The Economics of Everyday Things - 46. Car Colors

Episode Date: April 29, 2024

So many vehicles on the road today are white, black, or gray — but automotive designers find that consumer preferences may be changing lanes. Zachary Crockett surveys the lot. SOURCES:Tom Crockett, classic car enthusiast.Mark Gutjahr, global head of design at BASF.Nikkie Riedel, carline planning manager at Subaru of America. RESOURCES:BASF Color Report 2023 for Automotive OEM Coatings."Beige on an S.U.V. Will Cost You, but for Pickups It’s Golden," by Roy Furchgott (The New York Times, 2021)."A Brief History Of Car Colors — And Why Are We So Boring Now?" (Consumer Reports, 2018)."The Link Between the Colour of Cars and the Economy," (The Economist, 2018). EXTRA:"Car Washes," by The Economics of Everyday Things (2023).

Like a lot of men his age, my dad likes to talk about how everything used to be better. Shoes used to last longer, musicians used to be more talented, movies used to cost a couple bucks, and cars, they just had a lot more character. My first car was a 1965 Chevy Impala. And this was a real car. It was a real car I bought from a neighbor. It had 25,000 miles on it, and I paid $400 for it. I mean, the personality that it had. Every detail about it, the headlights, the tail lights,

the fender, the bumper, the doors, you could punch the 65 Chevy and you'd break your hand. As Tom Crockett tells it, a big part of that character was the multitude of colors that you'd see on the road back in the 1960s and 70s. In the old days, we had variations of green and variations of brown, tan colors. There were light blues, lots of different shades of blues. My uncle Guy had like a canary yellow Cadillac. He'd drive it with a top down. But these days, he says, it seems like all the cars on the road look the same.

Black, white, silver, black, white, silver, black, white. There is some truth to that. Today's cars are a lot less colorful than they used to be. 80% of vehicles sold in North America are now achromatic, white, black, gray, or silver. That's up from 36% 50 years ago. Now, if you're like my dad, you might say that the automobile industry has lost its flair. But according to car color designers, there are actually more color options than ever before. It's just that those so-called boring tones are what today's young buyers

actually want. We know that Boomers and Gen X are definitely looking for some of those pops of color, so they're more interested in like the tangerine orange. And we found that millennials are gravitating to gray. We all know about millennial gray, and that's kind of how it's showing up for our cars. For the Freakonomics Radio Network, this is the economics of everyday things. I'm Zachary Krakat. Today, car colors. For the earliest mass-produced cars, paint was more of a practicality than a form of expression.

Throughout most of the 1920s, Henry Ford's famous Model T only came in one color. Ford was rumored to have said that a customer may have a car in any color he desires, so long as it is black. Ford's affinity for the color was rooted in economics. Black paint was cheap and durable, and using only one color sped up production. As cars became more common, consumers wanted theirs to stand out.

Automakers responded with different color options. In the 1930s, the first metallic finishes hit the market. They were made out of fish scales, and it took 20,000 herring to make a pound of paint. In the 1950s, you could find cars in pink and turquoise. The 60s and 70s were populated with yellow and green muscle cars. And by the 1980s, vehicles came in just about any color you could dream up.

The 80s was a very colorful decade and the years before. So there was a lot of green cars, red cars, blue cars. That's Mark Gutjar. He's the global head of design at BASF, one of the largest car paint manufacturers in the world. And achromatics, the colors that are black, gray and white and silver, they were not so dominant actually. But Guchar says that around the beginning of the millennium, car colors became a lot less colorful. Silver quickly became the color of choice, largely thanks to emerging technologies. You know, mobile phones were silver.

Your stereo was silver with a lot of buttons and things to turn, like very technical devices. And then this famous American company came in and invented a tool and the product was white. That famous company was Apple. And the device, of course, was the iPod. It came out in 2001, around the same time the company opened its first retail locations. White was the transporting color of being advanced, high-tech, forward-thinking.

