ROLLS-ROYCE may not strike you as a brand that’s ever more spry. After all, the 111-year-old institution takes its sweet time on its stately, half-million-dollar cars.
Its three-tonne Phantom sedan, for instance, undergoes more than 800 hours of work by the team in Goodwood, England, before being personally delivered to its intended dignitary in some exotic locale.
But, according to chief executive officer Torsten Müller-Ötvös, the bulk of the brand’s buyers are surprisingly young.
“We are seeing, in that segment of ultra-high-end-growth individuals, a fast decrease in average age,” Müller-Ötvös said.
“It’s fantastic, it really is.”
In practical terms, that means the global average age of a Rolls-Royce customer is 45 years old, down from 56 seven years ago, he said.
That’s lower than the average age of car buyers overall, which hovers around 52, and younger than the average age of luxury car buyers, too, which is 50, according to data provided to Bloomberg by Kelley Blue Book (KBB).
Buick, for instance, has an average new buyer age of 59. At Cadillac it’s 52, at Mercedes-Benz it’s 51, and at BMW it’s 50, according to KBB.
Land Rover’s average customer is 45, the youngest of any included in the data. (Rolls-Royce was not among the brands reviewed in that report - its numbers are internal.)
Bentley, a closer competitor to Rolls-Royce, reported an average buyer age of 56.2 years in 2014, though that number is likely younger now.
Get that cash
Why does attracting a young(ish) buyer pool matter? For one thing, it prevents against the hypothetical eventuality that your customers eventually die off. Older buyers tend to be loyal buyers, but as they age, their numbers naturally dwindle.
More immediately, it has to do with brand image. If pensioners are the ones driving your cars, the rest of the world inevitably associates the brand with their age set. That doesn’t exactly foster future buying excitement.
“If you’re appealing only to older buyers, you’re not growing that back end,” said Stephanie Brinley, senior analyst-Americas at IHS Automotive.
“If you’re not connecting at least on the aspirational level with a younger buyer, chances are when they get to 45 or 50 and are able to buy your product, they won’t think of you.”
It’s a good thing
The reason for the relative youth of Rolls buyers has to do with how they’re amassing their wealth, Müller-Ötvös said. Rather than in previous decades when acquiring it from Daddy was a viable, and respectable, option, he’s noticing the people turning up at his dealerships are self-made.
“It’s not any longer inherited money. The majority is all self-generated money in very young people who are already making fortunes, be it real estate, be it engineering, be it IT, be it Western entertainment, whatever.”
That’s promising. Experts have warily anticipated in recent years an expected slump in car sales as millennials begin to overtake baby boomers in the marketplace as the world’s biggest spenders.
The theory was that they cared less about owning things - houses, property, cars - than in just being able to access them at any given time. The success of shared-access businesses Uber, Airbnb and Rent the Runway, plus the rise in the development of self-driving cars and other forms of urban transportation in any number of various pods, seemed to support that idea.
But further studies have indicated the contrary. According to J.D. Power & Associates, millennials’ share of new vehicle purchases in the United States hit 27 per cent in 2014, up from 18 per cent in 2010. They will comprise 40 per cent of the US car market by 2020. (The report classified millennials as those born between 1977 and 1994.)
In China, the average age of new-car buyers hovers around 34. Thirty-eight per cent of all new luxury car buyers there are under 40. Last year, Cadillac boasted widely about its 34-year-old average buyers in China.
Pushing new product
Rolls-Royce developed the Wraith coupe and continues to expand its range of exclusive Black Badge cars, both of which are aimed at younger drivers and sold predominantly in the US.
“We are now catering all to the different kinds of set groups when it comes to customers,” Müller-Ötvös said.
“These are customers who for the first time said, ‘Oh, guess what. I like this Wraith, and I put it in addition to my Ferraris into my garage, because Ferraris can be stressful from time to time.’ — Bloomberg