Automakers push image for Generation-Y customers

Automotive Industries,  Dec, 2001  by Gerry Kobe

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The "Net generation" is the mast heavily pursued buyer group on the planet and virtually every automaker is positioning itself to be the Gen-Y manufacturer of choice. Toyota is the latest brand to examine its entry-level vehicles and realize that it is playing to an older, value conscious market, but missing the mark with the highly sought after, image-seeking, first-time new car buyers.

"The median age of current Corolla buyers is 44 years old," says David Terai, assistant chief engineer for the Corolla/Matrix platform. "That's three years older than the segment average and five years older than the segment leader, Honda Civic. So we added a second vehicle, a new concept in 'cool' for everyone too young and too lip for the Corolla sedan."

That vehicle is the 2003 Matrix, a street performance utility vehicle sharing the Corolla platform, suspension and drivetrain. It will sell at a price premium to Corolla, but it targets the heart of the elusive 20- to 3a-year old Gen-Y market.

"Toyota is definitely doing the right thing," says Jim Hall, vice president of industry analysis at AutoPacific. "Generation-Y is going to seriously outnumber the baby boomers and an automaker can't wait until those buyers are the big purchasing power before it changes its image. If it does, it's in trouble because its image will already be set in the minds of those customers. Every automaker has to do this."

In fact, many already have. Ford created a youthful "image" car with the SVT Focus, as did Honda with the Civic SI, Nissan with the Sentra SER, and at the high end of the scale as Subaru did with the WRX. These vehicles range from $17,000 to $24,000 and effectively redefine the "first-time buyers" price range. Pontiac will soon jump into the fray with its new Vibe, a platform mate to the Matrix to be built at the NUMMI plant in California.

"You have to redefine inexpensive," says Hall. "Eighteen grand these days is inexpensive. A 'strippo' Sunfire is about fourteen and in the Gen-Y buyer's eyes that vehicle is downmarket. Buy the coupe and it's not practical. Buy the sedan and you look like you are driving a daily rental. This buyer is willing to assume some debt for something that makes a statement, or on the flip side that doesn't make a statement they don't want. Image is everything."

Toyota in particular has learned that the hard way. Its Paseo was designed to bring a new generation of buyers to Toyota, but it was a coupe at a time when sedans and trucks carried the positive image. Then the Echo was supposed to lure buyers on price, but even Don Esmond, senior vice president and general manager of the Toyota Division, admits that the car hasn't done everything Toyota hoped.

He adds that Matrix will not compete strictly on price, but rather on the new metric of what is important to young new car buyers. And that is vehicles that are high in image and high in functional utility. For those who look strictly at price, Esmond says there is still Echo. For those that have more traditional values there is Corolla, and for those who place a premium on technology there is the hybrid Prius.

Launching a youthful image car today is the right thing for any manufacturer, providing that the existing image of the overall brand doesn't dominate the image of the new vehicle. It's also equally important to have a step-up vehicle planned for the new customer, just in case the strategy works.

COPYRIGHT 2001 Diesel & Gas Turbine Publications
COPYRIGHT 2008 Gale, Cengage Learning