Baby, You Can Drive My Car

• Share

Pity the automaker trying to pitch a new car to today's style-conscious young American. That customer lives at the end of a bumpy, uphill road--as shown by the early response to Honda's Element. A boxy, SUV-like vehicle launched last year, the Element is what Honda calls a "dorm room on wheels." It was designed to appeal to young drivers who want to pile in gear and friends; TV ads show sexy college-age kids taking it to the beach and partying beside it. It's an alluring image--especially, it turns out, if your hair's thinning, you're hankering to recapture the feel of those footloose days, and you've got carpool duty for Little League this Saturday. The Element is selling nicely--but to folks whose average age is 42. And, of course, once 21-year-olds see boomers behind the wheel of a new car, they're likely to steer right on by.

You might think that sellers wouldn't care who buys their cars, as long as the money is green. But automakers worry about it a lot. They think it's essential to lure buyers as early as possible, so that they will develop a brand loyalty that might last a lifetime. That pursuit is one of the most maddening in the car business--but carmakers are chasing the young with a fervor not seen since the '70s. Toyota has just launched Scion, a new car brand aimed at recent college grads who want an affordable, functional vehicle (with body styling so odd it hollers "check me out"). Other automakers are working to rebrand their existing youth cars and polish the image of these vehicles by stuffing them with higher-performance engines and hot-rod accessories. The ultimate prize: billions of car payments that will flow from Generation Y. The 68 million Americans born between 1977 and 1995 represent the largest demographic bulge since that of their boomer parents and will drive car sales over the next two decades. About 3.5 million Gen Y drivers get their license each year. Automakers are clamoring to provide their first new car, even if it's a cheapie, in hopes of selling them pricier vehicles later.

Youth tastes are so whimsical, though, nobody knows what will be a hit. Assaulted by ads all their lives, teens and twentysomethings are growing immune to most sales pitches. Says marketing consultant Jim Bulin, 61, based in Northville, Mich.: "They don't want some company to say, 'We've got your number, and here's your product.'"

Recent hits with the youth market have tended to be flukes. Despite Honda's sales conundrum with the Element, the automaker has one of Gen Y's most popular brands, in large part because its durable little Civic scored with hot rodders who decided to customize it with turbochargers, flashy rims and other trimmings. Honda now holds 12% of the under-25 market (the favored industry shorthand for Gen Y) vs. a 6% share of the overall market, according to the research firm J.D. Power. The mystery is that the Civic was not particularly designed for or targeted to young drivers. Says Bulin: "A generation of kids looked around and couldn't find anything in synch with what they wanted--so they went to VW and Honda because those automakers came closest."