July 31, 2018 06:01 CET
TRAVERSE CITY, Michigan — The auto industry is adjusting to a new customer who is expected to change how vehicles are designed, marketed and sold.
For automakers, millennials are a “market pressure that is creating the need to change,” Pom Malhotra, director of connected vehicles and data at Audi of America, said Monday at the CAR Management Briefing Seminars.
Millennials account for about 15 percent of Audi’s target customers. But by 2025, that demographic is expected to account for three-fourths of the luxury automaker’s customer base.
Millennials accounted for all new-vehicle sales growth in the North American auto industry during the first quarter of 2018, according to consumer credit reporting agency Experian. Millennial vehicle market share ticked up to 29.7 percent in the first quarter from 27.9 percent in the first quarter of 2017. In contrast, Generation X, made up of consumers roughly ages 38 to 53, was flat at 27.2 percent.
Millennials are fueling the adoption of in-vehicle technology.
“The access to information that they have in the rest of their life needs to be there in the car as well,” Malhotra said.
Automakers are taking note.
Audi is targeting younger buyers with its A3 and Q3. “The vehicles typically come equipped with some of the latest and greatest technologies that we offer,” Malhotra said.
Mercedes-Benz, meanwhile, is targeting millennials with its newest U.S. product — the A-class sedan — with a sticker price in the low $30,000s.
Millennials have grown up with technology and are more trusting of it, Malhotra said.
“This is a group that has learned the comfort and conveniences that come with good technological solutions,” he said. “If something can be done much more easily, and much more comfortably through technology, then why not do it?”
The way cars are sold to this demographic will also need tweaking.
“We have to create an experience that is comfortable and convenient, a lot more mobile,” Malhotra said. “Our dealership experience needs to change in a big way, a lot more utilization of software tools.” a
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