>> ASIAONE / NEWS / THE BUSINESS TIMES / STORY
Young, successful and in the driving seat
Samuel Ee
Sat, Jun 30, 2007
The Business Times

(SINGAPORE) Younger buyers are driving sales of BMW and Audi cars in Singapore, helping to increase volume for the two premium brands in recent years.

Unlike more traditional luxury marques like Mercedes-Benz and Lexus, BMW and Audi are considered 'aspirational brands', attracting more younger buyers than the first two.

Their models are seen as having younger and trendier styling, while still possessing sufficient prestige and premium appeal for those who can afford them.

The local distributors for BMW and Audi agree.

'The BMW brand has clearly caught the eye of younger professionals who see a BMW car as an aspirational vehicle, a symbol of success,' explains Alex Yap, director of sales and marketing at BMW authorised distributor Performance Motors.

He says the compact 3 Series and the mid-size 5 Series have been very successful in the Singapore market, with the 3 Series accounting for about 50 per cent of BMW sales, and the 3 and the 5 together making up about 80 per cent.

Mr Yap says the ages of the 3 and 5 Series owners vary widely as the models appeal to a broad spectrum of buyers - from single, young professionals in their late 20s to older executives and entrepreneurs with families in their late 40s to 50s. But he is also seeing a younger set of buyers for the smaller 3 Series, for which the entry-level model is the 320i with a list price of $139,800.

'In 2006, we noticed a 6 per cent increase in BMW 3 Series customers in the 20-to-30-year age bracket compared with the previous year,' he says.

'Younger buyers see BMW cars as a statement of both success and style. And women are also increasingly becoming BMW customers, as many appreciate the design and driving experience which differentiates BMW from other brands.'

But no significant change in the profile of 5 Series owners was seen in the past few years.

For Audi, there is a worldwide trend of new owners being younger than, say, five years ago.

In Singapore, the public relations manager for Audi Asia Pacific says the brand's younger buyers are usually professionals in banking and finance, as well as the legal, IT and medical fields.

'A study conducted for Singapore this year also indicates that the Audi owners tend to be 'more knowledgeable' about cars, their technology and other related aspects, like motor racing,' says Pauline Cheah.

'In terms of mindset and personality, they are also well-read, highly articulate, aware of high-end niche brands versus just the more mainstream luxury brands, and confident in their selection of brands that reflect their personal taste.'

She says most buyers are still in the 31-plus age group because of the 'able-to-afford' factor. But for the compact A4 sedan line-up, there has been an 11 per cent increase in the number of buyers in the 31-40 age group in the past five years.

The A4, which starts at $141,000, is not the most affordable Audi, however. That distinction belongs to the A3 Sportback hatch, which is priced from $109,000.

For the bigger, mid-sized A6, there has not been a dramatic shift in buyer profile. The same 31-40 age group increased only 4 per cent over five years, says Ms Cheah.

In Singapore, sales of BMW and Audi cars have been increasing each year since 2003. BMW overtook Mercedes-Benz in total car sales here for the first time in 2005 when it sold 3,467 units versus 3,309 for the three-pointed star among members of the Motor Traders Association of Singapore.

That has mirrored the global pattern. BMW became the world's top luxury carmaker in 2005, while Audi is the world's fastest-growing premium brand.

But if Mercedes-Benz is worried, it is not showing it. A senior executive shrugs off the numbers, saying it is natural for younger buyers to go for an entry model.

'As with everything else, they start low. Just like in the housing market; you only buy landed property when you have reached a certain age,' he says.

According to him, Mercedes-Benz is not as strong in smaller sedans like the C-Class as it is in the mid-size and large saloon segment with the E-Class and S-Class. 'More buyers are entering the luxury market and once they are more successful, they will upgrade,' he says. 'Once they pass that entry-level stage, they will go for something more in line with their status and position.'

This could be an E-Class or an S-Class - the 'traditional symbols of success', because they are 'more expensive'. The E-Class line-up starts from $178,888 with the E200 and the S-Class from $292,888 with the long-wheelbase S300.

And even the buyer profile of these two higher-end models is changing.

'Our buyers are getting younger,' says the executive. 'Their ages are down by at least five years. In 2002, for example, they were aged 45 and above. Today, this has come down to 40 and above. More people are tasting success much earlier these days.'

 

 
 
STORY INDEX
Response already committed.
 
  Stream of consciousness
   
 
  How three of them chose their wheels
   
 
  Young, successful and in the driving seat
   
 
  Just half of business execs willing to go extra mile: poll
   
 
  Retail space getting pricier on back of rising demand
   
 
  S'pore leads world in growth of the wealthy
   
 
  S'pore's May CPI rises 0.4% from April
   
 
  GIC eyes Russia, Vietnam, Turkey investments
   
 
  Airbus gets US$3.7b SIA deal