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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:]
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 kmmatney on 8/13/2012 11:00:07 PM , Rating: 2
I agree with your post. GenY has it a lot harder than I did.
If I was graduating now, I don't think there is any way I would be buying a new car.

I was born in 1970, GenX through and through. I graduated with an Engineering degree with no debt. I went to UCLA, and tuition was $1500/year! My wife and I had no debt, we both got jobs, and went out and bought cars. At least I didn't go overboard - I just bought a Camry, which I kept until this year. However quite a few friends of mine went out and bought large trucks and 4Runners, and some even lost their jobs and couldn't make the payments. They were just careless, buying more than they could afford. At least GenY is more careful.

It's not just GenY, though. Now I'm 41, have had a good job since graduation, and can afford to buy any car. However when I replaced my Camry this year, I bought base model RAV 4, which I will be driving until I'm 50. We have 3 kids, and want to offset the cost of college as much as we can. They will probably still have a lot of debt, though. There are just more important things to spend money on than a new car.

By someguy123 on 8/13/2012 11:16:05 PM , Rating: 2
I'm not so sure about Gen Y having it harder in general, but I definitely share the same sentiment about schooling costs, especially at UCs nowadays. Estimated UCLA student budget for 9 months is 23 thousand dollars at the cheapest. Even years ago back when I went for my degree my father would constantly rant about how much cheaper tuition was and how he'd probably would've just dropped out considering he was working part time to pay for it. I'm a lucky guy and I give him lots of respect for helping me through those years, but if I had to work out of high school to pay for classes I probably would've been forced to go community, if at all.

By JediJeb on 8/14/2012 7:01:15 PM , Rating: 2
I believe it was John Stossle I saw the other day(not my most favorite journalist by a long shot) who actually said something that struck a note with me. For years government has been trying to "make up the difference so to speak" with giving universities money to help offset the cost of tuition. The problem is tuition has only gotten higher. Seems Universities have simply decided that if the government will help make up the difference in tuition costs they just raise the tuition so that students are still paying as much relative to what they would pay with no subsidies from the government and taking the government portion and blowing it on whatever they want. That is why so many students are being pushed to get college degrees, simply because the more students the universities get, the more money they get from the government, and the more they can pad their expenses with it.

Talking to some of the old professors I had in college 20 years ago, and some of the new ones there now, seems that salaries have not increased in proportion to the increase in tuition. So where has all that money gone? Electricity and natural gas for lights and heating of the building has not gone up 4x in the last 20 years, plus more building now days are much more energy efficient than they were back then. Salaries are fairly stagnant, number of staff is probably not that much greater. The money is going somewhere, and it is not going to improve the quality of education as it should, so where is it going?

By Taft12 on 8/14/2012 10:56:51 PM , Rating: 2
number of staff is probably not that much greater.

Number of administrative staff is MUCH greater. It's where a lot of the extra tuition cost is going (for minimal benefit I might add). Things like advertising didn't have the enormous budget they do now (again no benefit to students). The president's salary certainly hasn't been stagnant!

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