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To Attract Younger Consumers, Automakers Must First Connect

To Attract Younger Consumers, Automakers Must First Connect

By Jeff Youngs, March 05, 2012
Our entire society is adjusting to Millennials' (aka Generation Y) fierce devotion to staying electronically connected. And as a result, automakers are focused on creating a role for their vehicles that will accommodate the generation's priority-and certainly not thwart it.

"They're connected before they get in their car, and when they get in their car, they're worried that all of that has to be put on hold until they get where they're going and they can get reconnected," said Sage Marie, American Honda's manager of product planning. "So it's incumbent upon us to make sure the car integrates seamlessly with their lives so their lives don't get put on hold when they get into the car."

Or as Larry Dominique, Nissan's former vice president of advanced product planning and strategy in the United States, put it: "As smartphones get smarter and people's lives all end up on these tiny devices, they're wanting to just hop into the car with this phone and have it communicate with everything."

"The key for automakers and suppliers regarding hands-free technology, as with most technologies, is to integrate it into the vehicle in a way that is easy to understand and operate, yet sophisticated enough to handle all of the tasks that drivers expect," said Mike VanNieuwkuyk executive director of global vehicle research at J.D. Power and Associates. "The engineering is extremely complex, but the driver interface has to be simple."
Richard Wallace said that "what they're looking for is different."

The director of transportation systems analysis for the Center for Automotive Research explained that boomers "may have haggled over the engine. But [Millennials] are more interested in, 'Can I link this to the Internet, and use this kind of screen, and bring my music in and have it play through the system?"

In fact, Gen Y consumers are willing to spend more than $3,000 for hardware that delivers connectivity in the car, said Joe Vitale, global automotive sector leader for Deloitte Touche Tohmatsu Ltd., a consulting firm. In a survey, 59 percent of Millennials ranked in-dash technology as the most important part of a vehicle's interior, and almost 75 percent of respondents sought touch-screen interfaces.

The priority placed by Millennials on infotainment already has sent automakers scrambling to please them over the last several years.

Take Ford, for example. The company introduced Sync a few years ago, along with Microsoft, because they designed the feature as a flexible interface to support whatever mobile devices are brought into the car-rather than as an attempt to impose a hard-wired platform on the driver.

According to Ford, consumer "take" rates for Sync are as high as 80 percent, even in small models such as the Ford Focus  and Ford Fusion , whose price points reflect their status as somewhat basic transportation. And Ford's biggest gain in market share over the last few years has been among Millennials, said George Pipas, the company's former head of U.S. industry analysis.
Other brands have been moving hard on this front as well as they seek to snare Millennial buyers, especially. Last year, GM announced the launch of Chevrolet  MyLink, a Sync-like system that began with the Chevrolet Volt  late last year. GM also has been making its OnStar system connection-friendly to mobile devices brought into GM vehicles.

And last year, Kia  introduced a voice-controlled infotainment system called Uvo (stands for "Your Voice"), based on technology that the Korean brand developed with Microsoft after the exclusive Sync partnership between Ford and Microsoft expired.

Consumers are "able to bring in PDAs, USBs, iPods or whatever, and control it all through voice commands," said Michael Sprague, Kia's vice president of marketing in the United States.
But just because auto brands are trying harder than ever to attract Millennials with connectivity doesn't mean there won't be bumps in the road.

For one thing, young consumers' attitudes toward their smartphones can be debilitating if the same attitude applies to automotive applications of mobile technologies, because the car industry's new-product cycle remains way slower than that of the frenetic consumer-electronics industry.
"With a phone, they replace it every year," Wallace said. "What are their reactions when they have to spend so much more on a car and then are expected to keep it for six or eight years and then trade it in?"

Of course, Millennials' mobile mindset also affects how car brands can market to them. Their primary orientation has become social media, so "introducing new vehicles through Facebook has become the new test drive," argued Liz Vanzura, chief marketing officer of MMB Advertising, Boston, and Cadillac 's former chief marketing officer.

Kia last year addressed this in part by using about two dozen different icons at the end of its TV commercials, which quickly communicate to the icon-focused Gen Y the features of the vehicle, such as a panoramic sunroof.

"That communicates to them something about the vehicle better and more quickly than a voiceover," Sprague said. "They see icons and know what they mean because that's the world they live in."
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