For all the attention the “one per centers” receive, they’re not buying the cars you’d think the ultra-rich would buy.
Sales of high-end luxury cars actually declined in 2013, notes DesRosiers Automotive Consultant – to 12,708. That’s half the peak for super-expensive cars, which came in 2000, when the the money-bags crowd bought 25,015 of the priciest rides.
Where have they gone? DesRosiers says these luxury buyers are now driving high-end intermediate and large SUVs – more than 50,000 of them were sold last year, in fact.
The growth in luxury car sales – cars, not SUVs – is in down-market models such as Mercedes-Benz’s new CLA and the new 2015 Audi A3 sedan, both of which start in the low-$30,000s. The so-called “wealth effect” is tempting baby boomers to buy Mercedes, Audi, BMW, Lexus or Infiniti. DesRosiers thinks boomers and millennials are going to drive luxury car sales to as much as 13 or 14 per cent of the total market this decade – 240,000-260,000 in actual sales.
Chris Travell of Maritz Canada believes car companies should do more to reel in the 18-35-year-old buyer. Car companies should target these buyers at a very early age with discounts and promotions.
Why? Maritz research shows that millennials buy a new car when they have a change in lifestyle or financial status, or they finally need a vehicle after years of going to school or bumbling around car-less.
“This is why graduate programs are very important,” says Travell. “In my view, I don’t think manufacturers put enough emphasis on these programs.”
That’s true. The typical car company in Canada offers a meagre $500 incentive to new graduates. That’s peanuts on a $33,000 or $34,000 CLA or A3.
The thing to remember is that millennials are not as forgiving as boomers. Millennials, when they’re ready to buy, demand stylish cars loaded with technology. They pay close attention to fuel economy and they live in a world where it is becoming more socially acceptable to drive a luxury car – and social status matters.
So it’s millennial and boomers that matter to the car business, not the one per centers.
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