Automakers Try to Lure Young U.S. Buyers

June 10, 2002 Bloomberg News is reporting that DaimlerChrysler AG's Chrysler unit expected the PT Cruiser to attract younger customers, with advertising for the sport-utility vehicle emphasizing starting prices of about $17,000.

Instead, the typical buyer has been more like Butch Heth, a 46-year-old store designer in Redlands, California, who bought a blue PT Cruiser in April. The average age has been about 50 for buyers of the vehicle, introduced in April 2000 and so popular in the first year that Chrysler couldn't build them fast enough.

"We thought as availability increased, the age would come down," said Tom Marinelli, vice president for the Chrysler and Jeep brands. "It didn't."

General Motors Corp., Toyota Motor Corp. and others have had similar problems luring younger customers, who help ensure future sales as U.S. competition increases. Average buyers of youth-oriented cars such as the Toyota Echo, Pontiac Vibe, Ford Motor Co. Focus, Volkswagen AG Beetle and Bayerische Motoren Werke AG Mini are at least in their mid-40s, according to market-research company J.D. Power & Associates and others.

"The auto industry is incapable of figuring out what youth want," said John Wolkonowicz, a consultant at Northville, Michigan-based Bulin Group, which studies consumer trends for automakers. "Every one of these cars, when introduced, was pitched as a youth vehicle. It didn't work."

Younger buyers are particularly important for Ford and Chrysler, which had losses last year, and General Motors, whose annual profit declined, analysts said. The U.S.-based automakers have been hurt as Asian and European rivals lure new customers.

Even Toyota, whose U.S. share rose 2.6 points to 10.3 percent from 1996 to 2001, is hustling to attract youth buyers. The automaker formed the Scion brand to sell cars and trucks to young buyers starting next year. Scion replaces Genesis, a Toyota internal effort that pitched the Echo as a youth car.

The problem is that baby boomers, born from 1946 to 1964, and the so-called "silent generation" born before them make up as much as 80 percent of the market for new cars and trucks, said Chrysler's Marinelli. Generation X, born from 1965 to 1978, accounts for about 23 percent of new-vehicle buyers, while customers 23 or younger are 3 percent, according to Westlake Village, California-based J.D. Power.

"Everyone, Vibe, (Toyota) Matrix, us, we aimed young and got the baby boomers," Marinelli said.

General Motors said it doesn't have an average age yet for buyers of the Pontiac Vibe. The company doesn't dispute industry estimates of that the average is in the 40s.

"We are targeting the under-30 buyer but it's such a versatile vehicle it will likely appeal to more buyers of different ages," said spokeswoman Kelly Wysocki.

Younger buyers don't want the cars their parents drive, Wolkonowicz said. They can't always afford the best new vehicles so they buy larger used models or cars such as Volkswagen's Jetta that are affordable and different from their parents' Toyota Camrys and Honda Motor Co. Accords, he said. Volkswagen and Mitsubishi Motors Corp. have the youngest buyers, he said.

Volkswagen attracts young buyers with its marketing and Mitsubishi because of vehicles such as the Eclipse sports car, said Alan Baum, an analyst at forecasting firm Planning Edge in Farmington Hills, Michigan.

"Volkswagen has really done an excellent job" of marketing to younger buyers, Baum said. "I've heard people extolling the image, even if they are downplaying the product."

Volkswagen and Mitsubishi both use advertising with music popular with younger buyers. A Volkswagen commercial for the Cabrio convertible revived interest in the late Nick Drake and his song "Pink Moon" and became a frequent Internet chat-group topic, the German automaker said.

"People my age want reliable and economical transportation," not more power or retro styling, said Bethany Weiss, 26, a San Francisco public relations consultant who bought a Jetta last month. Vehicles such as the PT Cruiser seem "targeted at older people," she said. The Jetta had the youngest average buyer age, at 35, in a 2001 J.D. Power study.

The age difference is consistent even on the Internet, where users tend to be younger. On CarsDirect.com, where Heth bought his car, the average age was 44 for PT Cruiser owners and 34 for Jetta owners, spokeswoman Wendy Barbour said.

Until the youngest buyers grow older and are able to afford more expensive new cars and trucks, baby boomers will continue to dominate the auto market, Wolkonowicz said.

"I don't care who they were trying to target, I'm oblivious to that," said Heth, the PT Cruiser buyer. "I just know what I like and I bought it."