Do U.S. Carmakers Have a Chance With Young Drivers?

With General Motors following Chrysler into bankruptcy, finding new ways to appeal to younger buyers, who have been increasingly attracted to foreign brands in recent years, could be key to GM's continued existence.

Though many foreign brands have the edge when offering price, style and performance — top concerns among young buyers — Gen Y hasn’t yet given up on American auto makers.

"I would buy a car that suited my needs and was well made — Japanese or American," said Bennett Spickelmier, a 22-year-old graduate of Anderson College in Anderson, Ind.

Brian Frange, a 23-year-old from Wantagh, N.Y. and recent Indiana University graduate, doesn’t have a particular loyalty either. "I have a Chevy Malibu right now," he said. "But I also owned a Volvo and a Mitsubishi. I don't know much about cars, but they all seemed to work just fine to me."

Data from the Power Information Network shows that those between the ages of 15 and 30 opt to purchase foreign vehicles more than domestic ones. Of the top 10 vehicles preferred by young adults in 2006, the most recent year for which data is available, DaimlerChrysler's Jeep and General Motors' Pontiac were the only two domestic brands. That shortage of attractive domestic nameplates could get even worse when GM discontinues the Pontiac brand in 2010 as part of its restructuring plan.

This trend toward foreign cars has been rising. More Gen Y consumers are considering BMW, Nissan and Honda than the baby boomers before them, according to AutoPacific data. These younger drivers generally want compact cars and are more open to using alternative energies — an effort largely lead by foreign cars — than older drivers.

"I feel like the auto industry needs to do a better job of creating cars that satisfy the wants, needs of the average American, while still being price competitive with foreign counterparts," said Daniel Ladishew, 26, of Dallas. "It seems like most auto companies still have not realized that the average person does not want or need these increasingly large, and uneconomical vehicles."

Amy Koshy, 21, a rising senior at Southern Methodist University in Dallas, Texas, said gas-efficiency is the most important trait she would look for when purchasing a vehicle in the future.

"I’d like a car to have a smooth ride, and I’d want it to be safe. That’s a huge concern for me," Koshy said. "But I definitely don’t want a car that I’ll have to put gas in all the time."

Younger buyers are generally more open to new technologies and 61 percent would prefer something other than a pure gasoline-powered engine, according to AutoPacific, but they may not be able to afford it or some could choose luxury over greener technology.

"I can't afford a greener car at the moment but that's because I can't afford to buy a car period," Frange said. "I'm sure when I get enough money I'll buy at least a Hybrid. I think I'll wind up saving money in the long run."

Spickelmier also would like to have a Toyota Prius like her parents do, but it’s too much money for her now.

Katherine Perry, a 24-year-old recent graduate of Scripps College in Claremont, Calif., would put her pennies elsewhere. She currently owns a Hyundai because the company offered the best warranty at the time of 10 years, 100,000 miles, but if she made enough money to afford a Prius she’d probably prefer a convertible or something that is more aesthetically pleasing, she said.

"When I have enough money to buy whatever car I want, I will probably pick one that looks good, drives fast, handles well, and gets good gas millage. I don't care about anything else, including whether or not it's foreign or American," Perry said.