The color took over in rapid speed. And it's still number one globally. Today, 34% of all cars in North America are white. After that comes black with 22%, silver with 14%, and gray with 10%. No other color cracks double digits. Now, there are practical reasons to buy a white car. Lighter colors reflect more sunlight, which reduces the need for AC, increasing fuel economy and decreasing

carbon dioxide emissions. But the main reason people buy achromatic cars is that they're just sort of inoffensive. We did some research on, you know, new car buyers, like what they were looking for, and what people like personally as a color actually has nothing to do with what they buy. There are a few possible explanations for this. For starters, cars are often shared within a family, and achromatic colors make good compromise picks. Dealerships also tend to stock more white, black, and gray cars because they're easier

to sell than a niche choice like turquoise. If a customer comes in looking for a color that's not in stock, a salesperson can often convince them to buy the gray model on the floor instead. Gray colors please a lot of people. That's why they're so successful. We have around 120 different shades of grey. So 50 shades is not enough. Whether you have a grey car or a pink car, it's likely that BASF was involved in the color.

More than 50% of all cars produced globally each year have at least one layer of BASF paint. We work with nearly everybody in the industry to develop colors every year. I think it's roughly 900 colors that are currently running in the market. Every major car manufacturer also has its own in-house design team. And when a brand wants to develop a new color,

the conversation usually starts with someone like Nikki Rydell. I'm a car line planning manager at Subaru of America. Rydell's job is to help oversee all of the little design choices that go into creating a new Subaru model, from the color of the stitching on the seats to the color of the exterior paint. The first thing Subaru's team does is look at what's popular in the spaces where their customers are interacting.

We're really lucky at Subaru because we know our customer really well. Definitely people who want to take the path less followed, they're always looking for their next adventure. So we're looking at snowboards, we're looking at skis, we're looking at skate decks, we're looking at all of the clothing, like ski jackets and that sort of thing. A few years ago, they noticed a trend. We started seeing everything kind of shifting toward

cooler tones, and so we developed cool gray khaki. Over the past couple of years, you've probably noticed cars in this color. It's a light gray with a bluish tone, and it's got kind of a ceramic look to it, no sparkle. Cool Gray Khaki is Subaru's invention. But many manufacturers, from BMW to Honda, have introduced very similar shades. Cool Grey Khaki is a cooler, muted tone. It has a very flat finish, so it doesn't have a lot of metallic or pearl in it, which also suggests a rugged aesthetic and a more modern, younger look. When we all saw it, we just kind of knew it was a hit.

Before a color like Cool Grey Khaki is finalized, it's tested in a light studio that simulates different settings. Light is really important, especially when you're talking about a vehicle. The sunlight that you see from a temperature standpoint in Southern California is going to be very different from Maine. The other consideration is that these cars will be seen in showrooms. So one of the settings that we have that we check are what our retailers are using for overhead lighting in the showroom.

Make sure that that also looks as good as we want it to. They also have to make sure the paint formula can hold up in different environments. Many car manufacturers send painted car parts to weathering facilities in Florida, where they're put out in the sun, sometimes for years to see how the paint is affected. The state has high intensity sunlight, lots of rain and high humidity,

which makes it an ideal place to test for cracking, peeling, and moisture sensitivity. Once a color has passed all the tests, manufacturers work with paint suppliers like BASF to produce the color at scale. So what they get from us is like a mixed material with all the ingredients that are in. Even a seemingly plain color like white or gray is a lot more dimensional than it seems. When a car is painted at a factory, the process begins with something called an E-coat. The car parts are often dipped in a bath of zinc phosphate, and an electrical current binds a layer of resin to the surface.

The parts spend time in an oven, and then robots spray them with primer and a base coat that includes all kinds of effects. So you have these glitter sparkles that you can put in, like, you know, very different textures, very soft, silky textures you can generate. The final step is typically a clear coat that gives an extra glossiness to the finish, but also protects the paint from UV light and burp poop. All the layers together, they make a thickness of a hair, so it's extremely thin and it's extremely technical.

From conception to production, bringing a new color like Cool Gray Khaki to the market can take up to six years. So in 2024, Subaru's team might be working on the new colors for the 2030 lineup. And even after all that work, Rydell says that there are still slight variations in the final product of any given color. Every time you formulate the color, it's not going to be 100% exact. They're virtually imperceivable, but if you put one body panel next to another,

there's a chance that you could see the difference. So the way that they're spraying our white in Japan could look slightly different from what we're spraying in the US factory. So will every hit color be another variant of gray? Probably not. Some industry experts are predicting a more vibrant future. That's coming up.

