• Dec 9th 2010 at 12:00AM
  • 258
Cars like the 2011 Ford Fiesta are intended for younger... Cars like the 2011 Ford Fiesta are intended for younger buyers. However, a poor economy is keeping sales sluggish within that demographic (Ford).

Talk to almost any auto executive today with a marketing title, and the conversation will come around to "reaching younger buyers." Carmakers have an ever-expanding lineup of products aimed at youth: Nissan's Cube and new Juke, the Ford Fiesta, Chevy's Cruze and forthcoming Spark, and Toyota's new Scion tC, among others.

But high unemployment rates among younger car buyers combined with the slowly recovering economy means that many of these vehicles will not be purchased by so-called "Millennial" buyers, those kids who don't know what an LP record is and wouldn't recognize a rotary phone.

Fiesta Only Fourth

If there is one new vehicle on the market these days that embodies the "youth car," it is the new Ford Fiesta. Ford used social media outreach to engage Millennials for 18 months before the first cars rolled into dealerships. The work paid off, achieving product awareness among 18-to-34-year-olds that was north of 40 percent before the first TV ad ran for the car.

The Fiesta has been on sale for a few months, but the car isn't setting the sales world on fire, and the rest of the small-car segment isn't hot either. The Fiesta was only the fourth-best-selling subcompact in November at 3,473 units, behind the Nissan Versa (6,724), Hyundai Accent (4,052) and the Honda Fit (4,052).

Ford's head of sales analysis George Pipas says the sluggish sales are primarily caused by young people staying out of the new car market. Fifty-percent of first-time car buyers opt for small cars.

Younger Buyers Edged Out

Young consumers have been forced to the sidelines because of high unemployment, under-employment and the need to repay student loans and credit cards. Unemployment is nearly 15 percent for those aged 20-24, more than 50 percent higher than the national average. Unemployment is 10 percent for those 25-34. No wonder nearly half of young adults aged 18-24 were living with their parents in 2009.

In a sign of the times, one of the earliest pieces of the 2010 healthcare reform legislation to be enacted was the ability of families to keep their adult, post-college "kids" on their health-insurance policies, because so many recent college graduates can find neither jobs, nor afford their own healthcare insurance.

The average cumulative debt among graduating seniors in 2009 was about $22,500, according to FinAid.org, a Web site that specializes in financial aid. But keep in mind, this is an average, which means many are graduating with much more debt. Even among those with jobs there are a large numbers who are under-employed, which usually means deferring a new car purchase for years.

Joseph Allanwood, 24, of Naperville, Ill., still has over $35,000 in student loans to pay off. A social worker, his $34,000-a-year job means he won't be buying a new car for a while, and he says none of his friends have been buying new cars either.

"I have a 2006 Chevy Impala my parents gave me when I graduated -- it was their car -- and it only has 60,000 miles on it," he said. "It's the best kind of car I know, which is paid for."

Boomers Still Spending

According Ford's data, the biggest drop in new car buyers in the last three years has been in the 18-34 segment, as annual sales have fallen from near 17 million a year to around 12 million this year. However, "there has been virtually no drop-off in buyers in the baby boom bracket," says Ford's Pipas.

So the market for these smaller, less expensive "youth" vehicles remains the boomers. The average age of new-vehicle buyers today is about 48, up from 43 just two years ago. The number didn't shoot up so much because of an aging population, but rather because younger buyers have stayed out of the market since the economic collapse of 2008.

These boomer buyers tend to fall into two camps. The first are those of the "forever young" mentality looking to buy a youth vehicle, while the other comprises those forced into an early retirement, those who saw their investments hammered in 2008, or, sadly, those dealing with both financial realities.

Take Robert Jefferson, a 51-year old engineering consultant based in West Orange, N.J. Jefferson was forced out of a job at a large corporation earlier this year, and needs to buy a car because he no longer has a company car to rely on. "I was driving an Acura leased through the company, but I'm aiming lower with my own money," says the father of two. "In new, I have been scouting the Scion xB, Hyundai Elantra and Ford Fiesta, but I'm also looking at used."

Searching For The Fountain

Earlier this year, Jack Hollis, the Toyota executive in charge of the Scion brand, used the site of Oakland University in suburban Detroit to launch the new tC coupe to the media. The college setting was used to remind reporters that Scion is a youth-targeted brand.

