I found this article in today's New York Times to be very interesting.
The Car Is for Kids, but Gramps Is Driving
By GEORGE P. BLUMBERG
Published: July 3, 2005
THE next time traffic snaps to a halt in a spectacle of brake lights, glance around. There's a good chance you'll see one of those cool hipster-mobiles - the coupes with erector-set spoilers, the hatchbacks in emphatic colors, the boxy wagons that seem more square than a 1950's sitcom.
These sorts of trendy cars, like the Toyota Matrix, the Honda Element and three varieties of Toyota's Scions, were designed and marketed expressly for 20-somethings. But the people at the wheel often look more like Ozzie and Harriet than like the serially pierced offspring of Ozzy Osbourne.
For a variety of reasons, manufacturers of youth-oriented cars are missing their targets. "The original anticipated median age of the Matrix driver was 28.8, but it's actually 42.7," said Art Spinella, president of CNW Marketing Research, a consulting firm in Bandon, Ore., that tracks auto industry trends. "And Element drivers are at 44.7 instead of the anticipated 28.6."
Graying baby boomers have co-opted many of the vehicles intended for buff young people. The median age of those driving the Pontiac Vibe, a small wagon similar to the Matrix, is 48.2; CNW says the anticipated age had been 30.2. The median of actual Dodge Neon drivers is 39.2, compared with the expected 22.7.
CNW calculates the anticipated age of drivers based on manufacturers' demographic projections, analysis of prices and market segments and other information. Data on drivers is considered more relevant than that on purchasers, because parents often buy children the cars they demand, skewing the demographic profiles.
Automakers would love to get the business of Generation Y, but this tribe - loosely defined as the 70 million Americans born from 1977 to 1995 - has proved elusive. While companies exhaustively research Gen Y's tastes and desires, they have run up against an obstacle: relatively few can yet afford new cars.
"The boomers have the money," Mr. Spinella said. "The 50-plus group is responsible for 50 percent of sales, and that grows to 54 percent in 2010." In that same period, he said, the 15-29 age group will never account for more than 9 percent of sales.
After that, the aging Generation Y will make its presence felt. By 2020, these Americans are expected to buy more than six million new vehicles a year. As they grow older and richer they are likely to mirror, to some extent, the boomers who came before.
Therefore, carmakers are concerned with more than selling cheap econoboxes to Gen Y today. The companies hope to draw in young customers gradually, cultivate their loyalty and sell them fancier cars later.
Even the best-researched plans can have unintended consequences, as Honda found. "We pitched the Element to 18-to-25-year-old males as a big box which could be like a rolling dorm room, and hold their stuff," said Andy Boyd, a company spokesman. But the Element's quirkiness - with its wide-open interior space and rubber floor - appeals as much to older hobbyists, families and businesses, who like the utility and the fact that the vehicle can be hosed out.
Bob Van Almkerk, a sales manager at Brandfon Honda in Branford, Conn., says he sells Elements to boomers and empty nesters. "I'm thinking our customer base is age 35 to 70," he said. "A fully optioned model runs about $22,000. How can an unemployed college kid afford that?"
After Toyota tried and largely failed to sell Echos and Matrixes to young people, the company set up Scion as a separate brand with unconventional marketing methods. (For instance, custom versions of the cars are parked near hip night spots, so young people "discover" them on their own.) Toyota also wants to lower the median age of its buyers, which a spokeswoman, Ming-Jou Chen, said was close to 50.
The Matrix wagon and Echo subcompact were influenced by a Toyota program called Genesis, an attempt to research the desires of young people. Yet young people began calling the Echo the "Yucko," because of its frumpy styling and bare interior. Older people liked the frugal, upright car for another reason: it was easy to get in and out.
"We learned a lot" from Genesis, said Brian Bolain, Scion's national sales promotion manager. He said the Echo was seen as "too mainstream" because of its Toyota badge, and "we still got older Toyota buyers."
Andy Turton of TNS, a market research firm that studies the buying patterns of teenagers, said 16- to-19-year-olds did not aspire to Toyotas the way they dreamed of getting a Honda or a Volkswagen. "It's not about practicality," he said of the reasons young people like particular brands. "Teens see the car as an extension of themselves."
