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Why Millennials Are Bored With Sexy Cars

  |  December 12, 2011   |  Comments

How digital tech is turning American car culture upside down.

[First in a three-part series. Read part two. Read part three.]

Carmakers are sighing a breath of relief as car sales in November showed a healthy rebound and began inching toward pre-recession levels. But will American car culture ever be as strong as it once was?

The digital habits of Gen X and Gen Y suggest that cars won't be sex symbols any more, no matter how much the economy improves. Instead, that honor goes to smartphones and other electronic gizmos. Is it possible that autos are gradually being downgraded to basic tools for getting around, and maybe even - horrors - a commodity?

Mike Magrath, editor of Edmunds' car enthusiast site, "Inside Line," sees a clear-cut shift. The over-40 set "had to wait until they were 16 to explore the world, build social bridges, and woo at pretty girls. Now young people don't. Taking away their Internet - and all of the freedom contained there - is the same thing as taking away their parents' cars. Before, we needed cars; today, kids are stuck with them."

Experts at YPulse, a youth market research firm, agree. For Millennials, "status is what's on your Facebook page, not in your driveway," says Dan Coates, YPulse president. "High gasoline prices and dim career prospects have Millennials thinking about what they don't need and they don't need a car that goes really fast. They still want a car to look good, but they won't pay a premium for design."

Some of the coolness factor is also being transferred from cars to designer bicycles and car-sharing programs like Zipcar - which can be tough to swallow for big auto brands. Just ask General Motors. In October 2011, GM sparked a social media firestorm with a print ad in college papers that suggested that to impress women it was better to drive a car than ride a bike. The company quickly pulled the ad and apologized for its anti-bike gaffe.

Let's take a look at what the research says about next-gen car buyers.

For starters, between 2006 and 2010 the median age of all new-car buyers in the U.S. rose from 50 to 55, according to JD Power. At the same time, the percentage of 16-year-olds licensed to drive - the car buyers of tomorrow - dropped from 50 percent in 1988 to 35 percent in 2008, per the Federal Highway Administration. Carroll Lachnit, an editor at Edmunds.com, explains that drivers under 18 have more nighttime driving restrictions and teen-passenger restrictions than boomers ever did. "So teens have to figure out other ways to shop, socialize and entertain themselves. And they're figuring out that cars aren't indispensable," she says.

Regarding car brands, in a YPulse survey of youth car culture conducted in September 2011 about a third of college students said it doesn't matter which car they own. Separately, GfK Automotive got similar results. "Generation X and Y (ages 17-45) have yet to demonstrate anywhere near the loyalty toward auto brands that older people have," states its survey released in October 2011. "Automotive brands need to be aware of the effect of this disenfranchisement among younger consumers," warns Doug Scott, GfK Automotive SVP.

Overall, urban driving was declining even before the recession. In some major cities per capita vehicle miles traveled declined from 1995 to 2005, reported Peter Newman and Jeff Kenworthy at Curtin University in Australia. For instance, Atlanta fell 10.1 percent, Houston dropped 15.2 percent and Los Angeles fell 2 percent.

And an unexpected twist: YPulse researchers found that about half of college students like to "nest" in their parked cars, using them as mini mobile apartments for hanging out, listening to music, napping and eating.

Surveys and stats aside, Ian Anderson, 20-year-old social media consultant at Temin & Co, says his generation still gets excited about the freedom offered by owning a car. What do they want in their autos? "The greatest concern is the look, feel, and how practical and useful the car is," Anderson says. "After that comes good mileage and convenient, inexpensive online features and MP3 plugins."

Dasher Lowe, Draftfcb's group management director for Direct/CRM, oversees the loyalty efforts of Volkswagen. He reflects the perspective of many auto marketing executives.

"This [youth] generation still wants to own a car and they harbor passion about which car they drive," he says. About half of Jetta buyers are first-time buyers, he says, which shows that young people care about German engineering again.

Yet even skeptical auto marketers concede they now have to share young America's affection for cars with its infatuation with digital tech. As a result, more marketing dollars are flowing into Facebook campaigns, mobile ads, online games and YouTube videos.

For instance, Ford teamed up with social game developer Zynga in November 2011 for a social word game to promote its 2013 Escape model. The game, which included former Playboy model Jenny McCarthy, was available on Facebook, as well as iPhone and Android devices.

yaris3In another example, Toyota turned its 2012 Yaris into an avatar available for download on Xbox Live, as part of a branded miniseries campaign that launched in November 2011 (left). The miniseries, which is also available on the Web and mobile devices, includes two games that help unlock the Yaris avatar. Text and video banner ads on Xbox Live, mobile devices and MSN.com support the effort.

To drum up blog and Twitter buzz, Chevrolet is currently paying online service Klout to arrange three-day loans of its 2012 Sonic subcompact to people with high Klout scores.

At the same time, the auto industry is finally accepting the reality that young consumers want to be connected in their cars, says Draftfcb's Lowe. "The challenge is to provide a connected car that [safely] integrates all the connected electronic devices. Within five years it will be standard," he says.

Some carmakers are also paying attention to car-sharing services, says Edmunds' editor Caroll Lachnit. "They see the services as a way to market their products to young potential buyers," she says. Ford is supplying its Focus and Escape vehicles to the Zipcar fleet, and in November 2011 GM partnered with RelayRides to develop peer-to-peer car-sharing via GM's OnStar telematics system. The new system will debut in early 2012.

Still, many auto insiders resist any notion of a permanent shift away from the status quo. Lowe says car sharing is only a fad, and David Kiley, editor-in-chief of AOL Auto says, as employment improves, "suburban youth will be limited more by their paychecks than by any loss of desire of owning their own wheels," Cars becoming culturally passé to Gen Y "is something some overpaid, so-called futurist thought of," Kiley states.

Perhaps. But, then again, that's the kind of thing auto execs back in the late 1990s said about an odd little car called the Prius.

Future articles in this series will include a Q&A with RelayRide, a competitor to Zipcar, and a deep-dive into auto campaigns that embrace shifting attitudes toward transportation.

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Joan Voight is a Contributing Editor to ClickZ. Based in the San Francisco Bay Area, she has covered online and offline media, marketing and advertising since the mid-1990s for several business publications. She spent nine years at Adweek magazine, where she was San Francisco bureau chief, national senior writer and contributing reporter.

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