State of Luxury Car Sales and Distribution to Generation Y

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State of Luxury car Sales and Distribution
Distributing to Generation Y

Team Members: Christopher Haydon
Fabiola Bayona
Hardik Patel
Tiffany Sarmiento

Professor:Aviad Pe’er

Class:Business Policy & Strategy

Date: December 19th, 2011

Luxury vehicle is a marketing term used to describe cars with greater performance, comfort, innovation, and features that convey a brand image. As the industry has grown, it has become much more complex; there is more intense competition and new needs for consumers.

By doing a SWOT analysis of the luxury car industry, the data reveals that although there are constant threats to this industry, there are also many opportunities. Some of the strengths for many of the established manufacturers are their high brand equity. They are world leaders and consumers view them that way; being the ‘finest’ in the industry, companies like Mercedes can charge high prices for their cars. This also leads to one of their weaknesses. The high prices and high maintenance costs of these vehicles make them available to only those who can afford this luxury. Most of these cars are marketed towards middle-aged wealthy white males. Luxury car manufacturers are challenged in finding new ways to market to consumers outside of this group. The changes in upcoming generations pose a huge threat to the luxury car market; yet, this threat can be turned into an opportunity. With a new target market come new ideas, new technology, and new and exciting ways to market. Not only do these companies face the threat of a new generation, they also face intense competition. Mercedes, BMW, Audi and Ferrari are among some of the top competitors in this market. How do you set yourself apart? Many of these companies are expanding around the world and creating competition globally. Due to the fact that there is a whole new generation to market to, luxury car manufacturers have other opportunities to look forward to. With technology constantly changing and improving, they also have a chance to make huge improvements to their cars. Innovative sound systems, touch screens, and rear view cameras already exist in many of today’s luxury cars. New technologies will give manufacturers even more features that can entice new consumers. This is a chance to gain a huge market share. These existing opportunities all contribute to a chance for future success in the luxury automobile industry.

The new target market, Generation Y, is the huge group of consumers which the luxury car market has to look out for. They are also known as the ‘Millennial’ Generation or the ‘Echo’ Boomers. This group was generally born between the late 1970s to late 1990s although some argue that this even extends to the early 2000s. Many of them are children of ‘Baby Boomers.’ Generation Y is known for having an increased familiarity with communications, media, and digital technologies. They are familiar with social media and can navigate almost any smart-phone. They are more culturally liberal than generations before them.

In order to meet the needs of Generation Y, automobile manufacturers must realize that this generation has different expectations than some of our past generations. This group has taken on the green movement. They are actively aware of their environment and are willing to take steps and buy products which will contribute to its health. In a survey taken on, 44% of Echo Boomers would consider purchasing a hybrid vehicle. Echo Boomers said they would be open to owning an echo friendly car, but would also like more information on this since not everyone had enough knowledge about hybrid vehicles. This gives manufacturers a chance to raise awareness among this demographic to gain their interest. Since this demographic is also the most technologically savvy, they expect to have the best technology in their vehicle. “The Gen -Yers are constantly exposed to technology...
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