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Why Woo Generation Y?

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In its fixation with young people, the auto industry ignores the real vehicle buyers: Baby Boomers.

Has every executive in the auto industry gone slap-ass crazy? Is there no logic, reality or clarity of vision left?

I’m talking about why auto makers senselessly pursue Generation Y, young adults under the age of 35. Are auto executives complete out-of-touch idiots? No. But they can fall into the category of "Stepford executives."

Why is it that almost every manufacturer focuses such marketing efforts and new- product development on the most worthless, shiftless generation in history? I call them “Generation Why Bother.”

I recall what I said a few years ago about the Honda Element, a car specifically developed for this mystery generation. I called it the Honda “Elephant.” It was an abomination kids supposedly would buy in record numbers. As I predicted, the average age of the Element owner was over 40. The car appealed to gray panthers and dog breeders. It missed its demographic target, becoming just another cheap car for seniors.  

Toyota introduced the Scion as a youth brand. The average buyer turned out to be pushing 40. All Scion achieved was scabbing sales from the Toyota Corolla as another cheap car alternative for seniors and low-end adult buyers.

So what did the manufacturers learn from that? Not much.

Beginning with the North American International Auto Show in Detroit this year, it became clear to me that virtually every auto maker is focusing designs, products, sales processes and marketing strategies on Generations Y and X.

A crop of new-age Millennial-minded marketing gurus popped up overnight. They chant “the youth” mantra and disseminate questionable demographics. I think they are pulling these alleged statistics out of, well, a part of their anatomies. And the manufacturers are buying into it!

How many times have we heard we need to change everything we’re doing because Gen Y doesn’t like to be sold this way or that way, doesn’t want to be contacted this way and wants to be marketed to that way? Frankly, who gives a damn? Most of them can’t buy a box of Cheerios without a co-signer.

An in-your-face expose in AdWeek validated what common sense had already told me. Read this, wake up, snap out it and you’ll be okay: The Millennial Male Is Not Who You Think He Is.

Collectively, the Millennial Male is flat broke. Only 62% of them have jobs, and only half of those are fulltime.

They owe more than $1 trillion in student loans. That does not mean they graduated. Many didn’t. They just attended school and racked up the bill.

Here’s the stat that blew me away: more than one-third of Gen Y still live with mom and dad.

This is the elusive generation of consumers that enthralls the auto industry. Many of them are unemployed Xbox wizards living in the family home’s basement. They’re saving up for their next tattoo, not a new car.

We’re talking about the generation you can’t advertise to because they block and filter out your message. They’d rather occupy Wall Street than participate.

On the other hand, why are we ignoring the most affluent generation in history, people who are buying more cars than all of the previous generations?

I’m talking about the Baby Boomers, 77 million consumers who have more than 75% of America’s wealth. We’re talking about sane and stable people here.

An article by Bloomberg and research by the University of Michigan outlined how seniors buy 15 times more new vehicles than Millennials do. Consumers age 18 to 34 represent less than 13% of new-car buyers.

I’ll bet people over 50 are buying more expensive vehicles with higher profitability for the industry. Look at the statistical buying power of the Baby Boomers as opposed to Millennials: Millennials: 50+ Fact and Fiction.

Older people have the money. They have the motivation. They are buying.

When creditworthy Boomers are the real car buyers, why do automakers relentlessly chase Millennials?

We’re told the economic plight of this hapless lot will change. Well, when it does and if Millennials come around, then we’ll adapt and think differently. But I suspect by the time that occurs, they’ll have transformed into their parents.

Just sayin’. Keep those emails and comments coming. I appreciate you.

Jim Ziegler is president of Ziegler Supersystems as well as a trainer, commentator and public speaker on dealership issues. He can be reached at zieglerss@aol.com. WardsAuto readers also may comment on this article by logging in or registering below.

