A A A

    Cars like the 2011 Ford Fiesta are intended for younger buyers. However, a poor economy is keeping sales sluggish within that demographic (Ford).

    by: David Kiley | AOL Autos
     

    Talk to almost any auto executive today with a marketing title, and the conversation will come around to "reaching younger buyers." Carmakers have an ever-expanding lineup of products aimed at youth: Nissan’s Cube and new Juke, the Ford Fiesta, Chevy’s Cruze and forthcoming Spark, and Toyota’s new Scion tC, among others.

    But high unemployment rates among younger car buyers combined with the slowly recovering economy means that many of these vehicles will not be purchased by so-called "Millennial" buyers, those kids who don’t know what an LP record is and wouldn’t recognize a rotary phone.

    Fiesta Only Fourth

    If there is one new vehicle on the market these days that embodies the "youth car," it is the new Ford Fiesta. Ford used social media outreach to engage Millennials for 18 months before the first cars rolled into dealerships. The work paid off, achieving product awareness among 18-to-34-year-olds that was north of 40 percent before the first TV ad ran for the car.

    The Fiesta has been on sale for a few months, but the car isn't setting the sales world on fire, and the rest of the small-car segment isn't hot either. The Fiesta was only the fourth-best-selling subcompact in November at 3,473 units, behind the Nissan Versa (6,724), Hyundai Accent (4,052) and the Honda Fit (4,052).

    Ford's head of sales analysis George Pipas says the sluggish sales are primarily caused by young people staying out of the new car market. Fifty-percent of first-time car buyers opt for small cars.

    Younger Buyers Edged Out

    Young consumers have been forced to the sidelines because of high unemployment, under-employment and the need to repay student loans and credit cards. Unemployment is nearly 15 percent for those aged 20-24, more than 50 percent higher than the national average. Unemployment is 10 percent for those 25-34. No wonder nearly half of young adults aged 18-24 were living with their parents in 2009.

    AOL Autos Poll
    What are your thoughts on youth-oriented cars like the Nissan Cube and Ford Fiesta?

    In a sign of the times, one of the earliest pieces of the 2010 healthcare reform legislation to be enacted was the ability of families to keep their adult, post-college "kids" on their health-insurance policies, because so many recent college graduates can find neither jobs, nor afford their own healthcare insurance.

    The average cumulative debt among graduating seniors in 2009 was about $22,500, according to FinAid.org, a Web site that specializes in financial aid. But keep in mind, this is an average, which means many are graduating with much more debt. Even among those with jobs there are a large numbers who are under-employed, which usually means deferring a new car purchase for years.

    Joseph Allanwood, 24, of Naperville, Ill., still has over $35,000 in student loans to pay off. A social worker, his $34,000-a-year job means he won't be buying a new car for a while, and he says none of his friends have been buying new cars either.

    "I have a 2006 Chevy Impala my parents gave me when I graduated -- it was their car -- and it only has 60,000 miles on it," he said. "It's the best kind of car I know, which is paid for."

    Boomers Still Spending

    According Ford’s data, the biggest drop in new car buyers in the last three years has been in the 18-34 segment, as annual sales have fallen from near 17 million a year to around 12 million this year. However, “there has been virtually no drop-off in buyers in the baby boom bracket," says Ford's Pipas.

    So the market for these smaller, less expensive “youth” vehicles remains the boomers. The average age of new-vehicle buyers today is about 48, up from 43 just two years ago. The number didn't shoot up so much because of an aging population, but rather because younger buyers have stayed out of the market since the economic collapse of 2008.

    These boomer buyers tend to fall into two camps. The first are those of the “forever young” mentality looking to buy a youth vehicle, while the other comprises those forced into an early retirement, those who saw their investments hammered in 2008, or, sadly, those dealing with both financial realities.

    Take Robert Jefferson, a 51-year old engineering consultant based in West Orange, N.J. Jefferson was forced out of a job at a large corporation earlier this year, and needs to buy a car because he no longer has a company car to rely on. "I was driving an Acura leased through the company, but I'm aiming lower with my own money," says the father of two. "In new, I have been scouting the Scion xB, Hyundai Elantra and Ford Fiesta, but I'm also looking at used."

