Baby boomers and generation X have served the automotive industry well. Vehicles have come to play a central role in the lives of these generations and although demanding, their wants and desires have been well researched, understood and catered for. Generation Y represent an entirely different challenge to the industry. They are "out of love" with cars; their passion is for technology. Like the rest of us, they are being swept into urban environments in which cars are often not necessary or are a hassle to drive and park; and their attitudes towards ownership are different. Renting, not buying, is normal to them in many aspects of life. Generation Y are the industry's future. Auto brands need to listen well and think hard about how best to engage with them, including understanding how this generation utilize social media and identifying the times and places to listen and engage.
Capturing interest of the disengaged youth market
A number of avenues need to be thoroughly explored: new concepts of mobility are in development in which membership rather than ownership serve to equip generation Y with the right form of transport for each occasion and need; a new breed of small city cars are coming, perfectly designed for the urban environment and digitally enabled to match the connectivity required by generation Y. Functional, cheap 'disposable' vehicles may capture the interest of some of these disengaged youngsters while the new breed of EV vehicles may serve to jolt generation Y out of their automotive apathy.
New business models & alliances needed
These simple examples illustrate the nature of the challenge the industry faces. This is not just about a new generation of vehicles. In order to respond to generation Y's needs, the industry will need to develop completely new business models and alliances. In the mobility example above the industry understands just one piece of the puzzle, the car. So Auto brands need to identify alliances to complete the puzzle, and recognise that they will need their partners more than their "would be" partners need them. In the connected car, the interface is key, but this is an area in which tech companies are the experts and auto companies are unlikely to catch up under their own steam.
The pivotal role of consumer insight
The industry is facing a time in its history in which it has many more questions than answers. It is a time in which consumer insight and understanding should play a pivotal role. Growth will come to those brands that gain a subtle and detailed understanding of the way generation Y lives, what they value, how they spend their time and money and then respond creatively with products and services that push the boundaries of their business models into uncharted waters.
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