A blank slate - Opinion & Analysis the Business - marketing to Generation Y - Brief Article

Automotive Industries, August, 2002 by Maryann Keller

During a recent visit to friends, the conversation turned to cars and the usual discussion about what to buy. It's no surprise that the teenage children didn't agree with their parents. But what was a surprise was that the teenagers had such a broad group of brands they would consider. For them issues like

quality or where the company was headquartered were absent from their evaluation of the vehicles. They couldn't tell the difference between a domestic and foreign-made vehicle, and it was utterly unimportant to them. Their lives are filled with labels that say "Made in China" or Korea or Japan.

Baby boomers, now the dominant group of car buyers, grew up in an era when the Big Three were rocked by crisis. Vehicle quality was lousy, costs were high and management was out of touch with consumers producing dull, look alike models. Periodic financial disasters cratered their stocks while they pleaded for quotas on imports or loan guarantees or whined about government regulation to make cars safer or cleaner.

Companies were seen as lumbering bureaucracies that were unable or unwilling to change. When compared to the Japanese, whose attractive models, good quality and competitive prices or the Germans, with their emphasis on performance and engineering, Detroit seemed confused.

Although baby boomers have purchased American brand light trucks, they never returned to domestic sedans even when they were improved. No doubt the memories of their own experience shaped their buying behavior sending American sedans into long downward sales spirals that continue today.

While baby boomers will continue to influence the marketplace for the next decade, they will gradually be replaced by a new generation, so-called Gen Y. This new generation, larger in number than boomers, will transform the auto scene as much as the baby boomers did.

These kids can't retell horror stories about the Cadillac Cimarron or Allante or diesel. They don't know what an X or K car was. They don't know who Roger Smith is or even Lee Iacocca. Now in their formative years, they are likely to be driving the family Jeep or Explorer or Blazer in addition to the Camry and Accord. Their families have had comparable repair and maintenance experiences with both.

The transformation of Mitsubishi into a hot brand with young buyers is evidence of the ability of any brand to reinvent itself with this emerging group of buyers. Mitsubishi's ad campaign talks directly to that audience. It doesn't apologize for the fact that for many years it assembled uninspired vehicles and sold huge numbers of them to fleets. Its customers have no residual memory of past cars or mistakes.

Recently we've seen some Detroit brands emulating the images and music of the Mitsubishi commercials in the hope of tapping into the youth market. While I confess to liking the sounds of the Cadillac and Lincoin ads, young buyers don't have the money to spend on these brands. Detroit seems to forget that young people, even if assisted by their parents, are going to spend proportionately to their income and as a rule young people can't spend what their aging parents can on transportation.

A new generation of buyers is emerging and Detroit can reclaim share if it builds what they want. But that means smaller, less expensive models instead of giant trucks. These consumers are a blank slate when it comes to Pontiac, Buick or even Mercury but their perceptions will form very quickly. If Detroit again tries to pawn off imitations of good small cars, it will lose yet another generation of consumers.

MARYANN KELLER is a veteran auto industry analyst and author of the books "Rude Awakening The Rise, Fall And Struggle To Recover At General Motors" and "Collision: GM, Toyota and Volkswagen And The Race To Own The 21st Century."