    Searching For The Fountain

    Earlier this year, Jack Hollis, the Toyota executive in charge of the Scion brand, used the site of Oakland University in suburban Detroit to launch the new tC coupe to the media. The college setting was used to remind reporters that Scion is a youth-targeted brand.

    The 2011 tC, starting at just under $19,000, is important to Toyota to reach younger buyers and keep new blood coming into Toyota dealerships, which also sell Scions in their own unique showroom space. The average age of Toyota buyers is 57, while the average age of tC buyers is roughly 30 years younger. In addition, 70 percent of Scion buyers have said in surveys they would not consider buying any other vehicle sold by Toyota. But the company wants to drive that percentage down.

    Mercedes-Benz executives are similarly worried about the fact that their average buyer is above 60 now. To better attract younger buyers to the prestige brand, Mercedes began running an online community called Generation Benz in 2008, intended to bring younger consumers into the brand while giving Mercedes insights about the 20-somethings. The site, at www.GenerationBenz.com is an invitation-only forum by which the company mines the Gen-Y attitudes, lifestyle and brand preferences.

    Among the insights to date, Mercedes dealers were treating younger people who came into the showrooms like they had bed-bugs, especially if they didn't have their shirts tucked in. The company has dialed in better communication and customer handling skills into dealer and sales-associate training.

    Does all this mean that automakers are wrong to obsess over younger buyers. "Not at all," says independent marketing consultant Dennis Keene. "The economy is doing a slow climb, and those people will come in to the market. Besides, you can always sell a so-called 'young car' to an older buyer, but the only way a young person wants an 'old' person's car is if their parents give it to them for free."

    Quick Shopping Tools:

