BMW Says It Has To Take More Risks If It Wants To Capture The Millennial Car Buyer

Hint to BMW: Millennials are far more interested in buying their next iPhone than getting a car. They are not inclined to get a pricey-to-buy and expensive-to-own BMW, like Baby Boomers were in their heyday.

(Disclosure: I am *NOT* anti-BMW. I've owned four and loved them all!)

I agree but add one more thing -

BMW was the "it" car for quite a while. Eventually they Trickled down to just about everyone. ANd that creates a problem for the high end buyer - since exclusivity is one reason why people buy high priced cars. The rich don't appreciate spending lots of money on cars and then finding them in front of many middle and lower income houses. Unfortunately - there is little BMW can do about this - this does run in cycles - and the same will happen to Mercedes as it has happened before as well.

They also seem to be less interested in the driving experience. They seem to place more value on simply being transported... whether on clean, convenient public transit, in an Uber, or self-driving car.

TomM: I agree with you. I don't know if you see that BMW and Mercedes did not have a choice other than to do what they decided. Baby Boomers were born between 1947 and 1964 with the bulk of them born roughly in the middle of the Bell Curve. As those affluent Boomers aged, their priorities changes. The teen Boomer who ached for an exclusive "I Have Arrived" BMW or Mercedes, worked aggressively to make that a reality, and this worked nicely for MB and BMW in terms of high-priced sales.

But as these Boomers aged, they became less focused on high-performance sport sedans, and more on something for driving the kids to daycare, soccer, etc. Less sport, and more practicality. Today, with the leading edge of Baby Boomers being 70-years-old and the trailing edge being 53, sports cars are less of a priority, while saving for retirement, or already living on retirement savings, is their new focus.

Simply put, the "Yuppie" demographic -- young, action-oriented people, with lots of disposable income, and driven to express that through purchasing high-priced exclusive luxury cars (e.g., old-school BMW and Mercedes) -- no longer exists[1]. BMW and MB had no option other than to try to tap into some market that would buy their cars: less affluent people who can still afford "premium" cars, which is BMW's and MB's new low end.

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[1] This market has not dried up entirely. There are still some "older" Boomers who can afford a nice car, but they want something more comfortable and easier to handle, which explains why BMW, MB, and even Porsche have "softened" in recent years.

BMW's problem is styling. Their products all look 10 years old.

The i3 and i8 look 10 years old?

BMW's biggest issue is not only that it doesn't stay true to its slogan of Ultimate Driving Machine but also that the slogan of Ultimate Driving Machine is not what millennials want. Millenials are more interested in their iPhones, Samsung Galaxies, ride-hailing apps etc.

The thrill of taking a small sports car out on the weekends for a thrill on the backroads is increasingly rare. BMW must adapt its products to this new reality or face declining sales and losing marketshare.

So their biggest issue is that they don't build "the ultimate driving machine" but also their biggest problem is that millennial aren't interested in the ultimate driving machine? Not sure what you're point is here? If they're not building the cars millennials aren't interested in then, isn't that a plus? Assuming you only want to attract millennials?

I wonder, how well do Audi and Mercedes live up to their slogans, just as a comparison?

Firewombat wrote "...I wonder, how well do Audi and Mercedes live up to their slogans, just as a comparison?"

Audi: Audi USA used the slogan "Truth in Engineering" from 2007 to 2016. They dumped it, likely as a result of Dieselgate, which affected VW, Audi, and Porsche (the Volkswagen/Audi Group, AKA "VAG"). So much for truth through cheat-related and illegal engineering. Or perhaps we DID discover the truth through their engineering: "We're so profit focused, we'll break the law and poison people to make more money." That's a scary thought, if you ask me.

Mercedes: Their slogan is "The best or nothing" -- Kind of extreme, don't you think? According to report such this http://www.consumerreports.org/cars-which-car-brands-make-the-best-vehicles-2017/ AND OTHERS(!), Mercedes quality ranks about 20th, roughly in the region where you will find the likes of Chrysler, Ford, Nissan and Volkswagen. Considering they're not #1 -- AKA "The Best" -- their slogan suggests they consider themselves "nothing." Not very flattering :-(

I perceive these marketing slogans as nothing more significant than brainless marketing tripe. I hope nobody makes any life-choices based on a marketing slogan.

Exactly. I think for a generation that wants to move back into dense urban environments and use Uber, Lyft etc. to avoid the hassles of car ownership such as insurance, parking, getting gas or charging and repairs/service, getting a BMW is the furthest thing from what they want.

This powerful demographic and cultural shift is well underway and companies like BMW can either adapt to it or they can suffer with declining sales and profits for their shareholders.

@GermaNut I totally agree, I suppose the shareholders of a company like BMW would be happy that the adapting better than most competitors, like having an electric vehicle on sale since 2014 instead promising to bring one out by 2019, and being one the most environmentally sustainable car companies in the world as opposed to using corrupt practices and cheating devices to bring down C02 emissions.

@BobM All I got from your comment was *old right-wing guy tries to lecture people on what motivates millennials*