The 2011 tC, starting at just under $19,000, is important to Toyota to reach younger buyers and keep new blood coming into Toyota dealerships, which also sell Scions in their own unique showroom space. The average age of Toyota buyers is 57, while the average age of tC buyers is roughly 30 years younger. In addition, 70 percent of Scion buyers have said in surveys they would not consider buying any other vehicle sold by Toyota. But the company wants to drive that percentage down.

Mercedes-Benz executives are similarly worried about the fact that their average buyer is above 60 now. To better attract younger buyers to the prestige brand, Mercedes began running an online community called Generation Benz in 2008, intended to bring younger consumers into the brand while giving Mercedes insights about the 20-somethings. The site, at www.GenerationBenz.com is an invitation-only forum by which the company mines the Gen-Y attitudes, lifestyle and brand preferences.

Among the insights to date, Mercedes dealers were treating younger people who came into the showrooms like they had bed-bugs, especially if they didn't have their shirts tucked in. The company has dialed in better communication and customer handling skills into dealer and sales-associate training.

Does all this mean that automakers are wrong to obsess over younger buyers. "Not at all," says independent marketing consultant Dennis Keene. "The economy is doing a slow climb, and those people will come in to the market. Besides, you can always sell a so-called 'young car' to an older buyer, but the only way a young person wants an 'old' person's car is if their parents give it to them for free."



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  • 258 Comments
      • 8 Months Ago
      I'm 33 and find all of these vehicles impractical and ugly. I can go out and buy a 4-year old used SUV that will haul what I need for work plus has AWD (quite handy in snow!) and it's for the same price as all these NEW cars. Sticking to a good used vehicle so I don't have to pay depreciation.
      RED SKULL
      • 8 Months Ago
      Where are the buyers? try looking in the unemployment line it is very long these days. Keep buying imports America.
      johnsonbrown2000
      • 8 Months Ago
      This is a great little inexpensive car, it's built nice. People what a luxury car for 15 grand.
      chrislaurnen
      • 8 Months Ago
      Of course, bad Ford, bad GM, good Honda, cool Toyota. Give me a break. What, say something less than gaga about a Japanese auto maker?, come on, can't do that, they're the sacred cows of the auto world. And to do this wouldn't be hip or cool. I want so badly to be a hipster, and join the ranks of AOL's auto writers.
      tmotogib1
      • 8 Months Ago
      It is an interesting car, small but with some technology and excellent gas mileage. Alas I'm a boomer and I like cars that are either fast or luxurious. Most of the cars targeted to the youth are fugly as hell. The Scion shoe box, the Nissan Cube shoe box and the Honda Element ugly arse box on wheels. When my my girlfriend sees a woman driving one of the afore mentioned autos, she goes: look, I see a bitch in a box. The Fiesta looks better than the sh oe box cars. Too bad they aren't selling.
      danwat1234
      • 8 Months Ago
      Nissan Leaf for the win. This is a great vehicle for all ages, including youth.
      • 8 Months Ago
      Some people are confusing the Ford Fiesta from the late 70's (which would haul) with the Ford Festiva from the 80's/90's (which was not great). They are not the same car.
      • 8 Months Ago
      We (the younger generation) are all too broke to buy a new car, much less put gas in the ones that we're lucky enough to have!
      kitsnkats11
      • 8 Months Ago
      these cars are too expensive for young buyers. i looked a ford fiesta and it was $19,000! ridiculous! you are looking at a $400 a month car payment. if these car makers could make a car for $10-$13 thousand with the basics: a/c, cd, automatic, 30 mpg, they would sell like hotcakes. why is it, our american car manufacturers can make cheap cars for europe and not for us? i bought new cars all my life. i am 57 and have bought my first used car for cash...i love it! if i need to take a trip, i rent a cheap car from enterprise and away i go.
      • 8 Months Ago
      I sold Fords/Lincolns/Mercurys for more than twenty years. I've watched as their quality and style have improved immensely over that time period and would recommend/compete their vehicles to any on the market at this stage but for the life of me, I can't figure out why they think they have to keep naming new cars after the old POS's. What are you thinking Ford?
      Sheryl
      • 8 Months Ago
      I had one as a rental, and it is DEFINATELY a car for the young. It's sporty, it's cute, it has all the bells and whistles, but for a 40+ year old, I prefer comfort over sporty and cute! Before I rented it, the only other time I had seen one was on T.V., and I live in SouthEast GA.
      • 8 Months Ago
      im 37 and its a cute car and i would buy it cause ford is a good car. they need to change it for older people rather than young kids who probably cant affford it.
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