Key Takeaways from the Gen Z Automotive Preferences Insights Report: Part 1

For almost two decades, China’s domestic passenger car sales volume has continued to rise, and the auto industry has seen rapid development. However, since 2018, the sales volume of the passenger car market has slowed down, and sales have been declining for the past three years. Seeking new areas of growth has become a common concern among automotive manufacturers. Tapping into the growing percentage of Gen Z buyers appears to be where the next opportunity lies.

Recently, Ipsos and B-Insights released the Gen Z Automotive Preferences Insights Report (Z时代汽车观洞察报告) which shares some key trends related to this increasingly important buyer group. In this series of articles, we will share takeaways from the report. This first article will give some background on the growing influence of Gen Z buyers.

83.7% of Gen Z consumers have the desire to own a vehicle

China’s economic growth has positively impacted how Chinese people spend their money. The improvement of economic conditions has made cars more accessible and popular among young people.

In comparison to previous generations, the demand for cars is growing among Gen Z, with research showing that 83.7% of Gen Z consumers have the desire to own a vehicle. In 2020, 39% of new cars were purchased by post-90s consumers, only 2% lower than millennials. It is expected that by 2025, 65% of car sales will come from post-90s and post-00s consumers.

In the fast-paced life of young people. Gen Z consumers see driving as an important skill in their social life.

Showing up in a nice car when meeting friends is the image most Gen Zs are after. Owning a car also means freedom, and that freedom allows Gen Zs to navigate their social life with ease and larger footprint.

Employment is a Major Factor Driving Automotive Sales

Research shows that more than 80% of Chinese Gen Zs started driving early in high school and college. They also chose to buy cars earlier than Gen Y.

Research shows that 67% of Gen Z purchase a vehicle when they get their first job. While many Gen Y consumers also purchased their first car around this time, we can see that many Gen Y waited until marriage or having children to purchase a car, while Gen Z tend to have a car long before that.

It is worth noting that employment appears to be a major driver of passenger car sales and something brands may want to take note of when marketing their vehicles.  

The report found that 63% of Gen Z’s first car purchase budget is 150,000 RMB (a little over 23k USD) or greater. It’s important to note though that, much of the time, they are not purchasing the vehicle on their own. Oftentimes, Chinese parents and grandparents will pitch in to help purchase the car as a reward for landing their first job.

Gen Z Also Have Significant Influence Over Their Family’s Vehicles

The study shows that as they grew up, many Gen Z developed strong preferences for car brands,  models, and features and have strong feelings about what cars both they should get, and even their family should get. The report found that 21% of Gen Zs are able to decide what brand and model their families should purchase and another 44% have a strong say in what their family purchases. This deciding power over not only their own cars, but their family’s cars, makes Gen Zs one of the most important demographics when it comes to purchasing power.

If you enjoyed this article, check back soon for more takeaways from the report!