Automotive Blog

German luxury makes resonate with the young buyer

Automotive marketers continue to covet the young buyer 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 conquesting 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.

Posted by Tom Libby, Lead Analyst, North American Forecasting, Polk (12.18.2012)

About The Author

Manager, Loyalty Solutions and Industry Analysis

Tom currently uses his passion for the auto industry to serve as a Solutions Consultant for IHS Automotive's Loyalty Practice. His past roles here include Sr. Forecasting Analyst and PolkInsight Advisor (he worked for two years in Polk’s Woodcliff Lake, New Jersey office). Tom's other interests include reading, gardening, sailing and running. Aside from Detroit and New York, Tom has also lived in Los Angeles, Denver, and Boston, where he drove a taxi for two years. Tom has also traveled extensively in the United States and overseas, including an overland trip across Asia after graduating from college. Tom is inspired by people who practice what they preach and enjoys socializing with friends that he's met throughout his career and from school.

Tom is a past member of the Board of Directors of the Society of Automotive Analysts (SAA). During the 2009 calendar year, Tom was President of that organization. He is an active member of the Automotive Press Association, and in the past has written a blog for the online version of the Detroit Free Press. Tom has a bachelor's degree in history from Amherst College, an MBA with a marketing concentration from Columbia University and once served as an Adjunct Professor of Market Research at Pepperdine University in Malibu, California.