The future of Automotive Industry at the hand of Generation Z


There are many definitions for Generation Z and the way how to determine their age range. From different articles and blogs to well known sources like Wikipedia - the one that I personally believe is the most complex one at the time of writing this article (December 2020).  Authors classify Z-ers as people born after 1995.

If you are a Millennial or a bit more senior from Generation X then I believe in your personal and your professional life you came across Gen Z and you know what I am trying to describe here - the difference of their behavior, mindset, needs and values are obvious for all of us.

To make it more clear, let's go through their characteristics and then from there figure out how these characteristics, behavior and values would change the automotive industry:

A) Generation Z is more influenced by their own needs rather than the people at the dinner table. This is what I fully agree with and it's been discussed also in McKinsey podcast in 4th of August 2020. This can be translated simply as: the brands that are containing heritage from their successful past are in danger because if a new automaker comes up with a product that is satisfying the needs better, then Generation Z has no problem to follow them and to buy their products.

Also, this means that product managers should be more and more focused on finding out the needs and the importance of them by doing deep researches and the results may and will differ from country to country.

If you agree with the above idea then we can agree that the design of the cars, specifications and the product identity should be more and more customized with the needs of this generation. 

This is possible if we can make a simple platform where customers can add and remove the specifications based on their needs. Citroen Ami is a great example of this 'customization' idea which purchaser can add many items to the car with minimum expense and maximum freedom. Of course Ami is a quadricycle and for cars starting from A class, we need more effort to build up something similar while cost optimizations should be always considered.

As a trend we can say that Modular internal and even external add-ons are the future of products surely.

B) In the same podcast, Bo Finneman says that: "They're looking beyond tangible products and actually trying to understand what is it that makes the company tick. What's its mission? What's its purpose? And what is it actually trying to build for us as a society?"

Based on many researches gen Z's needs are more focused on personalization (being individual) and convenience.

The above items are reflected in many areas and we can go through the most important ones as below:

I) One of the items in convenience for them is availability. It is not only being available on digital platforms but also new ways of retails such as having space in shopping malls for showcasing products. Same as simulations helping them to experience the comfort of driving.

II) The other item will be connectivity but I don't mean connectivity of cars only. That is the default! What I mean is connectivity of services in the car or around the car. In near future we should be able to connect different services to our cars to make them convenient and reliable journey partners. Imagine if you can collect your groceries, parcels, orders, laundries and etc directly into your car while it is parked in your office parking or on the street. 

This makes the life of this generation easier while as we all know they are mobile people and they would like to control everything on their mobile and by their mobile. There are many other solutions for satisfying the need for convenience. As long as cars are a great partners for daily and longer journeys to offer personalized convenience they will be needed by this generation.

C) The difference between millennials and generation Z in defining luxury products is as below:

Most of millennials would like to create a showcase but gen Z is searching for uniqueness. Therefore, I won't be surprised if in future we see less D class SUVs specifically in Europe and more practical cars (smaller & solution providing) that even might be shared with different models of sharing than what we have now. (For example based on shared-time programs).

For generation Z, working in big corporations is not a value anymore. They are focused on creating their own business and make the success by disrupting old models. As a solution for this need, we may have mobility products that are turning to small offices for meetings with soundproof capacity to provide the uniqueness and luxury for this new generation of entrepreneurs.

Simply, as a conclusion, we can say that future trends are surely connected to future needs and preferences and OEMs as other businesses should be careful about these needs. To achieve such a perfect level of understanding - research, market intelligence and R&D departments play a huge role.