth study of future vehicle consumers ages 12-17.

Gen Z differs in some major ways from the often-discussed Millennial generation that precedes it. What’s more, the group is an even bigger economic force quickly approaching. These teens will be in driver seats soon (if they aren’t already), and by 2020, they will translate to a whopping $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, presented the results today to the Automotive Press Association in Detroit.

“What worked for Millennials will not work for Gen Z because this generation is fundamentally different,” Helms tells Marketing Daily. “They are more practical in their choice of vehicle and more budget conscious (a result of having seen their parents go through a major recession).”

Gen Z is also less materialistic than their predecessors, the Millennials.  “As a result, they are drawn to more traditional brands that are trusted and practical,” Helms says. The top three are Chevrolet, Ford and Honda, she adds.

Auto sales are not going to take a hit because of this generation, she says, adding that 92% plan to own a car and 97% plan to obtain their license. Ride share and car share solutions are of interest, but they don’t deliver the same benefits as ownership.

Living in a world shaped by technology and experiencing major events like the Market Crash of 2008, Gen Z offers a different outlook on automotive than their Millennial counterparts, and many of these perspectives contradict popular public opinion.

None of the automakers are currently connecting with this demographic on an emotional level, Helms said.

Automakers who want to appeal to this generation need to highlight the cost savings of green vehicles; that matters more to them than saving the planet, she says. They also should focus on developing and touting safety features — safety is far more important to this generation than its predecessors. 

Gen Z sees great appeal in autonomous vehicles (more so than Xers and Boomers) but is questioning the technology’s ability to deliver, Helms says.  Automakers need to prove the effectiveness of autonomous vehicle technology and demonstrate that these vehicles will make roads safer. 

The 2016 Autotrader and Kelley Blue Book Gen Z Automotive Study was conducted by Ipsos and can be found in its entirety at https://coxautoinc.box.com/autotrader-kbb-gen-z-research. The national survey reveals the responses from more than 3,000 U.S. residents between the ages of 12 and 65 years old.