NEW YORK - Ford Motor Company’s Executive Vice President of Global Marketing,
Sales and Service and Lincoln Jim Farley earlier today delivered the New York
Auto Show Opening Press Breakfast Keynote address at the Javits Center. To view
video of the keynote, click
here.
Recently, Employee Communications had the opportunity to discuss some of the
themes of Farley’s planned keynote speech. Below are excerpts from that
conversation.
Q. How has the Great Recession affected the luxury automobile market?
A. The luxury car business is stabilizing and consumer optimism is
on the upswing. We feel confident that we know how the Great Recession has
changed the business, but there are bigger changes in sight that nobody seems to
be talking about. Several trends are emerging that will soon transform our
business once again and they are all being driven by customers who are changing
the universe around us whether we are ready for it or not.
Q. What type of trends are you referring to?
A. Luxury
used to be about size, price and lack of attainability. However the recession
has helped change that. Today’s consumers don’t necessarily believe luxury
needs to come with such a high price tag. In fact, research shows that the
majority of them expect to pay less than $60,000 for a luxury sedan. What they
are looking for is luxury-level quality, performance and features in a smaller
package.
Q. How are Millennials influencing the luxury car market?
A. The trends that we’re seeing in the luxury car market are part
of a larger economic shift that’s bringing new faces and preferences into the
marketplace. We all know that Baby Boomers drive our industry in the U.S., and
they’ll continue to do so for some time. However, Millennials are one group
that could surprise us. They have a sense of entitlement. They are discerning
and they have high expectations. They want a luxury vehicle that demonstrates
prestige and gets them noticed on the road. With prices dropping, their first
or second vehicle could very well be a luxury car.
Q. What kind of opportunity do we have with Hispanic consumers?
A. Hispanics are the fastest growing population in the U.S. They
are also becoming more affluent. There has been a 126 percent increase in U.S.
Hispanic households making more than $100,000 a year and as a group, U.S.
Hispanics hold a total net worth of $500 billion. These consumers are also
buying luxury automobiles at a faster rate than the overall market. Luxury
registrations for Hispanic customers were up 53 percent between 2002 and 2006
versus non-Hispanic registrations at only 13 percent. We have a huge
opportunity to reach out to this audience with the Lincoln brand, which is more
compelling, interesting and relevant than ever.
Q. How significant are women in today’s global car market?
A. Women are at the center of the most compelling trend of all.
Throughout the world, rapid urbanization is drawing women to cities where they
are trading agricultural work for careers in business. Here in the U.S., female
buyers are outpacing males for the first time. What this means is that one
billion women will be entering middle class globally by 2020 and many will be
buying vehicles for the first time.
There is a huge potential for these new female buyers to drive luxury growth
in developing areas of the world, such as Brazil, India, China, Russia and
Turkey. In China alone, women now contribute about half of household income.
That’s up from 20 percent in the 1950s. Their educational opportunities have
grown considerably, and they’ve entered the white collar workforce.
Women could change the way we develop and sell our products. Their practical
preferences for quality, value and safety may reshuffle global product
development priorities. For example, globally, women tend to order standard
powertrains and wheels and upgrade safety, communication and navigation
features. Women will also drive dramatic changes to the retail experience in
markets because in certain markets around the world they are unhappy with the
dealership experience.
Q. Has consumer focus on fuel economy changed since the recession?
A. That is perhaps the greatest cross-demographic shift we’ve seen
since the recession. Fuel economy is now the top consideration for vehicle
purchases, and it has resulted in a flood of claims and data that is starting to
overwhelm the market. We now have a torrent of “best-in-class” claims hitting
consumers from all sides, and it’s starting to become noise. We are seeing more
and more confusion as consumers try to make informed decisions. Given the
connectivity in our cars and the proliferation of mobile devices, we now have
the opportunity to give consumers better and more relevant data to understand
what they can expect in on-the-road fuel-economy performance.
Q. How are mobile phones changing the experience we have in our
vehicles?
A. We are seeing a shift in the way customers consume and
use information, and a lot of that is driven by the mobile experience. Mobile
growth continues to explode all over the world and it is already a huge part of
our daily lives. The mobile experience is particularly important to Millennials
– who expect the latest technology and seamless connectivity – and women – who
are passionate about staying constantly connected to friends and family. All of
this is having a profound impact on marketing, sales and service experiences.
