Innovation

Toyota Plans To Turn Millennials Into Car Owners

When it comes to connected cars, Toyota is betting on youth. That bet could complicate, in a positive way, some of the general ideas out there about the preferences of millennial consumers.

The venerable car brand’s redesigned Corolla Sport hatchback and its newest Crown model are reportedly Toyota’s “first generation of fully connected cars,” featuring technology that enables such tasks as closing car windows via drivers’ mobile phones and virtual assistance service that offers navigation guidance, among other benefits. The integration of such tools is designed with those millennials in mind, part of the company’s effort to gain more revenue from a new generation of drivers. In Japan, for instance, the average owner of a Corolla sedan is 70 years old.

“At some point, Corolla became a car that attracted a much older customer,” said Yoshiki Konishi, chief engineer of the Toyota model, at a briefing earlier in June. “Keeping that clientele is also very important, but what is needed now is a rebranding.”

Not So Much About Tech As Marketing

The path to that future does not necessarily require the development of brand new technology. In fact, some of the features on those Toyota models are already familiar to drivers. But, as Bloomberg noted, the difference is marketing those vehicles as fully connected, a buzz that could serve to attract those young drivers.

That might seem to go against some apparent trends, not only in the automotive industry but the wider world of payments and commerce, where millennials are often assumed to be more interested in sharing or renting than owning — a view based on those consumers’ debt loads and a relatively slow march to affluence and wealth.

The peer-to-peer (P2P) marketplace industry for vehicle sharing continues to progress, largely because of those views. Recently, for example, the technology and processes that enable drivers to access shared vehicles via mobile apps, instead of traditional keys, has shown promise, and could soon find integration with original equipment manufacturers.

An Ownership Future?

When it comes to the future of vehicle ownership and millennial desires, the emerging reality might be more complicated than many people think.

Eighty-four percent of older millennials — a generation generally defined as people born after 1980 — already own vehicles, according to statistics from AutoTrader.com. For younger millennials, fewer than half have bought a car or truck, though 73 percent said they intend to within the new few years.

Additionally, 72 percent of those younger millennials said that having a car “is important to their social life.” Granted, young people have thought that since the days of the Model T — the early 20th century Ford model typically celebrated as the first affordable automobile  — and those seemingly endless nights of cruising, or pulling into a dark space at Lovers’ Lane, or being able to drive to the mall without parental involvement, demonstrate the never-ending importance of vehicles to friendships, romance and fun.

For those millennials, a social life is anchored to social media and other forms of digital communication — mountains of data support that point, and analysis, such as the PYMNTS Connected Consumer Playbook, shows how millennials are changing retailers. That would seem to lend credibility to Toyota’s marketing plan.

Winning Millennial Loyalty

That plan comes with hooks that the car brand hopes will keep those younger drivers’ loyalty with Toyota, and the connected-car services it puts into its new and upcoming models. The company will reportedly give vehicle buyers a three-year subscription to its T-Connect connected-car technology, reasoning that drivers will have a hard time giving up navigation help powered by artificial intelligence software, along with the virtual assistance.

Millennials have yet to solidly define themselves as consumers, as demonstrated by the varying attempts to figure them out and craft appealing products for them. But as those young consumers are not terribly young anymore and  as they move toward what should be the peak earning years of their lives  time flies, giving them all the digital connection they desire doesn’t seem like the riskiest bet in the world.

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