This Week in Car Buying: Shocker! Gen Z wants cars; Yet students don’t understand credit; Mazda CX-9 Priced; Inventories large, yet stable
Having delayed getting their licenses, Millennials have worried car makers who believe the conventional wisdom that they and the Gen Z teens behind them are more interested in smartphones, mass transit and ride sharing than owning automobiles. However, a Kelley Blue Book study reveals that 92 percent of Gen Z teens own or plan to own a vehicle.
“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,” said Isabelle Helms, vice president of research and market intelligence for Cox Automotive, parent of Kelley Blue Book and Autotrader. “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.”
In addition to 92 percent owning or wanting to own a car, 97 percent of Gen Z survey participants said they have or plan to get a license. More important for car makers is the fact that these young consumers are willing to give up social media (72 percent) or new clothes (63 percent) for car ownership. But it’s not that they are particularly style or brand conscious, rather they tend to focus in on value, safety and fuel economy. Among the top makes cited in the survey were Ford, Chevrolet and Honda as preferred brands. Only 1 percent cited Tesla as a top preferred brand.
In addition to being more practical towards the types of vehicles they buy, Gen Z also seems to be a bit more traditional when it comes to shopping, preferring face-to-face interactions when looking for a car. A total of 68 percent agree that in-person shopping is important, with 52 percent saying that would want to test drive the vehicle for making a purchase.
“What worked for marketing to Millennials will not work for Generation Z because some of the defining traits of Millennials do not hold true for the next generation of car shoppers,” said Helms. “The best news from this research is that auto sales are not going to take a hit because of this generation. In fact, it may prove to be quite the opposite. Their love for cars and driving is very much alive.”
Students don’t know much about credit
A survey by a website specializing in helping students manage their debt reveals that most college-age respondents know little or nothing about consumer credit, according to Nate Matherson, co-founder and CEO of LendEDU.com. In a poll of 668 current college students, Matherson said “unfortunately, we found that the majority…know very little about building and maintaining consumer credit. In fact, 59.3 percent can’t even produce a broad definition of a credit score.”
In addition, more than 95 the respondents couldn’t identify the range of possible FICO credit scores, which are used to determine credit worthiness.
While LendEDU is concerned with college loan debt, this lack of knowledge on the part of students indicates a need for educating graduates on how to manage credit not just on their outstanding loans, but also if they intend to borrow for a car or any other major household purchase. While having a credit card is vital to establishing a credit track record, less than 35 percent of the students surveyed had one and more than 72 percent of those with a card did not know their credit score.
2016 Mazda CX-9 pricing announced
Set to go on sale later this spring, the 2016 Mazda CX-9 crossover SUV has been priced, with an MSRP of $31,520 on the entry level Sport model. The other three time levels are the CX-9 Touring, which begins at $35,970; the CX-9 Grand Touring at $40,170, and the line topping CX-9 Signature with standard all-wheel drive at $44,015. On Sport, Touring and Grand Touring, all-wheel drive is an $1,800 option. All prices do not include $900 delivery.
The 3-row 2016 Mazda CX-9 is equipped with a 2.5-liter turbocharged 4-cylinder gasoline engine producing 250 horsepower on premium fuel and 310 lb-ft of torque. The Sport model features LED headlights and taillights, 18-inch wheels, backup camera and a Mazda Connect infotainment system with a 7-inch screen. The $950 Sport package adds a power driver’s seat, heated front buckets and heated door mirrors. The Touring model features blind-spot monitoring with a rear cross-traffic alert, HomeLink garage door opener, keyless entry, power liftgate, power front seats and an 8-inch center screen. A $1,745 Touring Premium package adds automatic headlamps, LED fog lights, back-up sensors, power sunroof and a 12-speaker Bose audio system.
At the upper end, the CX-9 Grand Touring model sports 20-inch wheels, adaptive front lighting, head-up display with navigation, lane-departure warning, lane-keep assist and radar cruise control. The Signature, in addition to making all-wheel drive standard, boasts leather upholstery, rosewood accents and interior LED lighting.
Inventories large, yet stable
According to Automotive News, the number of vehicles in inventory, some 3.8 million units, is the highest it’s been since 2006, before the economic downturn that saw a 40-percent drop in sales. While the number is high, at current selling rates, the 68 days’ supply is only one day greater than a year ago and 9 days less than February 1. The larger number of vehicles on the ground is typical this time of year as dealers stock up for the spring selling season.
Brands in shortest supply continue to be Subaru, at 25 days followed by Mercedes-Benz at 46 and Toyota and Land Rover, both at 48. Kia rounds out the top 5 with a 52 days’ supply. Fiat continues to have them most cars on hand at 165 days’ supply, followed by Chrysler at 102. Mini and Lincoln are close behind at 101 days’ supply.
Volvo is planning to reintroduce its 40 Series vehicles in the form of a S40 sedan, V40 wagon and XC40 crossover SUV. The expanded lineup is expected to return before the end of the decade.
Honda’s NSX supercar has returned and this time it’s built in America. Our 2017 Acura NSX First Review puts you in the driver’s seat of this stunning sports car.
New black chrome packages add a touch of elegance to the 2016 Cadillac ATS and CTS for less than a grand on the former and slightly more than that on the latter.
The New York Auto Show kicks off this week. You can see our coverage here.