Automakers woo young buyers with dorm room on wheels
( 2002-05-03 11:42) (7)
Standing in front of a Toyota show car at the recent New York auto show, Peter Avram seemed downright confused.
"It looks just like an old van," he proclaimed. "I just don't get it."
He's not supposed to.
Approaching his 50th birthday, Avram is a graying Baby Boomer, once the most sought after of demographic groups. But now, carmakers have their sights set on a new generation of motorists.
Whether you call them Generation Y or the Echo Boomers, there will be around 70 million of them old enough to own cars by the time the decade ends -- and ultimately, they'll be an even larger group than the post-war Boomers, according to various industry studies.
So far, though, they've proven a difficult group to gauge, often rejecting the brands that were so hip to their parents and even their older siblings.
For domestic carmakers, who couldn't really connect with Baby Boomers, that offers a chance to start all over again.
But for imports -- such as Toyota Motor Co. and Honda Motor Co., which scored big with the post-war generation -- the demographic shift poses serious risks.
"Right now, I don't think anyone knows what this customer wants," concedes Toyota Motor Sales USA Vice President Jim Lentz.
Still, as head of Toyota's brand-within-a-brand, Scion, Lentz has the job of ensuring the Japanese carmaker gets a handle on the automobile aspirations of the Millennial generation.
An indication of where the company is headed could be seen at the New York auto show in March, where the automaker showed off two show cars -- the Scion ccX, an edgy, futuristic sports coupe, and the Scion bbX, a squared-off, van-like vehicle with sports seats and "studio-quality" sound engineering.
Toyota plans to start production of the bbX and ccX next year as 2004 model year vehicles and price them somewhere below 18,000.
Honda's pitch to Gen-Y, the Element, also goes on sale next autumn and is big on the boxy look.
A production version of a concept car, the Element is meant to "serve as a mobile dorm room or base camp," according to Senior Vice President Tom Elliott.
It even has a hose-down interior to make cleaning up easy after a party or a camping trip.
To get a feel for what Gen-Y wants, automakers are doing a lot of non-traditional research.
Element's design chief, Eric Schumaker, spent three years working with a group of target consumers, many still too young to drive.
"It was interesting doing the research," he says, suggesting the biggest difference from older consumers is that Echo Boomers "work to live, not live to work."
Getting it right is going to be critical, observers caution. For domestic makers, missing the mark with the Baby Boomers was a costly mistake.
When that generation first came of driving age, General Motors Corp. held roughly half of the US market.
Today, its share hovers at barely 28 percent, and among Boomers, it's even lower.
Not that GM hasn't tried.
It actually preceded the Scion strategy with its Geo franchise, which had only modest success selling re-branded Japanese vehicles, such as the Isuzu-made Storm.
More recently, the Pontiac Aztek (what GM calls its "sport recreation vehicle") was supposed to connect with young buyers, but has proven one of GM's biggest failures in years.
While DaimlerChrysler's Chrysler PT Cruiser (a popular retro model evoking 1930s American gangster rides) has done far better overall, it has connected with Boomers but not the Millennials the automaker also sought.
Chrysler hopes to do better when it introduces two new versions, the PT Turbo and a Cruiser convertible.
So far, Volkswagen has been one of the few automakers to successfully attract the youngest generation of buyers with quirky products, such as the New Beetle, and its irreverent ad campaign -- which borrows many of its themes from the 1960s ads that worked so well with Baby Boomers.
Korean makers have also been gaining ground, thanks to prices that start as low as US$10,000 for some stripped-down models.
Cost is clearly a factor that automakers say will impact their success in attracting young customers.
With the average passenger car now costing about US$22,000, according to Comerica Bank's Automotive Affordability Index, far fewer young buyers are buying new vehicles than was the case 30 years ago.
Unless manufacturers can find a way to keep a cap on prices, industry officials admit, many of their Gen-Y-targeted products could simply wind up selling youthful style and imagery to older consumers.
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