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Automakers battle to attract younger buyers

Smart fourtwo

Smart fourtwo designed a marketing campaign on Twitter aimed at a younger demographic.

Individually, they don’t look like much, but when you compile all 455 of the tweets into an old-fashioned flipbook it’s an entirely different story. 

The minicar manufacturer, Smart, has become the first automaker to create an advertising campaign uniquely for Twitter. Its Argentine subsidiary creatively turned a seemingly random collection of text characters into a “movie” showing a Smart fortwo cruising down a city street.  And, in keeping with the limits of a tweet, the tagline translates from the Spanish original, into: “It fits in any space. Why not in 140 characters? Smart Fortwo … a big idea for the city.”

Perhaps it should be no surprise to see Smart turn to Twitter. Plenty of celebrities have already found it an effective way to communicate with a young fan base that sees text messaging as a preferred form of communication.  If anything, social media has become the next big thing for automotive marketers desperate to reach out to the Millennials who will soon outnumber the vaunted Baby Boomers -- today the largest segment of automotive buyers.

But Millennials, also known as Gen-Y, aren’t going to be an easy target.  “There’s a pretty significant shift in how people are viewing automobiles and transportation, in general,” suggests John McFarland, senior manager of global marketing for Chevrolet. 

In fact, a surprising number of young buyers today don’t seem to be interested in automobiles at all, apparently preferring to sit with a smartphone or iPad in hand and communicating with friends in 140-character bursts, according to a new study by the University of Michigan’s Transportation Research Institute.

Where 69 percent of 17-year-olds had a license in hand back in 1983, that once seemingly ubiquitous rite of passage has become passé today, the number falling to just 50 percent by 2008, UMTRI  found.

“It is possible that the availability of virtual contact through electronic means reduces the need for actual contact among young people,” said UMTRI lead researcher Michael Sivak. “Furthermore, some young people feel that driving interferes with texting and other electronic communication.”

The U.S., incidentally, isn’t the only country where the trend has been measured.  Another study found similar declines in seven of 14 countries, including Germany, South Korea, Canada, Norway, Sweden and Great Britain.  In Japan, the shift has been well documented for more than a decade and accompanies other shifting patterns among younger citizens -- who also appear to be less willing to work the extended hours typical in that country since the end of the Second World War.

Automotive marketers are rapidly shifting strategy to target Millennial buyers.  Ford last week launched what it is calling the “Plug N Play in Electric City with the 2012 Focus Electric,” a Facebook-based game allows up to five people to take a trip in the new battery-electric version of the maker’s compact sedan. 

“Social networking allows Ford to meet customers it might not connect with through traditional advertising, making it easier to open a dialogue with a whole new audience,” said Focus Electric Marketing Manager Chad D’Arcy.

The maker is also betting on another generational shift, studies showing that the majority of Millennials are interested in hybrids, battery-electric vehicles and other alternate propulsion technologies.

That’s buoying hopes that vehicles like the Ford Focus Electric, Nissan Leaf, Chevrolet Volt and other battery-based products will eventually generate a substantial market, even though they are today little more than an asterisk on the automotive sales charts.

Indeed, while manufacturers may be shifting marketing strategies to reflect the tastes of the newest generation of motorists, the industry is beginning to make significant changes to the very products it hopes to sell to Millennials.

The new Nissan Connect is one of the latest systems to link the car’s so-called infotainment system with a motorist’s smartphone.  That makes it possible to use apps like the Pandora music service and access news on Stitcher.  The latest generation of the Mercedes-Benz mbrace system allows a motorist to check Facebook postings -- translated into synthetic speech to minimize driver distraction.

Nonetheless, “There’s no silver bullet for Gen-Y,” cautions Clay Dean, General Motors’ director of advanced design, “no single youth car.”  So it recently unveiled two prototypes it hopes might appeal to the new generation.

The Chevrolet Tru 140S, a 4-passenger, 3-door liftback, takes aim at the “Affordable Exotic” segment.  It’s “more poseur than do-er,” Dean admits, with an emphasis more on fuel economy -- targeting something over 40 mpg – than actual performance.  The second concept, the Code 130R, would target a similar price range of around $20,000. But more of a baby Chevy Camaro, it would target those who want some real muscle.

The two prototypes have been working the auto show circuit this year, most recently the NY Auto Show that concluded last weekend.  Chevy is also holding an ongoing series of clinics with young buyers that, Dean says, “we hope will lead us to better conclusions.”  He hints that Chevy hopes to have at least one product specifically designed for Millennials in its line-up over the next several years.

And it won’t be alone. The new generation won’t be easy to win over, but the industry certainly will be trying because Gen-Y is the biggest potential catch since the Boomers took to the highways.