Automakers are striving to reach new customers these days: While it's baby boomers who have the most money and willingness to spend, carmakers are working harder and harder to attract millennials.
People older than 50 now account for 62.3 percent of the auto market, according to a study released Thursday by the AARP and J.D. Power. Ten years ago, this same age bracket made up just 40 percent of all new car sales. Consumers older than 50 accounted for 5.6 million car sales in 2011, compared with just 1.2 million sales to consumers 18 to 34 years old, the so-called millennial generation.
"So many automakers target millennials, but they're just not buying cars," said Mark Bradbury, the AARP's director of insights, who encourages automakers to place ads in his organization's magazine. "Not a lot of people pay attention to what the 50-plus car buyers are looking for."
Automakers are obsessed with interesting younger car buyers in their vehicles. A recent article in the Atlantic pointed out the conundrum automakers face: The millennial generation accounts for just a small slice of car sales, yet that demographic represents a huge potential market down the road.
That's why Toyota took a stab at a brand just for the youth market: Scion. When the brand launched, the age of its typical buyer was 35, according to Toyota. But that's been inching upward over the years and now is 43. That's really young compared with the age of the industry's typical buyer today -- 51 -- but indicates that younger buyers just aren't biting.
About a decade after Toyota launched the quirky, offbeat Scion brand, it is now starting to make it appear more mainstream, Automotive News recently reported. The recession has played a role: The younger buyers that Scion was trying to attract often couldn't get credit approvals.
Many millennials feel like they don't need a car to find the freedom they want, said Brad Smith, director of loyalty management for Polk, an automotive data tracking firm.
"Millennials are really delaying adulthood," Smith said. "They're delaying home purchases; they're delaying car purchases. For us, getting a car was the key to freedom. For a number of those people, their smartphone is their key to freedom."
Still, automakers remain enthralled with the younger generation. General Motors hired someone from MTV to help it appear more cool. And at industry conferences, the topic of how to encourage millennials' interest in cars comes up time and again. Automakers are crafting cars more integrated with technology and easily customizable based on what teens and 20-somethings say they want in their vehicles.
That strategy has worked for them in another direction: Boomers often adopt cars meant for young people; the boxy Scion xB, which attracted a median age demographic of 30, was popular with the 50-something set as well.
But the opposite often doesn't hold true. Brands like Buick and Lincoln are working hard to shake off their image as older people's cars, with mixed success.
Bradbury pointed out there are ways automakers can reach older customers without alienating younger people -- through niche publications that young kids don't read like, say, AARP's magazine. Jeep and Chevy have taken out ads in such publications in recent years showing modern older consumers enjoying the brands, he said.
"It is possible to do it," Bradbury said. "We've seen it done."
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Posted: 05/04/2012 12:36 pm Updated: 05/04/2012 12:52 pm