DETROIT – Ask Patrick Carr, a 25-year-old Warren engineer, which feature he likes most about his new Dodge Caliber and you’ll get an interesting answer.
“Lighted cup holders,” Carr said without hesitation. “That was very cool. I couldn’t wait until it got dark so I could actually see them.”
He went on and on about those cup holders, said his wife, Jesse Carr, a 24-year-old veterinarian technician. While lighted cup holders may seem insignificant, DaimlerChrysler AG, the maker of the Caliber, and a host of other automakers are packing everything they can in their compact cars to increase the “cool factor” and attract young buyers.
Honda Motor Co. won 2006 North American Car of the Year honors with the redesigned Civic, which offers safety, style and performance in a car that starts at $14,560. General Motors Corp. has a hit with the retro-styled Chevrolet HHR, which starts at $15,890. And Toyota Motor Co. offers extensive customization with its Scion line, which starts at $13,320 and allows buyers to choose everything from side-panel graphics to glowing interior foot-wells.
Dodge enters the fray this month with the launch of the Caliber, which starts at $13,985. A gadget-packed hatchback, the Caliber offers an iPod holder in the armrest, rear speakers that flip out when the tailgate is opened, a chilled storage bin in the glove compartment and a rear cargo light that pops out to serve as a rechargeable flashlight.
First impressions count
Once seen as basic transportation, the small car segment is becoming increasingly competitive as automakers go after young buyers, said Erich Merkle, director of forecasting for IRN Inc., a Grand Rapids research and consulting firm.
While the prices and profit margins may be low on these vehicles, the stakes are high because echo boomers – a large generation that represents the children of baby boomers – are entering their teens and 20s, prime age for getting into their first cars.
Companies are scrambling to make an initial connection in hopes of landing big volumes now and selling young buyers more expensive cars down the line, Merkle said.
Scion setting trends
Toyota appears to be on the cutting-edge of marketing to this youth segment with Scion, a set of affordable vehicles with eye-popping paint schemes, edgy body designs and slick interiors.
Introduced in California in 2003 and then the rest of the United States in 2004, the line has become so popular that Scion clubs are popping up.
Chris Fera, 29, of Roseville traded in his 1995 Ford Escort a year and half ago for a Scion xA, a snub-nosed hatchback. For around $16,000, Fera’s Scion came with a car alarm, spoiler, glowing blue foot-wells and lighted cup holders that cycle through about 10 different colors.
Shopping for his first new car, Fera said he wanted something that was affordable and fuel efficient but also looked cool. With an indigo ink pearl paint job, his Scion xA turns heads.
“At first, it was kind of weird,” Fera said. “You didn’t know how to take it. … You’ll go by some of these people. All of a sudden, they’re speeding up, trying to catch up with you and check out your car.”
The goal of Scion was to bring young, style-conscious buyers into the Toyota family, said Scion corporate manager Steve Haag.
Dodge goes for youth appeal
Hoping to land first-time buyers of its own, Dodge will be going after the youth market with the launch of the Caliber.
When Dodge started developing the Caliber four years ago, it studied the habits and interests of young car buyers, said Ann Fandozzi, Chrysler Group director of front-wheel drive marketing, which includes the Caliber.
Dodge researchers knew the car needed to be affordable, safe and fuel efficient, Fandozzi said. But the Dodge team also knew young buyers wanted something they could be proud to own and show off to friends, she said.
Music was important to these buyers, Fandozzi said. Even in cheaper used cars, young consumers were spending thousands of dollars on speakers and audio equipment.
The Dodge team came up with the iPod holder in the armrest and the speakers that flip out in the back when the lift-gate is opened. They also made the nine-speaker audio system available as a stand-alone option for less than $500. “We knew the sound system would have to kick,” Fandozzi said.
Young buyers also have active lifestyles, so the team added the chilled beverage storage bin and washable rear cargo mat.
The trick, Fandozzi said, was to add features without dramatically increasing the price. The chilled glove box works off the AC system. The iPod holder simply required molding the armrest in a different shape. The car needed a dome light anyway. So the Dodge team designed it to pop out and double as a flashlight.
“It doesn’t add a lot of cost,” Fandozzi said. “It’s just clever design.”