Automotive News Canada - June 2024 - 16

16
* JUNE 2024
Lost youth?
Automakers acknowledge that affordability
is an issue, but what are they doing to get
young buyers interested in their vehicles?
By DAVID KENNEDY
TORONTO BUREAU CHIEF
BUYERS 35 AND UNDER ACCOUNT
for a smaller portion of new-vehicle sales
in Canada than they did five years ago,
but automakers
are playing the
long game with
today's cashstrapped
younger
customers.
Cost is what's
really holding
buyers back,
said Aamir
Ahmed, head
of Fiat North
CONNECTING
WITH
YOUNGER
BUYERS
PART
TWO
OF A
TWO-PART
SERIES
America, though alternatives to traditional
vehicle ownership such as short-term
rentals or Uber also represent competition
" to some degree. "
" A lot of it comes down to affordability,
if we're being honest, especially in this
hyperinflation age that we're in, " Ahmed
told Automotive News Canada. " Just like
the home market was
years ago, people are
being costed out. "
Current economic conditions
seem to be hitting
young Canadians harder,
said Cyril Dimitris,
vice-president of sales
and marketing at Toyota
Canada. Against this
backdrop, it's " not a big
surprise " that younger
buyers are dropping off,
he said.
Canadians 35 and
under accounted for 21
per cent of new-vehicle
buyers in 2023, down
from 25 per cent before
the onset of the COVID19
pandemic in March
2020, according to data
from J.D. Power.
The rapid run-up in
vehicle prices over the
past few years - amplified
by the discontinuation
of numerous lower-priced
vehicles and
entry-level trims -
and the wider affordability
challenges that
Canadians face have
forced some would-be
new-car buyers into the
used market and put others
onto the sidelines,
said Robert Karwel,
senior manager of J.D.
Power's Canadian automotive
practice.
COST MATTERS; FUN, TOO
Getting young buyers
into showrooms in this
environment starts with
an affordable and attractive
product portfolio,
Dimitris said.
A lot of it comes
down to aff ordability,
if we're being honest,
especially in this
hyperinfl ation age
that we're in. Just like
the home market was
years ago, people are
being costed out. "
Aamir Ahmed
Fiat North America
buyers see as " fun to drive " as well as
playing up components of affordability
that are commonly overlooked.
" The price and the rate and the monthly
payment is one aspect of affordability,
but then there's being able to retain the
value of your vehicle [and] reducing your
servicing cost, " Dimitris said.
Still, the Corolla, the brand's least-expensive
vehicle in Canada, is priced in
the high-$20,000 range including delivery
charges.
Ahmed:
Although
there are
transportation
alternatives
to vehicle
ownership,
the sticker
shock is the
main reason
that young
customers
aren't buying.
FILE PHOTO
Once the company puts a buyer in a
Toyota, the long-term
goal is to retain that customer
as well as move
that person up the product
portfolio and potentially
into luxury offshoot
Lexus with successive
purchases.
It's a common playbook.
Hearn:
As
well as
making
vehicles
that younger
consumers
can afford,
Nissan is
reaching that
demographic
group by
emphasizing
social
media in its
Dimitris:
Toyota is
making
vehicles " fun
to drive "
as well as
affordable,
in terms of
the purchase
price, the
cost to
service and
the vehicle's
resale value.
FILE PHOTO
For several years, he said, Toyota has
been appealing to the younger demographic.
This has included repositioning
the lineup to include vehicles that more
marketing.
FILE PHOTO
Nissan Canada has
been " leaning into " the
market for some time
with a portfolio that
lends itself well to the
younger demographic,
said company Marketing
Director Ken Hearn.
" We're one of the
only OEMs with a product
that starts under
$23,000, " he said, pointing
to the Versa sedan,
which has a sticker
price of $23,201 including
$1,850 for delivery.
Nissan also offers the
Kicks and Sentra with starting prices just
over $25,000, including delivery.
To sweeten the deal for new postsecondary-school
grads, Nissan also offers $500
off its three lowest-cost models and up to
$2,000 off vehicles in its wider lineup.
The aim, Hearn said, is to get young
buyers hooked on the Nissan and Infiniti
product lineups for life.
Other vehicles in this price range
include the Chevrolet Trax subcompact
utility vehicle - the brand's least expensive
offering - at $24,570 including $2,000
destination charges. A $500 bonus is available
for students or recent graduates,
according to the company's website.
PHOTOS: AUTOMAKERS
SELLING WITH SOCIAL
ing.
Nissan has also reworked its market " Over
the past 12 months, we completely
overhauled our whole social media
strategy, " reallocating resources to ensure
that Nissan has the staff to handle the
added attention to its variety of channels,
Hearn said.
That includes a page that allows the
company to create animated gifs and
stickers, as well as campaigns with
social-media-driven creators and influencers
such as AsapScience and Supercar
Blondie to connect with younger buyers
in new arenas. The move, Hearn said,
has boosted engagement across Nissan's
social media channels by 10 per cent year
over year.
Not all brands take the same
broad-market approach.
Fiat began deliveries of the electric 500e
in Canada in May. The modern take on
the city car known as the Cinquecento -
500 in Italian - is " designed to be either
your first car or your first EV, " Fiat head
Ahmed said. But as opposed to a broad
swath of the population, recent grads or
young professionals in urban centres
make up the target market.
The 500e subcompact will be available
in British Columbia and Quebec to start,
with buyers in Vancouver and Montreal
the key focus, Ahmed said. The 500e has
a sticker price of $42,190, including $2,095
delivery. With federal and provincial EV
rebates, however, the starting price drops
to $31,753 in Quebec and $34,155 in British
Columbia.
" There aren't many affordable vehicles
in Canada, but there's also not that many
vehicles with this much charisma and
charm that are an EV, " Ahmed said.
While most brands look to direct customers
upward in their lineups after first
putting them in an affordable vehicle, Fiat
is taking a different approach, given its
limited Canadian product offering - just
the 500X and now the 500e.
The brand's shared showrooms mean
that 500e customers can cross-shop with
other Stellantis brands, Ahmed said. The
SEE PERFORMANCE PAGE 18
STARTING
PRICES
Toyota GR86
$35,340
Chevrolet Trax
$24,570
Fiat 500e
$42,190
Before government
rebates
Nissan Versa
$23,201
Acura Integra
$42,601
Automotive News Canada - June 2024

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