Although young adults never represented a massive consumer portion for auto-makers, the amount of young people buying cars is on the decrease. Understandable, considering tuition is expensive, public transit is more developed, and insurance and gas costs much more. Students and graduates have far more on their plate these days, and as a result auto-makers are losing this customer segment. However, it is not as if young people aren’t interested in owning a vehicle. They still want to own a car, it’s just no longer practical.

http://www.theglobeandmail.com/globe-drive/culture/commuting/kids-today-millennials-want-wheels-but-balk-at-extra-costs/article20800617/

Most auto-companies are looking at ways to re-enter this customer segment. Some companies, such as GMC, offer rebates usually between 500$-1000$ or gas cards to help with initial ownership costs. GM is also considering producing new models that are cheaper but still aesthetic, such as the NSX Concept(cost roughly 20k):

http://www.wired.com/2012/01/acura-nsx-concept/

Ford is taking a different approach, testing its zipcar service to determine whether it is more appealing to young people who are unable to afford start up cost associated with buying a car. Similar to car2go, zipcar allows someone to essentially rent vehicles on demand.

Personally, I think strategies similar to Ford’s are the most appealing. Even at reduced cost, most students have a hard time coming up with the money to buy a car, and it is easily an avoidable expense with today’s public transit. Also, by making cars so much cheaper for students, companies lose significant revenue. Finally, zipcar and car2go use environmentally friendly vehicles, which allow the younger generation to be environmentally responsible without having to pay the high prices associated with hybrids or EVs. As far as selling cars to young people goes, I say simply wait until they reach an age where having a personally owned vehicle is more attractive and affordable.

Please feel free to comments; let me know whether auto companies should be concerned about their reducing customer segments, as well as your opinion on owning your own car.

Hello Everyone,

As stated in Freidman’s article, a business’s main goal is to make profit. However, the notion that this is a business’s sole responsibility and most guaranteed route to success may require some re-evaluation, according too Leah Eichler’s “Is doing good a sustainable business model“. This article can be found on The Globe and Mail, or by using this link:

http://www.theglobeandmail.com/report-on-business/careers/career-advice/life-at-work/good-vibes-for-social-responsibility/article14575293/

Friedman published his article in the 70’s, and although I do not deny the fact that profit is a business’s bottom line, Eichler’s article stresses that the modern world places much more emphasis on doing good and fulfilling social responsibilities. As a result, many present day businesses have been successful by incorporating strategies that fulfill social responsibility. These businesses actually make more profit than they would if they were to eliminate the costs of doing good. A perfect example would be the clothing company Ten Tree. Without their contribution to the environment, nothing would set them apart from the many other clothing brands, and as a result they would sell far less. Basically, the business model consisting of a strong emphasis on profit and social responsibility has much more opportunity to succeed than in the 70’s, due to the change in the general consumer’s values/morals.

Here is the link to the Dragons’ Den episode that Ten Tree debuted in. It is a perfect juxtaposition of the 70’s style of doing business and a more modern approach  due to the debate the Dragons’ enter concerning whether to support Ten Tree.

Ten Tree on Dragons’ Den:  https://www.youtube.com/watch?v=4oe8w998E00