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Is Automotive Technology the New Luxury?

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author photo by Autotrader April 2011

There are those who balk at the relatively high prices of electric and hybrid cars as a sign they will never catch on. But many consumers have begun to feel that the technologies inside these cars are luxury features in their own right, and are willing to pay the high cost of luxury admission even if the cars don't have traditional hallmarks of luxury on the outside.

According to Ed Kim, Director of Industry Analysis at AutoPacific, this is a trend that started well before the entry of any of the new plug-in technologies. "In the past, luxury was something that people aspired to when they were younger," he said in an interview with AutoTrader. "But what has happened over the last couple of decades is that younger people began to no longer feel they had to delay the gratification of owning luxury items."

Along with the younger generation's newfound economic muscle, the importance placed on traditional luxury items waned. "Because they were younger, the definition of what luxury is became very different," said Kim. "To them luxury could mean the utmost in technology, convenience, and the whole experience of owning a vehicle – not just leather seating and walnut inlay."

Some of the traditional measures of luxury still apply, of course, but more and more, people of all ages are starting to value high-tech features above all else. Although the trend of associating technology with luxury perhaps has its roots in younger generations – the Millenials, as they're called – the Baby Boomers have wrenched at the assumption that older buyers don't value technology.

"Technology has become a very key thing across most age groups," said Kim. "The Baby Boomers have always been agents of change and the spirit of the change they brought about never really went away. Look at the things they've embraced over the years such as the personal computer and cell phones."

"When you look at car technology, the Baby Boomers were the ones that embraced all kinds of new ideas," said Kim. "In the 1980s it was the minivan – actually a very radical idea. They embraced the SUV when that came out. And then, last decade, the big technological advance in automobiles was the hybrid–and the driving force behind that was the Boomers."

Kim points to Ford as a perfect example of a company that sensed this "technology is the new luxury" trend early on.

"Ford has made the very conscientious decision that technology is a core value of a modern Ford," he said. "In fact, we saw the roots of that thinking back in 2008, when SYNC debuted not in a luxury Lincoln, but in the Focus. It debuted in their cheapest car that was most accessible to the young buyer. That signaled a big shift in thinking away from the old paradigm that the latest technology should debut in your most expensive car and then trickle down."

The new trend may have started with in car technology such as SYNC, but these days it's more and more about the whole car experience. Vehicles like the Chevrolet Volt or the Nissan Leaf are loaded with all the in-car tech customers are demanding in addition to their high-tech plug-in drivetrains.

"The Volt is not a luxury model in a traditional sense," said Kim, "but it's priced like a luxury car–not because of wood and leather, but because of this cutting edge technology that's under the skin. That is luxury to a lot of different kinds of people these days."

This image is a stock photo and is not an exact representation of any vehicle offered for sale. Advertised vehicles of this model may have styling, trim levels, colors and optional equipment that differ from the stock photo.
Is Automotive Technology the New Luxury? - Autotrader