Each year, Mr. Spinella at CNW compiles the Stodgy Index, based on surveys in which young people rate the appeal of car and truck brands. Toyota comes off with a lackluster image, but Scion scored at the top. Mr. Turton said his annual study indicated that more than 30 percent of teenagers were aware of Scion, "pretty good for this short time and with such narrow marketing."
More than 160,000 Scions found buyers between June 2003, when the division started selling cars, and the end of May. Jim Farley, the Toyota vice president for Scion, said buyers of the xA hatchback and xB wagon had a median age in the mid- to- high-30's, while the median for the newer tC coupe was in the mid to late 20's. He said 85 percent of Scion customers were new to Toyota, 52 percent were men (versus 60 percent women for the segment), 25 percent had co-signers, and 66 percent configured their cars on the Internet.
Still, Brian Weinberg, general manager of Grossinger City Toyota in Chicago, said his average Scion buyer was 37 years old.
And 160,000 customers do not a self-sufficient brand make. "Right now, there aren't enough Gen Yers in the market for Scion to have an average age in the 20's," Mr. Farley of Scion said. He said the age of the average owner could creep up as more older buyers discovered the cars.
"Looking back, I'd say we should have said we're targeting trend-setters over all, not just youth," he said. Mr. Farley agreed that getting new buyers into Scions was only half the job: "We need exciting product for them to move to," once they are ready for a more expensive car. "It won't happen," he said, "with today's Camrys or Avalons."
Will carmakers continue to be surprised that the youngsters they seek are not buying their cars? "Half my friends are into cars and the other half just cares if a car runs," said P. J. McCombs, a 22-year-old musician who has gained a bit of fame for the car reviews he posts at epinions.com. "But being into cars can mean a 20-year-old Camaro."
Mr. McCombs, who recently graduated from the University of California, Davis, said in an interview that he had noticed a growing number of Scions on campus, though used cars from the 1990's remained most popular. "Ten-year-old Eclipses and Civics are all over," he said.
The Car Is for Kids, but Gramps Is Driving
By GEORGE P. BLUMBERG
Published: July 3, 2005
THE next time traffic snaps to a halt in a spectacle of brake lights, glance around. There's a good chance you'll see one of those cool hipster-mobiles - the coupes with erector-set spoilers, the hatchbacks in emphatic colors, the boxy wagons that seem more square than a 1950's sitcom.
These sorts of trendy cars, like the Toyota Matrix, the Honda Element and three varieties of Toyota's Scions, were designed and marketed expressly for 20-somethings. But the people at the wheel often look more like Ozzie and Harriet than like the serially pierced offspring of Ozzy Osbourne.
For a variety of reasons, manufacturers of youth-oriented cars are missing their targets. "The original anticipated median age of the Matrix driver was 28.8, but it's actually 42.7," said Art Spinella, president of CNW Marketing Research, a consulting firm in Bandon, Ore., that tracks auto industry trends. "And Element drivers are at 44.7 instead of the anticipated 28.6."
Graying baby boomers have co-opted many of the vehicles intended for buff young people. The median age of those driving the Pontiac Vibe, a small wagon similar to the Matrix, is 48.2; CNW says the anticipated age had been 30.2. The median of actual Dodge Neon drivers is 39.2, compared with the expected 22.7.
CNW calculates the anticipated age of drivers based on manufacturers' demographic projections, analysis of prices and market segments and other information. Data on drivers is considered more relevant than that on purchasers, because parents often buy children the cars they demand, skewing the demographic profiles.
Automakers would love to get the business of Generation Y, but this tribe - loosely defined as the 70 million Americans born from 1977 to 1995 - has proved elusive. While companies exhaustively research Gen Y's tastes and desires, they have run up against an obstacle: relatively few can yet afford new cars.
"The boomers have the money," Mr. Spinella said. "The 50-plus group is responsible for 50 percent of sales, and that grows to 54 percent in 2010." In that same period, he said, the 15-29 age group will never account for more than 9 percent of sales.
