||German Luxury Brands Resonate with Younger Buyers
Automotive marketers continue to covet the young buyer (ages 18 to 34) and this holds true in the luxury market as much as in the mass market.
The luxury marque that captures the young buyer then merely has to retain him/her and move him/her up the ladder, while the luxury brand that fails to appeal to the young demographic is faced with the more expensive task of winning a customer from a competitor.
This is not to imply that customer retention is "easy," but it is generally acknowledged to be less expensive to retain an existing customer than to conquest a competitive owner.
In the luxury market, certain makes at the high end of the price range naturally will not appeal in large quantities to the twenty-something or even thirty-something who simply cannot afford their products. Maserati, Jaguar, Porsche and Land Rover fall in this category.
Among the more volume-oriented luxury makes with broader product portfolios, BMW has consistently captured the highest proportion of young buyers for the past five years. Runner-up Mercedes-Benz's share of this demographic has risen almost four percentage points, most likely due to the launch of the C250 compact coupe and the small GLK CUV.
In contrast, Lexus' share has declined and is substantially below that of its German rivals. However, Lexus currently lacks a compact CUV, a growing segment whose products are well-positioned to attract the young buyer. The new Lexus CX Series arrives next year, according to the Polk Automotive Forecast, filling this hole in the Lexus lineup.
Audi's share of the young luxury demographic has almost doubled and is approaching that of Lexus. Audi has benefited from the appeal of the compact Q5 CUV and the A3 sub-compact. The upcoming A3 sedan should add to Audi's success in appealing to the young luxury customer.
Cadillac, Volvo and Lincoln lag behind their luxury competitors in appealing to the young buyer, something they hope to address with new products. The just-launched Cadillac ATS and upcoming Lincoln MKZ are meant to appeal to a younger demographic, and both makes also have small crossovers in the pipeline which should also help.
(Source: Blog post by Tom Libby, Lead Analyst, North American Forecasting, Polk, 12/18/12)