Baby boomers changed the car industry drastically, heavily favouring the minivan, but now younger generations are doing the same.
Auto makers believe a surge in ownership is coming from the younger demographic groups.
While millennial urbanites and members of the Gen-Y group have been reluctant to dive into the market, several motives will drive demand, said leaders of the Canadian divisions of major automotive companies at the Globe’s auto summit in February.
The motives include the need to stay connected professionally and socially, a desire to align their personal brands with their ride and the simple obligation to haul kids to soccer practice.
At this point of new-car manufacturing, connectivity is assumed. Younger buyers would no more purchase a car lacking Apple CarPlay and Android Auto, than hit a pub without craft beer on the menu. Said GM Canada president Stephen Carlisle: “Apple CarPlay wasn’t in many cars a year ago. If you don’t have it now, you are behind the curve.”
One draw for millennials is the opportunity to match a personal brand with the auto maker’s image, Audi Canada president Daniel Weissland said.
“We can see the trend where people want to own something,” he said. “They want to call it, ‘My own Audi.’ Especially with the premium brands, it’s the aspiration of people, they want to show that they have achieved. The question for us is how to make it accessible for the younger clientele.”
Premium auto makers have introduced entry-level vehicles in the mid-$30,000 price range and most auto makers will certify previously owned cars at attractive mileage levels to induce first-time buyers.
“On the Land Rover side, the demographics of the consumer is the youngest in the luxury segment; not a lot of people know that,” Sam Pirillo, Jaguar Land Rover sales director for Canada said. “With the Jaguar product that is coming [into the marketplace], we expect the same sort of shift, to a younger demographic. We’ve seen it already in the initial studies.”
In their efforts to lure younger buyers, auto makers introduced funky designs, such as the Honda Element and Scion xB, but those are going the way of flip-phones. Millennials and Gen-Ys are more interested in crossovers and SUVs. Auto makers are planning to introduce a fleet of new or remodelled versions of utility vehicles presently on the market – the new Jaguar F-Pace, for one, starts at $49,900.
J.D. Power released a report last month on the buying behaviours of millennials – people born between 1982 and 1994 – which is based on 600,000 survey responses. It concluded that millennials are generally more satisfied consumers than baby boomers, have low tolerance for product errors and delays, demand good customer service, and seek strong value for their money.