Car makers gearing up to woo Millenials

Even though the Millenials might still be a few years away from buying new, connected cars in significant numbers, they're a group car manufacturers have had fixed firmly in their sights for some time.

That's because they mean more to them than a mere demographic. To the connected-car space, Millenials exist as a kind of platonic ideal of what a connected car buyer should be like: already wired in and ready to engage the technology without any fear. Their digital lifestyle gets lived 24/7 and that includes their driving time, so they'll want connectivity and streaming infotainment while they're behind the wheel.

Once vehicle-to-vehicle (V2V) communication goes mainstream and vehicle-to-infrastructure (V2I) communication is improved, this desired demographic is expected to be there, helping speed up monetisation of the connected car by being willing consumers of whatever advertising is served up.

But is this the case? Everyone thinks it is but what will happen two or three years from now when the rubber actually starts meeting the road and Millenials begin buying cars in numbers? That's when we'll start finding out what Millenials actually want and are willing to slap down money for.

Not all Millenials will want connectivity but most will. “Not everyone is interesting in content in the vehicle,” says Henry Bzieh, Kia's chief technology officer for connected cars. “Some people just want their vehicle for driving and they're happy with that. But there are a percentage of people out there who really value the connectivity equation and that's where we see the opportunity and as we all move forward in the years, that's where we'll find the Gen Y and Digital Millenials.”

It is a safe bet that the Digital Millenials will be very demanding and informed about what they require from their in-car electronics and that will put the manufacturers under a lot of pressure to create the right 'digital fit' for them. This will be challenging for a number of reasons. The Millenials will be both highly demanding and not necessarily affluent. Rather than go for the high-end, more and more will stick to the mid-range, but they'll demand the kind of rig you might currently expect to see in a $60,000 car. The car maker that provides this experience may very well be the one who sells the most cars.

Luckily, this will not necessarily be difficult, since technology prices are falling rapidly. Bzieh sees inevitability to it. He notes how, “not that many years ago, ABS was considered a premium feature. Now it's standard on cars. I expect the same to happen with these active safety features.” Bzieh predicts the same thing will happen with in-car electronics as a whole. “The technology price decay is going to help bring the component cost down and the cost elements to the masses,” says Bzieh. “We're going to be there, I expect, in the next five years. In terms of finally seeing this come into place. You're starting to see it today among the higher trim levels.”

When it comes to privacy and security, it is likely they will be very demanding on the latter, while being more realistic to downright lax on the former. “They've been raised on oversharing data,” says Roger Lanctot, Associate Director in Global Automotive Practice with Strategy Analytics Inc. Lanctot doubts they'll care that much about how their driving and in-car behaviour becomes grist for the Big Data mills like Google.

He believes they'll quickly come around to perceiving cars from the 'smart phones on wheels' perspective. “What they'll be questioning is why their car is having to use (navigation app) Waze. Why not all the sensors? Maybe if it had, my car wouldn't have braked hard because of a squirrel. Their expectations are morphing. They will not understand why you'd drive cars that are stupid!”

One area where Millenials are likely to differ from previous generations is brand loyalty. Many Millenials might view their cars simply as transportation because their relationship with the manufacturer of the car they are driving has to go through so many removes, starting with Bluetooth, Apple and Google.

“If you can build some of that functionality in, maybe it will start to become more difficult to distinguish a brand identity,” says Andrew Poliak, director of business development – Anutomotive for QNX. “It might be easier to switch vehicles because a lot of your personalisation will be done in your portable device.” But what he thinks might further exacerbate this is when and if lower-priced electric cars start coming in from places like China. “I've heard a number of Chinese manufacturers of consumer electronics discuss doing that with electric vehicles, it is like a big computer and it becomes easy to manufacture the car, just like you'd manufacture a PC. So I could imagine there being new brands.”

Even so, Poliak believes brand loyalty will hold firm on the higher-end vehicles. “Maybe it's a North American-specific thing but there's still a lot of brand identity and a personal identity with some of the vehicle brands,” he says. “I'm sorry, I don't care how much the latest 'whatever phone' costs, a $60,000 to $80,000 car is going to give you a status identity above a portable device you have.”

Kia’s Henry Bzieh is speaking at this year’s TU-Automotive Detroit. The connected car is the hottest commodity in the tech world. Find out how you can capitalise at TU-Automotive Detroit Conference & Exhibition 2015.

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