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Memo to GM: Give Young Car Buyers What They Want

5 years ago
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What kinds of cars do young people buy? Hondas, Volkswagens, Scions, Toyotas, and even Minis may come to mind. GM brands probably don't.

GM doesn't seem to be able to grasp the idea of what, stylistically, young adults are looking for.

Let's start off by examining the possible GM brands that could appeal to the younger crowd. Saturn, Saab, Pontiac, and Chevy all come to mind: Saturn with its affordability, Saab with its cool "born from jets" sports car look (although perhaps a bit out of the average young adult's price range), Pontiac with the old muscle car mystique, and Chevy trying to be a combination of all of the above. The problem is, Pontiac's final year is scheduled for 2010, and Saab and Saturn are being restructured or sold by GM. Hummer is supposedly ready to be sold to a Chinese company soon, though that brand lost its cachet several years (and many gallons of fuel) ago.

This leaves GM with Chevy/GMC to appeal to younger people (and GMC is more of an afterthought since it almost exclusively makes trucks, vans and SUVs). Young people aren't buying Cadillacs and they certainly aren't buying Buicks. So, can Chevy hold up to the pressure? Can it move from surviving to thriving among car buyers of the future? Looking at the way other car companies operate, it doesn't look good for the new GM.

Honda and Toyota have tiered systems for their brands. Honda has Honda and Acura, the former geared toward the middle class and the younger generation, while the latter focuses mainly on more affluent drivers.

Toyota manages to do this to an even greater extent. Its three brands of Lexus, Toyota and Scion do this with such precision that it's no wonder Toyota is first in the world in car sales (recently surpassing GM). Scion's cool commercials might not make sense to the older crowd looking for a more luxurious car, but the Lexus Christmas commercial, for example, resonates with older markets. GM marketing at the moment nowhere approaches this level of genius.

GM has decided to sell off or discontinue brands that lose the most money, which sounds like a good business decision. But, if it actually gets rid of the brands being considered, the new GM is going to be very top-heavy. Buick and Cadillac are competing for the same customers, while GMC is selling trucks/SUV's, and Chevy really doesn't seem to know who its target customer really is. GM may continue to overhaul its brand structure, particularly in new markets like China, but it will risk confusion and stagnation elsewhere.

The Chevy brand among young people doesn't have the name recognition or the image that Honda and Toyota have (there are still Corvette and Camaro sports cars, of course, but those won't fly off lots in this economy.) The new GM is going to have to decide what kind of brand it wants Chevy to be. The company is going to have to adapt to the new world of auto manufacturing if it wants to compete with the Scions and the Hondas of the world for the love of young people.

There was a glimmer of hope when the Chevy Volt, a stylish electric car, was introduced. Although the Volt might be in a higher price range, the car signifies the GM of the future that people are hoping for. While GM has been working to get on track, other electric car companies have been leapfrogging and making for a very crowded market.

Young adults love the idea of saving the environment and getting better gas mileage, but they are not going to sacrifice features like a great stereo system or face a price hike when they can get a lower price or more features in a comparable class of car from different brands. As GM works to implement and perfect production of new lines, it risks being undercut by more agile competitors.

Young people aren't like most other Americans looking for a car, and that's something that GM execs and designers have seemed to ignore of late. Style, affordability, a few flashy features, and an increasing focus on the environment are all key for the next generation of car buyers. If the new GM is going to attempt to structure itself like Toyota and Honda, company designers and executives are going to have to start thinking like Toyota and Honda. From what I've seen lately from GM, they still don't get it.
Filed Under: The Cram
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