Automakers push to connect with Gen Y
Los Angeles — New in-vehicle technologies and a new generation of car buyers are driving the automotive industry onto uncharted roads.
That was the resounding conclusion from two separate automotive events Tuesday at the Los Angeles Auto Show, where dozens of industry officials discussed the new technologies and Generation Y.
“These days automakers are going beyond the in-car experience using an array of social and digital marketing tools to connect with customers, especially Gen Y,” said Toyota North America CEO James Lentz during a keynote address Tuesday afternoon during the 2014 Western Automotive Conference, which was themed “Connecting with Gen Y.” The WAC and Connected Car Expo events were hosted by J.D. Power and the National Automobile Dealers Association.
Lentz and others said that demand for connected vehicles, from infotainment systems with WiFi hotspots to new semi-automated technologies, are being driven by Generation Y, also called Millennials.
For years, the auto industry has discussed how to connect with Millennials, a generation of car buyers used to having the world at their fingertips, thanks to the Internet and smartphones.
“They’re different in every way, they’re different in how they consume information,” said John Humphrey, J.D. Power senior vice president of global automotive. “They’re different in how they want to interface with the brand.”
Millennials, a generation of 80 million, make up 40 percent of the U.S. car-buying population today — and this is expected to rise to 50 percent by 2020.
And while some have speculated that Generation Y isn’t interested in driving, officials in Los Angeles said they are just delaying the purchase due to crippling debt and life experiences such as marriage and children.
Toyota’s Lentz said it will be interesting to see how Millennials’ priorities, including the move into urban areas, change as they grow older.
“I think we’re going to see this life-stage change take place,” he said.
Although Millennials are driving the changes, consumers overall are more open to accepting new in-vehicle technologies, including semi-autonomous features such as adaptive cruise control and autonomous parking systems.
Renee Stephens, J.D. Power vice president of U.S. automotive quality, said the company’s 2014 U.S. Automotive Emerging Technologies Study found 24 percent are willing to pay for improved connectivity and increased automation in their vehicle.
Stephens said 41 percent of Millennials are particularly interested in the new technologies. That compares to 25 percent of Generation X and 13 percent of baby boomers.
“As we go forward, it will be a game changer out there. If a vehicle is not connected, people will not consider that vehicle,” said Jason Schultz, Toyota manager of strategic partnerships, Tuesday morning during the Connected Car Expo. “This idea of being disconnected is really difficult.”