New car sales in some key markets are getting close to - or exceeding - levels not seen since the 2007-2008 economic crisis. But this is mainly driven by an older demographic. To consolidate this growth, automotive manufacturers need to encourage new car purchases amongst a wider age range.
Gen Y buyers are not yet very active in the new car market, but with their interest in all things tech, GfK believes their preferences will be critical for the future the connected car industry.
GfK ran a 6-country study looking at which features of connected cars (such as entertainment, safety, behavioral tracking etc) appeal most to certain age groups.
Across Germany, UK and USA, 46 percent of drivers aged up to 34 find the idea of a fully integrated in-car entertainment system 'very' or 'extremely' appealing. This is more than double that of drivers aged 45 and over, where less than a quarter (20 percent) find this concept 'very' or 'extremely' appealing. The picture is even more positive in the developing car markets of Brazil, Russia and China, with overall appeal standing at over half (55 percent) of those aged up to 34 and a third (33 percent) of those aged 45 and over.
Why should car manufacturers and in-car tech companies focus on Gen Y?
The upper band of Gen Y drivers - those aged 25-34 - are heavier drivers than other age groups. In the developed markets surveyed, they spend an average of 5 hours a week driving, compared to 4.6 hours for those aged 45 and over - and in the developing markets it is 6.1 hours versus 5.6 hours respectively.
Gen Y drivers also aspire to certain feelings when driving, which Connected Cars can readily tap into. In Germany, UK and USA, drivers aged up to 34 are more likely to want to feel "proud" whilst driving (20 percent, compared to 10 percent of those aged 45 and over) and "excited" (13 percent, compared to 7 percent of those aged 45 and over). These aspirations are also seen in Brazil, Russia and China, but more evenly across the age groups: 24 percent of both groups want to feel "proud", and 18 percent of drivers aged up to 34 and 17 percent for those aged 45 and over want to feel "excited".
Finally, three quarters (75 percent) of Gen Y drivers in the developed markets surveyed - and 79 percent in the developing markets - stated that they are likely to be using their own, personal car in five years' time.
Frank Härtl, Global Automotive Lead at GfK, comments: "These factors combine to make Gen Y drivers an attractive audience for Connected Cars - especially as they approach the age at which people tend to become new car buyers. The industry needs to encourage this group by finding ways to let Gen Y drivers experience Connected Cars now - and that means outside of the immediate purchase cycle - so that they discover that these cars deliver the emotions of excitement and pride that they aspire to."
So how can the industry get Gen Y to experience Connected Cars before they are even thinking of a car purchase?
Part of the answer lies in alternative models such as car-sharing services, including pay-as-you-go car rental or hire (such as Zipcar), since GfK's study shows that Gen Y drivers are particularly open to these. Across Germany, UK and USA, over a third (34 percent) of drivers up to 34 years old say they are likely to, or definitely would, consider using a pay-as-you-go service instead of owning a car. This contrasts to just 19 percent of those aged 35 and over. And the appetite is even higher in the developing markets of Brazil, Russia and China. In Brazil, 40 percent of these younger drivers make this statement, while Russia stands at 44 percent and China at 64 percent.
Mr Härtl continues: "By including Connected Cars in the growing car sharing services, the industry can give younger drivers an opportunity to discover this technology and fall in love with the experience it delivers. Current car sharing services require an interaction with technology (website booking, apps for locating/unlocking vehicles) that Gen Y consumers already enjoy - so including Connected Car technology in this experience will be a natural progression for them. And with this 'foot in the door', the industry then has an engaged audience that should drive future demand."
