Arguably, Ford is leading the U.S. auto industry when it comes to understanding the behavior and buying preferences of the Millennial generation. That’s one big reason Ford was able to steal a march on all of its competitors with the Sync infotainment system — by making it available in the first place, to work with most smart phones, and then by promoting it heavily as a must-have “accessory” in small vehicles aimed at twentysomethings, including the Focus and Fiesta.
That obviously is the type of insight also underlying a deal with Zipcar that Ford announced today (a deal previewed in the New York Times). Just in time for back to school, Ford will supply the car-sharing service with up to 1,000 Focus sedans and Explorer SUVs to Zipcar locations on 250 college and university campuses in the United States.[more]
It’s not surprising that Ford executives also appear to be leading their rivals when it comes to a related pursuit: worrying about whether the Millennials that they are so arduously courting are actually going to buy more cars.
Despite Ford’s singular success in picking up market share among this generation, at least three trends make the brain trust at Ford concerned about Millennials’ buying plans: the economy, the generation’s attitudes toward cars and driving, and their penchant for borrowing instead of buying things, which helped lead to the Zipcar test.
For one thing, Millennials demonstrate decidedly less enthusiasm than their parents, the boomer generation, and even than the subsequent Generation X, about owning a vehicle or even driving one. That ancient rite of passage for American youths, getting a driver’s license, isn’t such a Kodak moment for them, it turns out. While half of 16-year-olds got a driver’s license in 1978, less than one-third do now, thanks to factors such as tougher driving standards, higher costs for driver training — and teenage indifference.
“You’re always going to have driving enthusiasts,” Sheryl Connelly, Ford’s manager of global trends and futuring, told brandchannel. “Boomers kind of made the car an iconic symbol of freedom and independence, and so for at least the next couple of generations, I don’t see that disappearing. But there are many Millennials who are more interested in mere mobility than actual driving dynamics,” she noted. And, of course, many of that generation are far more interested in digital connectivity and devices than in engines and automobiles.
Another tendency of Millennials, Connelly noted in an interview with MediaPost, is their interest in “access over ownership” — a willingness to rent or borrow just about anything rather than necessarily having to buy a “toy,” whether it’s jewelry, bikes, handbags or cars. (Or music.) That’s why the biggest enthusiasts of car-sharing services such as Zipcar are twenty-somethings. Ford hopes to overcome this aspect of the Millennial psychographic by exposing them to its cars in the Zipcar deal, enticing them to become customers eventually. But another aspect of this attitude is that it’s not so crucially important for Millennials to buy that first car for themselves.
Scott Griffith, chairman and CEO, Zipcar, said in a statement that the partnership will help Ford and Zipcar prepare the next generation of drivers for the future of urban transportation while helping the companies better understand the unique preferences of the college-age segment of the driving population. Zipcar has partnerships with more than 250 universities throughout North America, including Harvard University, Yale University, Massachusetts Institute of Technology, Stanford University, the University of Southern California, the University of California – Berkeley, Loyola Marymount University, Florida State University, the University of Michigan, Michigan State University and George Washington University, among others.
“We’ve had Zipcars on campuses for more than eight years and as a result we’ve learned a lot from the next generation of drivers. We’re targeting a generation that only knows how to buy music by the song so paying for a car by the hour is a natural for them. Students are smart consumers who appreciate Zipcar’s ‘Wheels when you want them’ approach,” said Griffith. “We believe this alliance will drive home the value of using Zipcar and the fun of driving a Ford when students need a ride. With reduced membership fees and hourly rates sponsored by Ford, they can save even more money on sustainable transportation, without sacrificing the freedom – and fun – of having a car on campus.”
To celebrate the co-branding deal, Zipcar’s Facebook college marketing effort, Zipcar U, is inviting folks to name a new Ford Focus Zipcar (suggestions must begin with the letter ‘F’). Fun aside, in the short term, the most troubling trend regarding Millennials, and for selling them autos, is the moribund economy.
The Great Recession and the continuing stubborness of high unemployment rates have thwarted intentions of many Millennials to launch their careers, start families, even to gain financial independence from their Boomer parents. These frustrated twentysomethings aren’t in the mood or mode to be buying or leasing cars, even if they are tricked-out Fiestas or a Focus that feels like a media lab to them.
So while it’s great to be young at heart, it’s not so great to be young in the pocketbook. And Ford, Zipcar and the rest of the auto industry are grappling with that truth.