After that, the aging Generation Y will make its presence felt. By 2020, these Americans are expected to buy more than six million new vehicles a year. As they grow older and richer they are likely to mirror, to some extent, the boomers who came before.
Therefore, carmakers are concerned with more than selling cheap econoboxes to Gen Y today. The companies hope to draw in young customers gradually, cultivate their loyalty and sell them fancier cars later.
Even the best-researched plans can have unintended consequences, as Honda found. "We pitched the Element to 18-to-25-year-old males as a big box which could be like a rolling dorm room, and hold their stuff," said Andy Boyd, a company spokesman. But the Element's quirkiness - with its wide-open interior space and rubber floor - appeals as much to older hobbyists, families and businesses, who like the utility and the fact that the vehicle can be hosed out.
Bob Van Almkerk, a sales manager at Brandfon Honda in Branford, Conn., says he sells Elements to boomers and empty nesters. "I'm thinking our customer base is age 35 to 70," he said. "A fully optioned model runs about $22,000. How can an unemployed college kid afford that?"
After Toyota tried and largely failed to sell Echos and Matrixes to young people, the company set up Scion as a separate brand with unconventional marketing methods. (For instance, custom versions of the cars are parked near hip night spots, so young people "discover" them on their own.) Toyota also wants to lower the median age of its buyers, which a spokeswoman, Ming-Jou Chen, said was close to 50.
The Matrix wagon and Echo subcompact were influenced by a Toyota program called Genesis, an attempt to research the desires of young people. Yet young people began calling the Echo the "Yucko," because of its frumpy styling and bare interior. Older people liked the frugal, upright car for another reason: it was easy to get in and out.
"We learned a lot" from Genesis, said Brian Bolain, Scion's national sales promotion manager. He said the Echo was seen as "too mainstream" because of its Toyota badge, and "we still got older Toyota buyers."
Andy Turton of TNS, a market research firm that studies the buying patterns of teenagers, said 16- to-19-year-olds did not aspire to Toyotas the way they dreamed of getting a Honda or a Volkswagen. "It's not about practicality," he said of the reasons young people like particular brands. "Teens see the car as an extension of themselves."
Each year, Mr. Spinella at CNW compiles the Stodgy Index, based on surveys in which young people rate the appeal of car and truck brands. Toyota comes off with a lackluster image, but Scion scored at the top. Mr. Turton said his annual study indicated that more than 30 percent of teenagers were aware of Scion, "pretty good for this short time and with such narrow marketing."
More than 160,000 Scions found buyers between June 2003, when the division started selling cars, and the end of May. Jim Farley, the Toyota vice president for Scion, said buyers of the xA hatchback and xB wagon had a median age in the mid- to- high-30's, while the median for the newer tC coupe was in the mid to late 20's. He said 85 percent of Scion customers were new to Toyota, 52 percent were men (versus 60 percent women for the segment), 25 percent had co-signers, and 66 percent configured their cars on the Internet.
Still, Brian Weinberg, general manager of Grossinger City Toyota in Chicago, said his average Scion buyer was 37 years old.
And 160,000 customers do not a self-sufficient brand make. "Right now, there aren't enough Gen Yers in the market for Scion to have an average age in the 20's," Mr. Farley of Scion said. He said the age of the average owner could creep up as more older buyers discovered the cars.
"Looking back, I'd say we should have said we're targeting trend-setters over all, not just youth," he said. Mr. Farley agreed that getting new buyers into Scions was only half the job: "We need exciting product for them to move to," once they are ready for a more expensive car. "It won't happen," he said, "with today's Camrys or Avalons."
Will carmakers continue to be surprised that the youngsters they seek are not buying their cars? "Half my friends are into cars and the other half just cares if a car runs," said P. J. McCombs, a 22-year-old musician who has gained a bit of fame for the car reviews he posts at epinions.com. "But being into cars can mean a 20-year-old Camaro."
Mr. McCombs, who recently graduated from the University of California, Davis, said in an interview that he had noticed a growing number of Scions on campus, though used cars from the 1990's remained most popular. "Ten-year-old Eclipses and Civics are all over," he said.
