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May 21, 2012
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,2+$ %,--"/0 +1 " % By Ted Craig
Rush - Dated Material
Have young people given up on cars? Or has the car market given up on them? Studies show older consumers now make up a larger portion of car buyers than before the downturn. Much of this is due to a lack of jobs and credit, but others see a more significant shift. Much has been made lately of reports that young people are passing on buying cars, preferring to put that money into the latest smartphone and take public transportation. George Hoffer, an economics professor at the University of Richmond, sees his students still buying cars, but with less enthusiasm. “This generation looks at a car as a means of doing rather than making a statement,� Hoffer said. “Young males in particular have much less interest in automobiles.� What does excite these students is electronics. To the extent they get excited about autos, it is about the electronic features. Hoffer said they seem interested in buying the ac-
Illustration by Joe Schlaud
cessory and will take the car that comes with it, rather than the other way around. He blames the increasing blandness of today’s offerings from the major manufacturers. Joe Lescota, who just retired as chairman of automotive marketing at Northwood University, disagrees. “There’s still the magic of getting behind the wheel,� said Lescota, who now heads training for the National Independent Automobile Dealers Association. He said people may talk about going green, but the high-occupancy vehicle lanes in most states remain mostly empty. “We love the independence of a car,� Lescota said. The main issue is a lack of jobs for young people. With unemployment for 18 to 29
year olds still in double digits, many have nowhere to go and no way to make car payments. Brent Carmichael, a consultant with NCM Associates Inc., said the contracts for consumers under the age of 25 have always performed poorly. Carmichael said tighter credit standards mean those buyers are being passed over. Steve Hall, president of Driversselect, still sells plenty of vehicles to young people with bad credit. He said it seems like there
are fewer young people shopping for cars because they do more of their research online. “Dealers aren’t seeing them in their showrooms,� Hall said. This requires a different marketing approach than most dealers usually take, he said. It means focusing more on image than action. Young buyers are more socially conscious and less image conscious, Hall said. Driversselect runs many “social responsibility initiatives,� such as donating old-
er computers to a woman’s shelter and supporting local education programs. Hoffer said some of the difference in attitude toward automobiles falls along economic lines. He said students at the public university he used to teach at, Virginia Commonwealth University, were more interested in cars than the students at private Richmond. So, the lack of image concern and the lower economic levels could mean an advantage for used cars in the future.
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