In a consumer market pushed forward by convenience, the way we move from point A to point B is undergoing a remarkable transformation. This has been largely spearheaded by a new generation of cash-rich consumers who have a different idea of what value for money really means.
Traditionally, owning a car symbolised freedom and independence, but for Gen Z consumers, the allure lies in experiences over material possessions. According to GM of Sales and Marketing at subscription-based and Toyota-led Kinto One South Africa, Slade Thompson, this shift in mindset is reshaping the concept of mobility, favouring shared experiences and flexibility over traditional car ownership.
“The economy we all face right now is daunting, especially for those who have only just entered the workforce. Owning a car is not exactly an accessible mobility option, but that’s not going to stop this new generation from getting wheels on the road,” says Thompson.
A notable trend among Gen Z is the growing popularity of services like e-hailing and car subscriptions, which offer an alternative to the burdens of owning a vehicle. According to Deloitte’s 2024 Global Automotive Consumer Study, younger drivers are more inclined towards subscription services, with one in five consumers favouring car subscription models. This interest skyrockets among 18-34-year-olds, with 28% expressing a preference for subscription services over ownership.
What drives this preference for shared mobility? Flexibility and choice are paramount for Gen Z. Thompson says car subscriptions provide the advantages of having a personal vehicle without the hassles of ownership.
“Think of it as Netflix for cars,” surmises Thompson. “Instead of owning, you subscribe to a car service, choosing from a range of vehicles depending on your needs and budget. Monthly fees typically cover insurance, maintenance, and even roadside assistance,”
Whether it’s short-term contracts for work, seasonal needs, or lifestyle preferences, Gen Z seeks mobility solutions that adapt to their dynamic lifestyles. But Thompson says it isn’t just a lifestyle-driven decision – the mania inherent in today’s economic climate plays a critical role in the rise of subscription vehicles.
The Deloitte research highlights that 80% of consumers expect to pay less than £400 (i.e. R 9,461.15) a month for their next used or new vehicle subscription. This aligns with Gen Z’s pragmatic approach to spending, prioritising value and flexibility in their transportation choices.
Another significant aspect is the integration of technology into mobility solutions. Raised in the age of digital, Gen Z consumers value convenience and seamless experiences. Car manufacturers and dealers are adapting by exploring new profit streams, including in-house insurance products and subscription services, signalling a potential disruption to the traditional automotive business model.
However, while Gen Z consumers aspire to adopt innovative mobility solutions, barriers to adoption still exist. This is particularly true with electric vehicles (EVs). Interest in battery electric vehicles is softening due to the high cost of initial models. Despite the environmental benefits and lower fuel costs associated with EVs, affordability and infrastructure remain key obstacles to widespread adoption.
To accelerate the transition to electric mobility, Thompson says targeted initiatives are needed to address affordability and charging infrastructure concerns. “Perhaps they can’t afford to buy, but with a subscription, they can certainly afford to try. That is all that matters to a younger market on the prowl to make a difference.”
Gen Z’s approach to mobility reflects a paradigm shift in transportation preferences. Shared experiences, flexibility, and technological integration are driving forces behind their adoption of alternative mobility solutions.
“As the automotive industry adapts to meet the evolving needs of this tech-savvy generation, there lies an opportunity to innovate and collaborate to shape the future of transportation, and our economy,” Thompson concludes.
