Young Drivers Will Pay for Auto Technology, With a Catch: Study
- A new study shows young drivers are willing to pay for the latest automotive technology but say they can't afford it.
- According to the study, automakers can capture more young buyers by offering advanced technology in entry-level cars.
- The study found that technology interest in younger buyers goes beyond Internet connectivity and into the areas of safety and convenience.
NEW YORK — A new study from research firm GfK and the Consumer Electronics Association shows that young drivers are willing to pay for the latest automotive technology but say they often can't afford it.
According to the study, The Future of Automotive Technology, 74 percent of consumers in age groups Generation Y (25-34) and Generation Z (18-24) fall into the "most tech-interested" segment of car buyers.
No big surprise there. But it's interesting to note that this group also ranked highest in their willingness to pay for advanced automotive technology. And they're not just talking about the usual Internet connectivity and advanced entertainment systems, but also safety and comfort features, like in-car alerts of nearby emergency vehicles, vital-sign monitors and seats with massage and automatic memory.
By contrast, the study found Generation X (ages 35-44) drivers only showed average willingness to pay for such technology, while those in the Boomer generation (age 45- 64) were below average.
So it seems that automakers have the opportunity to capture younger buyers by piling on the latest high-tech goodies. But the catch is that technology tends to be rather pricey, and young buyers are the ones most likely to have limited budgets.
The study found that more than half of those surveyed from Generation Z, and nearly that many from Generation Y, agreed with the statement, "I'd love new auto technology, but it seems too expensive."
So, although buyers in these age groups are the most attuned to technological advances, and even express the willingness to pay extra for them, they also complain that premium technology costs more than they can afford.
Traditionally high-tech gadgets, power operation and advanced convenience features appear first in line-topping models, filter down to midlevel cars and then later, if ever, make their way to the entry level.
So the study suggests that the industry revamp its thinking. In a statement, Jeff Campana, senior vice president of the GfK automotive team, said: "We see a clear opportunity for automakers to engage these essential groups by bringing advanced devices and services to small cars and midsize sedans, which are more within the grasp of young car buyers."
That makes sense, since cars in this size and price range are the vehicles of choice for 44 percent of Generation Z shoppers and 38 percent of those in Generation Y. But whether the strategy makes economic sense for manufacturers is an entirely different question.
Edmunds says: Offering top-of-the-line technology in entry-level vehicles could very well entice a higher percentage of young buyers into new cars.