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Automakers are struggling to capture this particular age group as sales drop

Automakers are starting to see a shift in the priorities of potential young car buyers today. Gone are the days of late teens and twenty-somethings rushing to buy their first car for a taste of freedom. Instead, this age group, or Generation Y, would prefer the latest smartphone or tablet. 
 
"A vehicle is really a discretionary purchase and a secondary need versus an iPhone, mobile phone or personal computer," said Joe Vitale, an automotive consultant with Deloitte. 
 
The car is no longer a teenager or 20-year-old's only chance at freedom. This generation can now connect via smartphone, tablet or laptop no matter where they are. 


Generation Y seems to be more into fancy gadgets than monthly car payments [Image Source: softwarewithstyle.com]
 
The other issue here is that members of this age group don’t typically have fat wallets. A cash-strapped twenty-something will choose the latest gadget to keep connected with friends and family rather than buy a car, pay to keep it maintained, purchase car insurance, etc. This is obviously much easier for those that live in large cities with reliable public transportation.
 
But having the latest device over a car isn't always a frivolous choice. Many companies today keep employees connected through email, a company website or other networks. Having a mobile device almost essential for the employed or even job seekers that need to have a way for potential employers to contact them at any time.  
 
So what does this mean for the auto industry? It means that automakers have to find new ways to capture this audience. The number of U.S. auto buyers ages 18-34 dropped to 11 percent in April 2012, compared to 17 percent in April 2007, which was before the recession. A total of 14 million U.S. auto buyers ages 18-34 are expected to make a vehicle purchase in 2012, which is the best year yet since 2007, but is still a drop from the annual average of 16.8 million from 2000-2007. 


Scion xB
 
Companies like Ford and Toyota have built inexpensive, subcompact cars like the Ford Fiesta and Scion xB/xD for the frugal youngsters that make up Generation Y. Automakers have also tried to lure this age group by adding increased technology for music and social networking in their vehicles, although the U.S. Department of Transportation has been trying to eliminate unnecessary technology in vehicles to reduce distracted driving. Automakers, however, have been rebelling and adding new tech anyway in order to give the public what it wants and increase sales. 
 
But the issue remains that if this generation just doesn't have the cash or the need for a car, automakers may have to find other ways to sell to this age group. 

Source: The Detroit News



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By Azsen on 8/13/2012 7:53:05 PM , Rating: 2
Agree with your post tayb, it sums up my situation as well. I would rather save money than buy a car at the moment. Since graduating 6 years ago I've had 6 different IT jobs. There were 4 contract positions and two permanent positions in that time, one of which ended in redundancy during the 2010 banking crisis. I have absolutely no interest in buying a car at the moment and I make do on public transport even though it's inconvenient and dictates that I live near a direct train/bus line to work. Why? Well that 5-10K or whatever that I would use to buy a car could be used as backup money in case the inevitable happens again and I lose another job. I'd rather have the backup money there so I can live off it for 3 months or so which is the time it will take to find another job usually.

Buying a new car is a terrible investment. For starters cars always depreciate in value. Also look at the model of car these dealers are peddling to our Gen Y age range. Looks awful. Box styles. I wouldn't be seen dead in one of those. Where's the sporty looking diesel-hybrid electric models? Gas prices are ridiculous these days. To be honest catching the train or bus in is a lot cheaper and they run on schedule. No traffic or operating costs running a vehicle.

Houses are also a terrible investment at the moment. In my country they're way overpriced forcing you to get a $500-600K mortgage in the city I'm in. That's the general house prices at the moment which is ridiculous. Generally I've read you aim for 3 times your salary. As a single person I'd be hoping for a mortgage of 170K. If I went for a $500K one I'd be overextending myself. Especially if there's no job certainty. I'd need to get married and have the wife earning as much as I do to be even considering it. Or I'd have to move to some backwater town in my country to get a 100-200K house but there'd be no IT jobs down there to support me. So houses are out of the question too.

My options, keep saving money and try and get by/stay entertained on the new technology gadgets in the meantime.


"There's no chance that the iPhone is going to get any significant market share. No chance." -- Microsoft CEO Steve Ballmer














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