Over time, your designs become stale to customers. When this happens, your buyer rating will decline, and fewer people will buy your vehicle if there are other options. For vehicles, this design penalty begins when the design is 5 years old and increases every year after that. For components, the effects are smaller, but they will penalize your buyer rating starting at 15 years old.

That is where the New Generation system comes into play. A new generation is a freshly designed vehicle that matches in name and characteristics with a previous design. They are not the same vehicle models, even though they share the same name.

Do not confuse this with a model year, which is the year the company manufactured that vehicle. Companies often produce a generation over multiple years. The game only displays the generation year and not the model year in the name.

For example, if you designed the VENT Model A in 1975, the game will display it as the 1975 VENT Model A. Even if you produce units in 1978, the game will still display them as the 1975 VENT Model A. In the real world, companies would sell those 1975 designs that were built in 1978, as the 1979 VENT Model A.

If you were to produce a new generation of the VENT Model A in 1980, the game will display it as the 1980 VENT Model A. Its parent model will remain the 1975 VENT Model A.

In summation, there is no need to produce a new generation every year.