Subaru debuted Cool Gray Khaki in 2018 and phased it out in 2023. It accounted for around 18% of the company's sales for the models that were available in the color. If you go to Subaru forums, you'll find customers singing its praises. But the company doesn't just stick to grays. Nikki Rydell says Subaru fans are a little more open to bold colors than the typical car buyer. We're able to sell bright blues and greens and orange colors. We're lucky because we have always been kind of that quirky, fun car, so we kind of lean into that and make sure that we're offering really fun colors as much as we can. Take, for instance, a color called geyser blue,

which debuted on some of Subaru's 2022 models. We took blue and mixed a little bit of green into it. called Geyser Blue, which debuted on some of Subaru's 2022 models. We took blue and mixed a little bit of green into it. Green is not usually a great seller for cars, but Subaru does it really well. And then we took all of the metallic flake out. So that kind of psychologically signifies that it's more of a rugged off-road color. It's beating out black, white, gray, and that's pretty tough to do, yeah. Cars are an expensive product, and color has a big impact on sales. So, car companies like Subaru have to make sure they produce the right amount of models

in each color. So we don't want to have too many colors in the lineup because then we're splitting the ratio of cars out and then every retailer might not be able to get that color. We have to make sure that we've got just enough choice so that our owners can kind of pick what they want and personalize their car, but not so many options that we can't get the car to the right place to the right customer.

Subaru keeps a close eye on data from dealerships. They look at things like how quickly certain colors are selling. If they see demand for particular shades slowing down, they adjust accordingly on the factory lines. And dealerships tend to keep reliable colors like white, gray, and black on hand. It's a lot easier to convince somebody to buy a white car than it is a bright orange car. Some colors tend to sell better in certain regions. The Sun Belt area, so the southern part of the country, is going to sell more white cars

than they would black cars just because of the heat. So we would probably allocate maybe more white cars down there. Rydell says there are also some generational differences in who buys certain car colors. We know that Boomers and Gen X are definitely looking for some of those pops of color. So they're more interested in the tangerine orange, the bright oranges. And we found that millennials are gravitating to colors that are closer to like the cool gray khaki. They're always attracted to more muted colors compared to other generations. But even millennials are starting to come around to more colorful cars. I think we've maybe bottomed out on minimalism. And I think people are starting to look for

character now and personalization. Some research has suggested that there's a correlation between car colors and how the economy is doing. Sombra tones like gray and black rise during times of hardship. And when things are looking up, brighter colors tend to reemerge. At BASF, Marc Guchar has noticed a slight shift away from the dominant achromatic colors. What we see is a huge diversity in colors. So there's more and more color shades coming in. The last year's production showed in every region of the world, purple, violet colors.

And that was something really not there for a long, long time. Nearly every car brand on the market has experimented with an adventurous color or two in recent years. Fiat Chrysler offered the Jeep Wrangler in Snazberry, kind of a reddish maroon. Toyota released a 4Runner in an extremely vivid Voodoo blue. BMW had Sao Paulo yellow, which looks like a highlighter.

Colors like this will sometimes set you back a few more bucks at the dealership. There are different pigments, and pigments vary in cost. There's also the application process. If it's a single coat, dual coat, or a tri coat, there's all different effects. So we call a metallic, a pearl, or a silica finish. Every time you add another layer of paint, you're adding time to the line. These bolder colors may cost more, but they could also pay you back in the long run. The vehicle search engine IC Cars analyzed pricing data on more than a million used cars and

found that color has a surprisingly strong impact on resale value. The colors that retain the most value? Yellow, orange, and green. But at least for now, most car buyers still spring for the less exhilarating cues. And a few years ago, when he found himself in the market for a new car, even my dad, Tom Crockett, joined the club. I bought a used 2014 Subaru Impreza. What color did you get?

I bought a white car because it was the only used car on the lot. Believe it or not, I actually like the color white. The only problem is, you know, now when I go out and look for my car, I have to sort through multiple white cars to make sure that I'm getting in the right car. For the economics of everyday things, I'm Zachary Crockett. This episode was produced by me and Sarah Lilly and mixed by Jeremy Johnston. We had help from Daniel Moritz-Rapson. In those days, you didn't wear seat belts, and so I would pile 10, 12 hippies in the

car. And, yeah, but that's another story for another time.