    Research New Cars

    Cars for Sale in Your Area

    Get Repair Estimates

     
    Discuss
    1 - 20 of 259 Comments
    Hollatesting Dec 15, 2010 4:35 AM
    very nice article
    Report This
    kraut2012 Dec 10, 2010 9:27 PM
    I TEST DROVE A FIESTA AT THE AUTO SHOW IN LAS VEGAS IN NOVEMBER 2009 AND I LIKED IT VERY MUCH. THE FORD REP. TOLD ME THAT THE CAR WAS BUILT IN GERMANY BUT THAT THE ONES TO BE SOLD IN THE U. S. IN 2010 WOULD BE QUITE SIMULAR. HE LIED!!!!! IN OCTOBER 2010 I TEST DROVE A FIESTA AT A LOCAL FORD DEALER AND SOON DISCOVERED THAT IT WAS NOT THE SAME CAR.!!! THE GERMAN MODEL HAD GET UP AND GO ; PEP. IT HANDLED WELL AND REMINDED ME OF MY 1967 MUSTANG AS IT CORNERED. THE U.S. CAR HAS NO POWER AND WOULD HAVE TROUBLE PASSING A SCHOOL BUS ON A DOWN HILL GRADE IM SURE. IT FLOATS THRU TURNS AND YOU ARN'T SURE WHAT THE FRONT WHEELS ARE DOING AS THERE IS NO ROAD FEEL. I DON'T EXPECT IT TO RIVAL A MUSTANG BUT ATLEAST GIVE US A CAR , A CAR THAT CAN BE DRIVEN AS WE AMERICANS LIKE TOO. WHAT YOU SEEM TO NOW HAVE IS A RECREATION OF THE PINTO IN A DIFFERENT SKIN (THO UGLY JUST THE SAME). I JUST HOPE THAT THE FIESTA DOESN'T BLOW UP WHEN HIT FROM BEHIND. FOR THE RECORD ; I AM A 68 YEAR OLD MALE AND A LIFE LONG FORD MAN. YOU LIED TO US FORD!!! SHAME ON YOU.
    Report This
    sonyfan13 Dec 10, 2010 6:29 PM
    moody61552 said: "armyaafa needs to remember that Chrysler is a corporate partner with Mitsubishi. (In fact, my wife's Dodge Caravan had Mitsubishi parts.) Mitsubishi made the Zero, the original "harbor bomber" (and strafer)." ---- And you need to remember that the Japanese lost World War II and that Mitsubishi of today is not the same company that it was back in 1941. Yes, learn and understand history and take heart of the lessons it offers. However, you mustn't obsess over it to the point where you hold an unreasonable grudge with a desire to strike at an enemy that hasn't existed since 1945.
    Report This
    sonyfan13 Dec 10, 2010 6:19 PM
    I own and drive a 2005 GMC Envoy. Yes, an SUV. Was it my choice? No. It was an inheritance when the relatives that owned it passed away. Much to the chagrin of people who hate SUVs, I do not have any plans to get rid of it because what I spend in gas I make up for it with the fact that I can trust it to be reliable, it is fully paid for and insurance rates are not expensive for this vehicle considering where I live, my driving record, the age of the vehicle and that I only have liability insurance. A vehicle, like the Ford Fiesta, costs about twice what my GMC is worth in the used car market. I would not get much for it in trade, either, and I don't have enough cash to pay the rest of it. That would leave me to buy a new vehicle through credit, which I refuse to do given the current financial and employment situation. What I may save in gas with a Fiesta over an Envoy I will lose in interest, depreciation and the cost to satisfy the requirement of comprehensive insurance coverage on a vehicle that's technically the property of the finance company until the balance of the car loan is satisfied. Of course, someone will ask me to get a used Honda Civic, but the problem is still that the trade-in still won't cover the full cost and I would still have to go with credit to cover the difference and everything that goes with it. So, I still have my GMC because I can't afford to go with something else.
    Report This
    cte901 Dec 10, 2010 12:35 AM
    A big part of the problem w/ the Fiesta is the PRICE! It starts (reasonably well-equipped) at about $18K (plus tax, tags, and title -- thankyouverymuch) and it's *more* if you want all the goodies, like their novel, yet useful SYNC system for hands-free phone/music. When the Focus ZX3 came out in 2000 it was about $4K less expensive for about the same equipment (although tire pressure monitoring and stability control are *mandatory* now; something not available on the Focus). Plus, you got another 18 inches of vehicle! The Focus ZX3 (no longer made as it would directly compete w/ the Fiesta) was versatile, almost stationwagon-like and considered a "compact" ... the Fiesta, @ $4K MORE, is a SUB-compact. The college student targeted for this vehicle wouldn't be able to get his/her typical two-weeks worth of LAUNDRY in this car, let alone move the half-ton of IKEA furntiure their parents bought them to organize the typical 10X12 dorm room. From a practical stand point, this car is NOT -- the mileage isn't even that good FGS; from a stylistic point of view ... well ... it looks kinda cool in metallic light green, but that's not saying much. Ford? Make it as versatile and practical as the Honda FIT ... and you've GOT something.
    Report This
    thefern63 Dec 10, 2010 12:20 AM
    the fiesta is ugly and the name is a joke!!!,not enough younger kids are gonna buy it because theres not enough of them working with this crap economy right now,last time i went into the ford dealer to buy a car,the salesman was arrogant and did'nt care,never will i buy a ford car again!!!!!!
    Report This
    idelia412 Dec 09, 2010 10:25 PM
    There are no buyers because the car is PURE UGLY!!!!!!! Where are the designers, or better yet who are the designers? Do they alway try to make ugly cars?
