Millennials may not want to driver, but the next generation up, Gen Z, is more than ready to get behind the wheel.
It’s become conventional wisdom that Millennials would rather take a bus or simply connect by smartphone or computer rather than drive. But what about the generation that follows?
If a new study is any indication, Generation Z may be nearly as excited about driving as their car-crazy Baby Boomer grandparents.
“Their love for cars and driving is very much alive,” said Isabelle Helms, vice president of research for websites Autotrader and Kelley Blue Book. “Auto sales are not going to take a hit because of this generation.”
That’s good news for the auto industry. Millennials have been unexpectedly reluctant to buy cars. In fact, they’re far less likely to even get a driver’s license than previous generations. Prior studies show they’re far more interested in mass transit and comfortable with staying at home, relying on smartphones and other technology to stay in touch with friends.
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It’s still a bit too early to tell exactly what will happen with Generation Z. By definition, they’re 17 or younger, so only a small number of them are old enough to drive by now. But the study found 92% of them intend to get a car of their own, and 97% at least want to have a license.
And nearly three-quarters of them – about 72% – said they’d happily unplug from social media, turn off their cellphones, even skip buying the latest fashions if that’s what it would take to get a car.
Asked why, they cited the same sort of reasons once heard from Boomers: freedom, a sense of responsibility and the pure joy of getting behind the wheel.
That said, the findings in the study suggest that Gen-Z isn’t a clone of the Boomer generation, or Generations X or Y, for that matter. They are far less materialistic. But they’re also less focused on the environment and far more focused on price. In fact, when asked about the advantages of an environmentally friendly vehicle, more than 40% of the Gen-Z respondents listed spending less on gas, while only 30% mentioned reducing global warming.
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More appealing are the autonomous vehicles set to hit the streets over the next decade. More than half of this young generation find the concept appealing, but at the same time, nearly two-thirds say they have a “lack of trust in the technology to work.” If it does, Gen-Z expects self-driving cars will eventually yield significant improvements in highway safety. And safety is one of their biggest concerns, according to the new study.
The auto industry is bracing for a shockwave as Millennials age and become the largest generation of consumers in American history. But Helms says automotive planners should already be preparing for what it takes to market to the potential buyers who will follow.
“Gen Z accounts for nearly a quarter – 23% – 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,” said Helms.
The study, which queried 3,000 Americans between the ages of 12 to 65, comes in contrast to other recent research. An internal Ford study, for example, warned that declining interest in auto ownership won’t reverse after the Millennials. That’s one reason the Detroit maker last week announced the creation of its new Ford Mobility Services unit. The subsidiary will focus on alternatives, including car- and ride-sharing.
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General Motors is taking a similar approach. It has launched the Maven car-sharing service and earlier this year invested $500 million in the second-largest ride-sharing company, Lyft. This week, meanwhile, it launched a new program, called Express Drive, to let Lyft buyers lease a GM vehicle for as little as $99 a week.