The fact that the 18 to 30 age group are buying cars at much reduced rate is one of the largest and most significant relevance challenges of our time. Much of the sharp decline in new car purchases is due to the younger segment. The average age of new car buyers advanced from 43 up from 48 just two years ago due to shrinkage of young buyers. According to the Federal Highway Administration, the percentage of those under 19 with a driver’s license declined from 64 in 1998 to 46 in 2008. For many youths, cars are simply not relevant.

What can car makers do to resist this trend?

Underlying reasons such as college debt, unemployment, interest in digital games and social media, and urban living with its mass transit and Zipcars are difficult for firms to address. Even more frustrating is the reality that the magic of owning a car is all but gone. There was a time where cars like the VW bug, the Pontiac muscle car, the flashy Chevy Camero, or the Mazda Miata provided a community and a self-expressive benefit for young drivers.

Difficult though it may be, firms need to take on the challenge to recapture some of the classic appeal of owning a car for today’s youth buyer, because car firms can’t permit the buyers of the future to drop out. The task involves deep understanding of the young buyers of today, creating compelling relevant options for them and relating to them on their terms.

It starts with a concerted effort to understand the target market: What turns them on, and what makes them turn away from car purchases? General Motors has partnered with MTV to help provide insight in part by studying cool products such as the iPad, Dr. Dre headphones, and fashions at H&M. Chevrolet hired a young P&G researcher who after interviewing thousands of young buyers found that they are looking for cars that are safe, affordable, compatible with the latest tech gadgetry and good for the environment.

Products need to be responsive to what the young buyer is looking for and still be capable of having the distinctive look and personality that will relate to a youth segment. Toyota’s Scion, Nissan’s Cube, Honda’s FIT, and BMW’s Minicooper have all used a distinctive, funky design to try to capture the charm and appeal of the VW bug. General Motors has leveraged its consumer insights into features for the Cruze and the Spark. The Ford Fiesta mini subcompact is aimed at those focused on gas economy and the environment.

Finally, firms need to relate to the young buyers.

The fact that some are uncomfortable with test drives with strangers and others are looking for an “Apple store” sales experience has made firms redesign the visit to the showroom. Before the launch, Ford Fiesta recruited 100 people in their 20s to drive a car for six months and chat about their experience on social media sites, making the Fiesta a part of their world. A remarkable 40 percent of the target market was aware of the brand at launch.

This relevance task is formidable. But the stakes are so high that the option of allowing it to continue is simply not feasible. Staying relevant is an imperative. Watching what is being done and seeing which successful brands emerge will be instructive.


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