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Personalization key for automakers to attract Millenials, Gen Z


The rise of ride-sharing services like Uber and Lyft, along with the notion that Millenials and Gen Z aren’t as attached to their cars as generations before, has led to predictions of the demise of vehicle ownership.

However, analyst and automotive broadcaster John McElroy said claims that younger generations have fallen out of love with the car are greatly exaggerated.

“Vehicle ownership is predicated on socio/economic factors,” McElroy told those gathered in Windsor this week for the annual Automotive Parts Manufacturers Association conference.

“Those that can afford cars will buy cars.

“Once autonomous vehicles and all the different scenarios play out and it’s significantly cheaper to not own a car, I could see millions might not want to own a car. Until then most people want to own a vehicle.”

McElroy said fully autonomous vehicles aren’t expected to appear in mass numbers until mid-century.

"A trip could involve Uber, a bike and finding parking," - Ted Graham, head of open innovation for General Motors

The Michigan-based McElroy, creator of the Emmy-winning Autoline broadcasts, added as the younger generations begin to have families and have careers requiring transportation, more will want to own a car.

McElroy’s sentiments are certainly supported by Statistics Canada’s report that Canadians registered 35.1 million vehicles in 2018. That’s a 2.6-million vehicle increase over 2014.

However, Millennial and Generation Z are already forcing massive changes on automakers in other ways.

Their passion for technology is a relentless tide washing over the automotive industry and the smartphone is at the centre of it all.

Ted Graham, head of open innovation for General Motors, said automakers must to pay attention to the differing metrics in measuring how they’re meeting customer needs.

The younger generations value the experience as much as vehicle ownership.

“It’s not just vehicles sold, but kilometres enjoyed,” Graham said.

Millenials and Generation Z also have different expectations of transportation. They’re not averse to multiple modes on the same trip.

“We have the simple problem of customizing the experience, making it more seamless for the entire journey,” said Graham, who sees ride sharing as an important new revenue stream for GM.

“A trip could involve Uber, a bike and finding parking. They want to be able to map a route of support services if they switch (modes of transportation).”

That level of customization also extends to vehicle ownership.

“Personalization of the automobile is critical to the adoption rates for the younger generation,” said McElroy, who added younger buyers also have a keen interest in safety advancements.

While the car’s shell of plastic and metal won’t look much different, McElroy said the look will become highly personalized.

“It will be like choosing a wallpaper on the outside,” McElroy said.

“The customization inside, at least initially, will be when you plug in your phone, it will go to (settings) you want based on the car assessing what your moods may be.”

McElroy added the push towards autonomous vehicles is also going to open up opportunities for automakers.

For instance the soccer mom image of the minivan could be primed for a complete overhaul with the new uses AV vehicles offer.

“Millennials and Generation Z like to hang out together, “ McElroy said.

“They want to go together in one vehicle. Once we get to true autonomous Level 5 vehicles, these Millenials will custom vehicles into the ultimate party machines.”

McElroy warns expanding the use of technology presents real challenges to the industry.

As connectivity is introduced to vehicles, it faces an increasingly high bar of expectations to clear.

“The key is at least matching what the consumer experiences now before you bring it into the car,” McElroy said. “It has to be a better experience than now.”

However, much of that technology remains costly and is offered initially in premium models driven by an older demographic.

Millenials and Gen Z are still early in their careers and are opting for more affordable models, such as smaller sedans.

“This tech is more interesting to younger people, so the key is the adaption rate,” McElroy said. “How do you get the cost down and the reliability and durability up?”

dwaddell@postmedia.com

Copyright Postmedia Network Inc., 2019


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