While auto sales are surging and every major company is posting record profits for the year, which is shaping up to be one of the best ones ever for the auto industry, one demographic is proving a difficult nut to crack when it comes to buying new vehicles.
Young people, called millennials, are currently buying new cars at a pace far below that of their parents. Part of the reason is many of these individuals are facing a high level of student loan debt, which cuts into their disposable income. Additionally, with the vast majority of new jobs being created in the United States being part time, finances have become even more difficult for young people. They also face the daunting challenge of competing with older more experienced workers for the same jobs.
With such things in mind, it is understandable why these individuals would be reluctant to take on the added burden of a car payment, rather than continue to drive a used car. However, despite these daunting challenges, auto makers are refusing give up on these millennial drivers, reasoning that if they can get them now, brand loyalty will reap future dividends.
In order to attempt to persuade millennials to purchase new vehicles, auto manufacturers are attempting to attract the 18 to 34 year olds by reaching out to them through social media campaigns, video game placement and peer to peer advertising. Some have likened it to putting a Matchbox car in a box of breakfast cereal like companies used to do in years past.
“This audience is their future,” Michelle Krebs, a senior analyst at Edmunds.com told Auto News. “It’s absolutely critical that automakers try to get this market now.”
Nissan Motor Co. has already sponsored virtual versions of the Leaf electric car in the Sim City video games. In the game, the digital inhabitants of the city obtain higher “happiness” levels when they add a leaf or charging station to the cities, Vinay Shahani, Nissan’s U.S. director of marketing communications said.
General Motors has done a similar thing where it will be featuring vehicles in its SUV and Pickup truck line in Madden NFL 25 later this year. Among the featured vehicles is the 2014 GMC Sierra, which is one of the company’s biggest product launches of the year. Other vehicles include the Yukon and Terrain SUV’s as well as the Acadia crossover. Besides product placements, the GMC logo will also appear on stadium advertising and content during the game.
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