With two of every five car buyers coming from Generation Y, Toyota is recognizing the importance of appealing to America’s next wave of car buyers and the vastly different tastes they carry.
“Bottom line: consumers always have … and always will, dictate the market and younger consumers will drive the market in the future,” said Jim Lentz, CEO of Toyota North America motor sales during the 2012 Center for Automotive Research (CAR) Management Briefing Seminar.
It was part of a speech where he explained how the company will shift to create more interest in its products for buyers born between 1980 and 1998: the “Millenials.”
Perhaps a more colloquial way of portraying Toyota’s future brand strategy would be to describe it as letting customers have their cake and eat it too. Lentz highlighted selling points like increased technology integration in new cars, eco-friendly transportation, a fun driving experience all with low costs to both buy and maintain a car as areas buyers in that segment value most.
Unfortunately for Toyota and every other automaker, every year makes it more obvious that Gen Y’ers don’t care about cars the way their parents did. Where baby boomers saw driving as a freedom, Millennials look at cars like financial shackles.
Then again, it’s often hard to find fault with that mentality. The economy is tanking and gas has never been so expensive. Insurance isn’t cheap, and to make matters worse college tuition costs at a public institution have doubled over the last 15 years. Would it be appealing to jump another $20,000 in debt if that were you?
Unsurprisingly, more Gen Y buyers prefer hybrids over traditional gas-powered cars. They don’t hurt at the pump and promote eco-friendly habits. What’s more, car companies are jumping on the hybrid band wagon faster than the “dislikes” piled up for Rebecca Black’s “Friday” music video on YouTube.
Those preferences all add up to a lot of what Toyota is already doing. Its family of Prius vehicles offers fuel mileage, relatively low cost with the Prius C and technology integration, though at the cost of driving fun. Then again, the Scion FR-S offers fun, and a low purchase price, though at the cost of super-high mileage and truckloads of tech features.
Still, the fact that Toyota is already sizing up what will arguably be the automotive industry’s biggest hurdle suggests that the future is bright, something Lentz is sure of.
“By listening closely to them and teaming together as automakers and suppliers, we can deliver the vehicles they want and drive a bright future for all of us,” he said.
Does that mean a hybrid FR-S? Definitely not, but it does mean that there will probably be a fun-to-drive hybrid that won’t cost more than someone living on an entry-level salary can reasonably afford in Toyota’s future.
The good news is, recent reports suggest Gen Y is slowly warming up to the idea of buying cars. It could be that the first waves are finally heaving the debt load, or maybe it’s the industry getting hip to their jive, but in either case the future isn’t totally bleak.
“They’re growing up and their priorities are changing. They’re starting jobs or families and need some sort of vehicle to get around,” Lentz said.