Discuss this Blog Entry 7

on Nov 26, 2013

Well done - finally someone who calls it as they see it. As a boomer with a generation Y kid in the house, I can completely agree with your assessment. Producing a car (or car line) marketed toward the youth is a great idea. The problem bagan when the automakers assumed that the youth could actually afford the cars (a $15,000 price point doesn't cut it). What the youth need is real affordability (or a good kick in the butt). But they need to get jobs first.

on Nov 26, 2013

Great article. I am a Gen X'er and have been selling cars since 1996. I work with a few Y'ers and one of them is very successful, he came from Poland so he is excited to be in america. Otherwise most of them don't have the fangs to hold on to the meat. They tend to be very negative and mad at the world because it owes them something. As one of the old guys (42) around the store they come to me for advice on car deals and I don't help them anymore because they don't listen. I probably did the same thing when I was their age. I don't know I think they will have to work it out the best way they can. I just know that with the car business 90% of the stores are a Meritocracy with 100% commission structure. This is where they run into trouble. It all comes back to training and teaching the basics to succeed. As far as working deals with the y'ers and millenials. I want to tell them to put the damn phone down when I am speaking and have some respect for the spoken word. Otherwise I will just adapt and keep on selling. Thanks for the refreshing article.

on Nov 26, 2013

Great article. I am a Gen X'er and have been selling cars since 1996. I work with a few Y'ers and one of them is very successful, he came from Poland so he is excited to be in america. Otherwise most of them don't have the fangs to hold on to the meat. They tend to be very negative and mad at the world because it owes them something. As one of the old guys (42) around the store they come to me for advice on car deals and I don't help them anymore because they don't listen. I probably did the same thing when I was their age. I don't know I think they will have to work it out the best way they can. I just know that with the car business 90% of the stores are a Meritocracy with 100% commission structure. This is where they run into trouble. It all comes back to training and teaching the basics to succeed. As far as working deals with the y'ers and millenials. I want to tell them to put the damn phone down when I am speaking and have some respect for the spoken word. Otherwise I will just adapt and keep on selling. Thanks for the refreshing article.

on Nov 27, 2013

Dear MrZiegler,
Let's see if I get this - Gen Y makes up 40% of auto shoppers (often shopping for their parents), They register 25% of vehicles. Boomers auto purchases are lessening in non- luxury segments as they have done a terrible job of saving for retirement or are still suffering from lower home values. Ignore 80million consumers at your own peril!

on Nov 28, 2013

Dear Mr. Rikess, there you go again with another unverifiable pseudo-statistic. You say they buy 40% of the vehicles because they did the shopping for their parents who bought the car. That is as bogus and silly as most of the snake oil you've been selling to dealers.

Sorry Mr. Rikess but old doesn't necessarily mean senile and we are capable of buying our own cars without junior's help. You seek to say that the stats that seniors buy most of the cars really means the kids did it. Facts don't bear that out. Ziegler

on Nov 30, 2013

The 40% of auto shoppers stat is meaningless. Who is actually buying the cars? Yes, boomers are buying fewer cars as we age, but the cars we buy are high margin vehicles for the OEM as well as the dealer. I'd like to see the statistic based on gross profit rather than the number of cars. We pay our overhead with gross profit, not volume.

Regardless, we will buy fewer vehicles as boomers and Gen Y will buy more as the grow up. AND as they grow up, the will learn more about the business world. They will learn the difference between a complex purchase on a large ticket item and buying a gadget from Amazon.

I speak to groups of young people regularly. They tell me what they want. They want to be able to go on line, get the best price, and not have to go through complications..... you know, like buying a new gadget when clearing some credit line on a credit card. Well, people in hell want ice water too. That doesn't mean they are going to get it. Gen Y wants to cut out the middle man. They are ruthless buyers with little understanding of the business world.

What is actually happening is an unholy alliance between the unwitting Gen Y and calculating vendors with dealers caught in the middle. The vendors demonize the dealers to attract consumers, all the while citing meaningless statistics like this 40% number. The vendors then sell leads to the dealers because the dealers haven't yet figured out they are being duped.

Figures lie and liars figure.

on Nov 30, 2013

BTW, my generation had to grow up too. My generation had some bad traits and our parents were convinced we'd all go to the dogs. There's plenty of hope for Gen Y. But its a little soon to be standing on our head as an industry trying to give them what they think they want.

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Steve Finlay

Steve Finlay is the editor of WardsAuto Dealer Business magazine and a senior editor for WardsAuto.com. His journalism career started 42 years ago as a crime reporter. A Michigan native, he likes...

Jim Ziegler

Jim Ziegler, president of Ziegler Supersystems, is a trainer, commentator and public speaker on dealership issues.
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