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The Intersection
Sunday, February 04, 2024
Industry has opportunity as more of Gen Z matures into vehicle shopping

Cox Automotive's Tracy Fred

As I walked the NADA Show floor this weekend, it didn't escape my notice just how many attendees were baby boomers or Gen Xers.

Don't be alarmed. This isn't going to serve as a bashing of any generation – the differences between them already fuel an excess of clickbait-y headlines, and I don't find sweeping generalizations to be useful.

Here's something more useful, though: This year's show provided evidence that Gen Z, in particular, is starting to capture more of the auto industry's attention.

Yes, some members of Gen Z are still young. 2012 is often considered the cut-off year for their births, making the youngest of them 12 years old in 2024 — too young to drive, let alone purchase a vehicle.

But other members of Gen Z – those born in the late 1990s and early 2000s who are now in or are entering the workforce – have some $473 billion of purchasing power.

That's according to Cox Automotive's Tracy Fred, who spoke with Automotive News and to NADA Show attendees this weekend about Gen Z's evolving vehicle purchase habits. I counted more than 100 people, young and old, at the Dealer Learning Lab where she gave her presentation.

One bit of wisdom: Dealers and automakers should know Gen Z members are not as keen as they might think on buying a vehicle entirely online, Fred said. If that's surprising, this will be, too: Among generation groups, only boomers were more likely to prefer purchasing a vehicle in person than Gen Z, according to a recent study by Cars.com.

I leave Las Vegas curious to see how dealers and automakers will seize on selling to this increasingly coming-of-age generation in 2024.

C.J. Moore, retail reporter

New cars

“The sales trend is slowing down, and it needs to go up to get to 100 percent. There is a lot of ground to cover in just 11 years.”

— BRIAN MAAS, PRESIDENT OF THE CALIFORNIA NEW CAR DEALERS ASSOCIATION, ON THE SECOND CONSECUTIVE QUARTERLY DECLINE IN CALIFORNIA EV SALES

From “EV sales start to fall in California, an industry bellwether”

Automotive News Editors' Picks:

dealers

What are dealers most worried about in 2024? Interest rates, vehicle affordability and the economy are high on the list of concerns expressed by dealer executives in the Automotive News 2024 Dealer Outlook Survey. The looming prospect of a recession is something most executives are worrying about, with 67 percent saying they are either “moderately concerned” or “extremely concerned” about a significant economic downturn hurting their business. Most respondents worry new-car profit margins will fall this year, with some expecting to spend more money on advertising for vehicles and service work. “Even though the demand is there, that doesn’t mean the ability is there,” Ben Keating, president of Keating Auto Group, of Victoria, Texas, told Automotive News. On a more positive note, 31 percent said they expect profit to be better or much better in 2024, and 39 percent expect that service, parts and collision operations will help drive the bottom line. Automotive News breaks down the results.

Affordability

New-car prices, monthly payments fuel vehicle affordability concerns: The economic outlook may be getting brighter for 2024, but a new car is still going to take a big bite out of your wallet. The average monthly payment for a new vehicle was $730 in 2023, and with high interest rates and an average new-vehicle loan amount of just under $41,000, vehicle affordability remains a problem. That’s the takeaway from experts who spoke on an industry pulse panel at the 2024 American Financial Services Association conference on Tuesday. Overall, the economy will not suffer as much as expected in 2024, but it will experience a slowdown, said panelist Tim Gill, the association’s chief economist. That means consumer financial stress likely will worsen as high interest rates and prices continue to hit pocketbooks. Automotive News has more on the outlook for new-car buyers in the year ahead.

Dash cams

What’s this craze for dash cams all about? Maybe you want a dash cam to keep track of your teenager’s driving habits. Or perhaps you want an easy way to record your next scenic drive. Dashboard cameras can do both of those things, but there’s a bigger factor that may be behind the explosion in interest in dash cams — safety. Roughly a third of people who plan to buy a vehicle within the next few years want dash cams in their next car, according to a study by AutoPacific, an automotive marketing research and consulting firm. Dash cams can record accidents, capture road-rage incidents and other perils on the road. “The roads are scary,” says Robby DeGraff, a product and consumer insights analyst at AutoPacific. “I think people are seeing now that a dash cam is a good investment.” Automotive News takes a closer look at the little device that’s making such a big splash.

Akio Toyoda

Akio Toyoda corrects course at Toyota Group amid widening scandal: Akio Toyoda is correcting course at Toyota Group companies in Japan amid a rash of misconduct that has embarrassed the world’s biggest carmaker and eroded public trust at home. The Toyota Motor Corp. chairman summoned the leaders of the 17 group affiliates to a meeting Tuesday in Nagoya and outlined a new Global Vision to refocus their priorities.

GM fire

Fire at GM’s marquee EV plant caused $1M in damage — and put safety officials on edge: A fire that broke out at General Motors’ Factory Zero in December resulted in more than $1 million in damage and has sparked concerns about the protocol for battery fires at the electric vehicle plant — the first of its kind for the automaker and the city of Detroit.

Earnings
Feb. 6: Ford
Feb. 7: Penske
Feb. 8: Asbury
Feb. 13: AutoNation
Feb. 14: Lithia, Sonic Automotive
Feb. 15: Stellantis

Feb. 4 Shift podcast: Panasonic’s Andrew Poliak on automotive’s seismic software push (Episode 236)

The chief technology officer at Panasonic Automotive details advances on software-defined vehicles and what they mean for consumers.

Listen to the Podcast >

Feb. 3 Weekend Drive podcast: NADA Show 2024; Toyota’s EV pace

Automotive News Executive Editor Jamie Butters and Daily Drive co-host Kellen Walker talk from the floor of the NADA Show in Las Vegas about Toyota’s electrification strategy, the growing political polarization around EVs and more.

Listen to the Podcast >

Feb. 1 Daily Drive podcast

Republican political consultant Mike Murphy joins the show to talk about how automakers and retailers can counteract growing polarization over EVs.

Listen to the Podcast >

Jan. 31 Daily Drive podcast

Independent dealer Amanda Gordon talks about what high borrowing costs mean for her and her customers.

Listen to the Podcast >

Feb. 5, 2012: Hyundai says it’s looking at selling the Equus, Genesis sedan and Genesis Coupe under a subbrand called Genesis but has ruled out expensive new rooftops for the brand, according to Dave Zuchowski, executive vice president of sales for Hyundai Motor America. Vehicles in the Genesis subbrand, if approved, would occupy a separate zone in Hyundai showrooms.

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