    Report This
    dtkid Dec 09, 2010 9:56 PM
    This car doesn't stand out. Especially when it's priced the same as so MANY other cars in the same segment. Some say it's got great features. Well, yeah once you option it up! Then it's no longer a "cheap" car. If these "extra" features came STANDARD with the base model, THEN it would stand out and they'd have great sales.
    Report This
    dlangel713 Dec 09, 2010 9:31 PM
    FIESTA OF ALL THE NAMES TO PICK AND THAT LIME GREEN MAKES ME SICK THE FIESTA IS AN OLDDDD NAME FROM THE PAST WHICH DID NOT HAVE A GOOD TRACK RECORD
    Report This
    caseywho1 Dec 09, 2010 9:28 PM
    If you want a successful entry-level car: 1) Make it cheaper. If you want it "flying off the lots" sell it at a price people can't pass up -- like $6995. 2) Many states ban tinting the front side windows. Many of us appreciate our privacy. Accordingly, we don't like huge side windows that "sweep back to convey the impression of motion". That's an old design trick that's simply old. Small, compact side windows help preserve privacy if you cannot tint them.
    Report This
    moody61552 Dec 09, 2010 9:28 PM
    armyaafa needs to remember that Chrysler is a corporate partner with Mitsubishi. (In fact, my wife's Dodge Caravan had Mitsubishi parts.) Mitsubishi made the Zero, the original "harbor bomber" (and strafer). I had a 1980 Ford Fiesta; it was made by Ford Motor Works of Bavaria. It was a wonderful little car, much more reliable than the Caravan, and tremendous fun to drive. That Fiesta had a really quick 4 cylinder engine, and it only came with a 4 speed manual transmission. If I were in the market for a small car today, I'd look seriously at the new Fiesta (even though I'm 60 not 16).
    Report This
    ladyazul7 Dec 09, 2010 9:16 PM
    I would consider this car if I was going to buy a car, but that UGLY GREEN color does not make me interested in even looking at other colors, Not to mention the name "FIESTA" I'm fluent in spanish, and that name is ugly for a car.... A white man must of named it. When they ask me "What do you drive? I don't want to say "I drive a Fiesta" uuu.. ugly
    Report This
    rndoll21 Dec 09, 2010 9:12 PM
    I am 65 years old and I own the ford fiesta. All I can say is that I love it, love it, love it. Oh, it's great on gas.
    Report This
    heybrockj Dec 09, 2010 9:05 PM
    In purchasing a new vehicle for my teenage daughter, I could'nt get my daughter to even look at a Ford. Sadly I bought a mazda (no problems). I say sadly, because I have had great service (over 200k trouble free miles) on 2 Taurses and now drive a Jag( Ford again) 187k miles! The problem is she just did'nt like the way they looked. Sorry, Ford. Thank you Ford for the great service, and yes my next car will be a Ford!
    Report This
    armyaafa Dec 09, 2010 8:57 PM
    Hey bimotarich -- maybe the Illegal Aliens will buy them,, when they feel Homesick LOL
    Report This
    armyaafa Dec 09, 2010 8:56 PM
    ALL the automakers here,, except Chrysler have screwed the Public with junk! Buy the Fiesta,, it has a cool name,,, another junk like the Escort, or Pinto! They need to builld cars that last, go 200,000 miles without a problem, and have bodies that will not rust or paint falling off....... The American manufacturer needs to go back to the Basics - building QUALITY, affordable, problem free cars. Screw the bean counters $$$$ driven outlook,, they have gotten these Companies in a mindset that is incorrect, and have allowed the Harbor Bombers to WIN the automotive War
    Report This
    bimotarich Dec 09, 2010 8:54 PM
    I think ford should have come with a new name to go along with the new design. Fiesta just doesnt make for a cool car name... It sounds more like a POV porn name than car name... I doubt many people young or old want to say "fiesta" when some one asks them what they drive... its got no sex appeal... no street cred... and no sales...
    Report This
    ehls2 Dec 09, 2010 8:50 PM
    The prices on new cars is sky high so anybody with any brains in any demo should opt out and buy used.
    Report This
    armyaafa Dec 09, 2010 8:48 PM
    Student Loans have strapped these poor kids,, because of their useless Parents that never saved a dime for them..........
    Report This
    tgfurry Dec 09, 2010 8:47 PM
    The car buyier's are here , most new car's and truck's are way over priced and most of us out here will not pay that high price now or later on. By the way I sold new Ford's years ago and the price's were fair then. The new trick the dealer's are doing is over pricing the USED car's & Truck's so you will buy a new CAR or Truck. Let them go under that will get the price's back down.
    Report This
    1 - 20 of 259 Comments
     
    Leave A Comment?
    Please keep your comments relevant to the Youth Cars Are Everywhere, But Where Are The Buyers? article.
    Carmakers have an ever-expanding lineup of products aimed at youth, but high unemployment rates among younger car buyers means that many of these vehicles will not be purchased by them.
    ABUSE REPORT

    From:

    Your Comment:
    Send Report Cancel