American-made cars prove popular with millennials
Rob Golden, a Los Angeles-based writer, can’t recall the last time he owned an American car, “unless it’s the Chevy my parents drove when we moved to California when I was 10.”
But when Golden's son, Daniel, 23, was looking for a new car, he opted for a Ford Fiesta, despite his father’s suggestion that he buy a Toyota Camry or Corolla.
“I just think it’s cooler looking and a lot more fun to drive,” Daniel said.
The Golden family isn’t alone. Baby Boomers shifted their loyalty to foreign carmakers over the last four decades. But studies show that their children – the so-called millennial generation – favor American-made cars.
"U.S. automakers have burst onto the scene in recent years with small, fuel-efficient and affordable cars that really appeal to a young set of buyers," says Edmunds.com Senior Analyst Jessica Caldwell.
The data show that Japanese makers have seen their share among 18- to 24-year-olds decline by 9.8 percent since 2008. At the same time, domestic brands have increased 1.9 percent.
Popular models include the new subcompact Chevrolet Spark Sonic, Compact Ford Focus and Midsize Ford Fusion, as well as the compact crossovers like the Chevrolet Equinox and Ford Escape.
Ford refers to these four segments as one “super-segment,” accounting for about 50 percent of current sales in the U.S. new vehicle market, up from 35 percent in 2004.
These were segments “where we needed to grow,” says Amy Marentic, a senior marketing manager for Ford Motor Co., “or we were going to continue losing market share.”
The Detroit makers aren’t the only brands tracking young buyers. Toyota created Scion specifically for this generation. It scored some successes with the now older Gen-X but while Scion still claims to have the youngest buyers, on average, of any brand in the U.S. market, it has been struggling to maintain sales.
As for why, those in the industry aren’t sure. Scion hasn’t matched the quality of its bigger parent, Toyota. Also, independent studies by research firms such as J.D. Power and Associates have found that while overall quality of new vehicles has improved almost every year, domestic makers continue to close the gap.
Detroit has aggressively pushed new technology, such as the Ford Sync and Chevy MyLink infotainment systems that appeal to younger car buyers. They’ve also put a premium on edgy designs, such as the well-received new Ford Fusion.
Detroit’s Big Three are hopeful they can take advantage of the latest trends, but understanding the millennial generation isn’t easy, admits Ford’s Marentic, although she said Ford is having some success “cracking the code.”
Detroit makers aren’t the only ones hoping to benefit at Japan’s expense, stresses Edmunds Editor Caldwell. So are South Korean brands.
“Not only are the Koreans making better cars for young people, but they've also worked to make credit available to young buyers who still don't have solid credit history," Marentic said.
But so is Ford, says Marentec, noting the company’s programs for college grads. Ford is also working up a discount program for “Zipsters” – typically younger users of the car-sharing service ZipCar popular on college campuses and in urban markets where parking a car can be tricky.
Ford has tried to benefit by partnering with ZipCar. Ford sales analyst Eric Merkel said the thinking is that most Americans end up buying a car. If ZipCar users liked the vehicle they rented, they may favor that brand when it’s time to buy.
If Merkel is right, Ford – and the domestics as a whole – may continue gaining ground with the newest generation of car buyers.
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