While much of the mainstream auto market has continued to stagnate in terms of sales, and with McKinsey predicting little to no growth through to 2031 the luxury vehicle segment continues to gain market share, with growth rates ranging from 8-14% annually.
Margins in the luxury segment also hit double digits from 2016 to 2021, while the mass market remained in the low single digits during the same period.
How can automotive dealers with luxury offerings provide an elevated customer experience and to ensure customers keep coming back?
What is driving this upmarket trend?
Teah Wyman, automotive strategy manager at Uber for Business, says this trend began when car shortages suppressed sales across industry segments.
“In turn, OEMs really contributed to this by releasing more models for luxury and premium segments whose higher income buyers were better positioned to afford price hikes,” she explains.
“Afterwards, this trend towards luxury vehicles remained. Customers started to shift preferences, with an emphasis on value and quality, which favours luxury cars.”
Strong brand identities played a part here too, Wyman says, along with cutting edge technologies and more personalisation features adding to allure.
“The last piece to add to this picture, is the rising interest in electrification,” she notes. “More people are wanting electric vehicles and luxury automakers are getting ahead of this trend…this means more staying power because they are ahead of the game.”
For dealerships that offer luxury options, it’s important that they capitalise on providing an exceptional customer experience and a seamless buying process.
“Many luxury dealerships have exclusive showrooms,” Wyman points out. “And they are investing in upscale, visually appealing experiences that reflect the luxury brand. A curated experience for the customer. Dealerships are also employing very well trained and knowledgeable staff who can provide in-depth information and really cater to clients’ expectations.
“We’re also seeing customisation options in a way that we haven’t really seen before. So, you log into your app and decide what colour you want your car to be. What do you want it to look like? What types of features do you want? What type of sound system? All these things, I think, are here to stay.”
Meeting customer expectations: A premium service
Dealers are looking at bridging the gap between tried and tested efficiency and service to meeting customer expectations with higher quality amenities and options. When you bring your car in for servicing, dealerships can provide a high-end waiting room or even provide a ride service to get you home.
Uber provides ride options home for the customer instead of waiting for their car or using a shared shuttle service. For the dealer, this demonstrates that they go that extra mile for their customer, providing that premium experience.
“One of the things that we’ve actually been involved in at Uber, is helping streamline that process,” says Wyman. “Making it more cost effective for the dealership. Picking up or dropping off somebody’s car today means sending two people, right? You need to send somebody to drive them there, somebody to drive the car, and then somebody to bring the other one back. Using Uber means limiting that to only one driver, and not taking two knowledgeable staff off the dealership floor.”
And how do dealerships keep their high-end clients coming back?
“I think it is through personalisation and relationship building,” says Wyman. “Offering that personalised experience. We are really seeing this trend of providing these more luxurious experiences at scale. So, you feel like there’s this personal touch, but (for the dealerships) it is making sure that you can offer it to a wider audience in a cost-effective way.”
Staff are an important part of this equation, notes Wyman, helping the customer from end to end, and making sure that the full buying experience is exceptional. Supporting the customer all the way through their car owning experience.
Uber for Business: Supporting dealerships
Uber for Business offers a seamless experience to help bring customers home from dealerships and back to pick up their cars. This service eliminates the need for shared shuttles.
“This is an area where Uber is helping and we’re seeing a lot of really great feedback from customers,” says Wyman. “They tell us: ‘it was so easy, I brought my vehicle in for servicing, and it was great. I didn’t have to wait.’ They just sent them right home in a ride ordered on Uber Central and then brought them back when the vehicle was ready.”
Uber also provides convenient options for pickup and delivery services, helping to make it a more cost-effective way to provide valet type services. This trend is seen both on the service side, such as picking up cars for servicing, and on the new car side, where customers can perform test drives, as well as delivering the car after purchase.
“We really are providing this full end to end buying experience for the customer,” notes Wyman.
How is the luxury vehicle market changing?
Wyman says that the road ahead will see a shift towards more electric vehicles, with digital apps providing sustainability insights for dealership clients. These apps allow customers to track the number of electric vehicle trips and emissions saved from using ‘green’ Ubers. Uber is also working to make electric vehicles more accessible to luxury brands.
Autonomous features, such as advanced driver assistance systems will continue to be integrated into luxury vehicles, says Wyman:
“Cutting-edge technology will continue to evolve. Additionally, digital integration will become more seamless, allowing customers to access various apps on their phones, making the experience seamless for customers. Perhaps with roadside assistance in the future. Overall, Uber’s commitment to sustainability and integrating with various platforms will continue to drive the electrification trend.
“Customer expectations are shifting and it’s up to the OEMs and the dealerships to keep up with it. We’re seeing it across the board from the buying experience, all the way to the servicing experience, and Uber is helping in every part of the experience.”
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