In a comment earlier today, Duncan referenced a New York Times article about recent cuts and closures in the publishing industry. It includes a quote from big-brained thinker Clay Shirky:
Historically, people took an interest in the daily paper about the time they bought a home. Now they are checking their BlackBerrys for alerts about mortgage rates.
“The auto industry and the print industry have essentially the same problem,” said Clay Shirky, the author of “Here Comes Everybody.” “The older customers like the older products and the new customers like the new ones.”
I know very little about the auto industry. What sort of products–that is, what kind of vehicles–do the auto industry’s new customers want?
public transportation, more fuel efficient vehicles, not a new car when you just lost your job….
I think younger car buyers are looking for a few characteristics that the supply chain and marketing departments for car manufacturers can’t / won’t provide right now:
* hackability / individuality: the tuner culture shows how much people use their cars as symbols of identity, customizing them with aftermarket parts and modifications. Yet these mods, except in cosmetics areas, almost always void warranties and are bought from outside the manufacturers.
* fuel efficiency / environmental friendliness: hybrids and electric cars have taken off but they’re so far mostly for status symbols for easing commuters’ consciences, not for utility, frugality and practicality. I think radically rethinking individual and group transportation is needed to find any innovation in this space. Old people aren’t ready for it, young people are on the cusp.
* boutique brands: small-supply, imported vehicles are showing up on the roads because people are taking the initiative and importing them. The big car manufacturers
Basically both the publishing industry and the auto industry are caught in competence traps. They’re good at a business that they can see eroding. But the new businesses that might replace the eroding ones threaten them too. So far the vested interests trump the innovators.
* boutique brands: small-supply, imported vehicles are showing up on the roads because people are taking the initiative and importing them. The big car manufacturers are vertically integrated organizations that close off the market to this interlopers but also close themselves off from these market opportunities.
I think James put his finger on some key differentiators, and compactness is another important one. Older generations come from a culture where bigger is better in terms of utility, status symbol and safety. Younger generations are more likely to appreciate compactness along a different set of values.
He might also be referring to manufacturers. When I was young and visiting my grandparents in the States, no one would consider a non-American car. They weren’t so much being loyal to US cars, but rather to them the other major choices were made by the “Japs” and the Germans, which were people they had fought a war against. Quality and reliablity wasn’t enough to sway their purchasing decisions.
Once I was in my teens and early 20’s, when driving my Honda down there, I would barely ever see matching cars on the road. However, as the that population has aged and new generations have reached adulthood, I see a much greater mix of vehicles on the American roads. And the current issues in the auto industry can be summed up as the American dealerships have lost major portions of their market share to the foreign manufacturers.
I agree with Gregg. I’ve written about this several times over the past few years. I was mystified, for example, when my in-laws bought two relatively crappy GM cars in 2005, brand new: an Oldsmobile and a Buick.
I don’t know anyone in my peer group who would even consider one of those two brands (Olds is gone now anyway, probably for that reason). My friends’ first choices tend to be Japanese and Korean brands, and maybe European, before any of the Detroit Three.
In general, I find the people I know far less brand loyal than previous generations. Would anyone today diss Dodge in favour of Plymouth? People used to, even though they were both Chrysler nameplates. But we own a Ford Focus wagon (wonderful for cargo, not super-reliable), and that had no influence at all on our buying a Toyota Echo sedan later (much better reliability, by the way).
I can’t even imagine buying an American car. I only look at Asian brands and perhaps European ones. But, even then, my husband and I recently evaluated minivans and crossover vehicles…and decided to buy roof racks and a cargo box instead. We’ve got just as much storage as a minivan provides, although not quite as much seating. But we can just car share or rent a car if we really need to haul 6 people. For our family of four, our 9-year-old Honda Civic does just fine. We only drive 3,000 km a year anyway, since we live downtown. So perhaps it’s those sorts of choices that are influencing young buyers’ decisions. If I’m still a young buyer, that is.
I saw an ad on a US TV station today that asked if you (the viewer) “Suffered from Importitis”? It explained that this was the “Irrational belief that import cars were better than domestic ones.” Then, astonishingly, the ad said nothing to substantiate the claim, instead going right to a breathy sales pitch for the new Chevrolet Malibu.
This is how GM is going to save itself from bankruptcy? To convince Gen X and Gen Y to stop abandoning it for import cars that are better designed, more green, and of superior value? Sheesh. Ya just gotta shake your head.
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