New York Auto Show: (Young) Drivers Wanted
Audi, Mercedes and even Rolls-Royce woo the elusive young luxury buyer with style, price and especially new tech features. "Connectivity is the No. 1 reason they purchase a car," Audi of America CEO Scott Keogh tells THR.
NEW YORK -- A leitmotif of the 2014 International Auto Show among luxury car brands is the necessity of addressing the expectations of Generations X and Y, whose criteria for buying a car -- or buying a car at all -- differ radically from those of their baby boomer parents.
Millennials' relative indifference to cars in general and the car-buying process in particular is of great concern to luxury car makers, whose brands traditionally relied on creating an aura of exclusivity through intangibles but must now increasingly cater to buyers who like their luxury hard-wired with practicalities.
Accustomed to processing tremendous amounts of information and customizing their lives like giant Spotify playlists, millennials find the traditional car-buying experience -- with its opaque pricing and baroque theater of haggling -- incomprehensible and alienating.
At a panel on Monday's Automotive Forum at the Jacob Javitz Center, video interviews with young car buyers made it clear that they expect to engage with car dealers the way they do with each other: by text, email and social media. And they expect the cars they drive to mesh seamlessly with their personal tech.
Based on the casual evidence at the New York Auto Show this week, carmakers are learning to finesse these demands and are beginning to have some measurable success addressing the audience.
Rolls-Royce said that its newer models, such as the recently updated Ghost II and the Wraith, a $284,000 coupe introduced last year that has become the trophy car for Silicon Valley entrepreneurs in their '40s instead of '60s, are helping bring the brand to a younger North American audience.
Mercedes Benz, the No. 1 luxury brand in the U.S., has been particularly aggressive about testing the lower reaches of the luxury segment with the CLA, a $30,000 sedan introduced last year that became a runaway success and brought new, younger buyers to the brand. "With the CLA, eight in 10 buyers are new to Mercedes Benz," Steve Cannon, CEO of Mercedes Benz USA, said during the show. The strategy behind the car, with its category-testing low price, is to recruit young buyers "into the brand young and keep them for life," Cannon added.
Audi's new 2015 A3, priced at $30,000, is also expected to appeal to the demographic addressed by the CLA. But unlike Mercedes, Audi isn't actively trolling for younger buyers, according to Scott Keogh, Audi USA's president. "Audi already has the younger buyer and the most affluent buyer, so I don't feel we have to do this whole reinvention thing," Keogh tells The Hollywood Reporter at the show. "Our brand already attracts young and progressive buyers."
One of the A3's selling points for younger buyers is that it is prewired with an AT&T 4G LTE connection, which turns the car into a mobile wifi hot spot capable of streaming multiple channels of video and thousands of Internet songs.
"Generally, the No. 1 reason buyers purchase an Audi is style, and No. 2 is performance," Keogh says. "But if you look at the Gen Y and Gen X demographics, connectivity is the No. 1 reason they purchase that car -- which is why we're the only brand with 4G LTE, and why we integrated Google maps. The other thing that is crucial that goes unsaid is how you are executing these things. This demographic likes things that are properly thought out and executed. It's not a mishmash of nonsense that you glued into the car."