Automakers Panic As Gen Y Abandons The Automotive Dream

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Detroit’s year of bad news just got worse: the car industry isn’t only losing sales from current buyers depressed by the economy — it’s losing the future.

A new J.D. Power report says teens and twenty-somethings lack what was once thought to be the genetic desire to own a car.

The study, which analyzed hundreds of thousands of conversations on blogs and social media sites like Facebook and Twitter, showed young people have a poor image of the auto industry. The bad economy and high gas prices could be to blame. But J.D. Power blames social media itself: “with the advent of social media and other forms of electronic communities, teens perceive less of a need to physically congregate, and less of a need for a mode of transportation.”

Of course, research done among social media diehards that finds social media is more popular than driving may be suffering from an echo-chamber effect. People chained to Facebook and Twitter may indeed be too busy to go out. But the trend is real, and has been building: The New York Times reported last year that fewer 16-year-olds now rush to get their licenses as soon as they’re eligible.[more]

Kia is trying to reach this key demographic through the tried-and-true car-sales tactic of rock ‘n’ roll. The Kia Soul is a new line of basic, inexpensive cars (starting at $14,000) targeted at college students and twenty-somethings. But it’s not a cheap Hyundai, mind you, it’s “hip” – just ask the cute hamsters in Kia’s “A New Way to Roll” commercial. A Soul test-drive earns you a free ticket to Kia’s “Collective Soul” festival – a series of indie-rock concerts and art installations across the U.S. featuring bands like MGMT and Santigold. Soul sales have being doing well.

Kia isn’t the only car currently resorting to music as a means to reach young consumers. The Toyota Scion, outfitted with Scion-branded mix CDs, is branded as a music lover’s car, although not necessarily a Gen-Y music lover’s car, based on Toyota’s selections. Honda, on the other hand, is trying to reach the 25-49 age group with a documentary series on innovation and creativity, “Dream the Impossible,” which launched online in January. The site’s traffic has increased tenfold, but its correlation to sales has yet to be determined.

If these strategies fail, auto brands can still find an encouraging market in China, where car sales are rising and the youthful dream of shrugging off all responsibilities to go on a soul-searching joyride is alive and well.

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