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How Ford and GM Are Combating This Big Problem

In the following video, analyst Brendan Byrnes talks with Fool contributor Andrew Tonner to discuss one problem automakers are currently grappling with: Fewer millennials are buying cars, and fewer are getting their licenses. There are several reasons for this trend, including the poor economy and a population shift toward bigger cities.

How are automakers responding? One way is to reach out more to younger customers. Another is technology. In the video, Brendan and Andrew chat about the different tech strategies at Ford and General Motors, and which they like better. 

Ultimately, this is a huge deal for automakers because of the opportunity to lock in young customers for life. The industry average loyalty rate is around 50%, with Ford over 60% and GM's brands running the gambit from high to low (see more here). 

China is already the world's largest auto market -- and it's set to grow even bigger in coming years. A recent Motley Fool report, "2 Automakers to Buy for a Surging Chinese Market," names two global giants poised to reap big gains that could drive big rewards for investors. You can read this report right now for free -- just click here for instant access.

Read/Post Comments (5) | Recommend This Article (2)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On August 04, 2013, at 12:36 PM, Askme1st wrote:

    GM and Ford steal have not realize that they are killing the goose that lays the golden eggs. They can reach out to younger customers but it still want help them. The bottom line is simple this both GM and Ford don't build car that people don't want. They build cars and trucks people can not afford to buy.

    I know we all seen the advertisement that they both ran stating. Discount you pay what the employee pay for a car. Bad advertisement you trying to sale to general public a product. A product that the people with the high paying jobs that build them can't even afford to buy them. Unless they are give a employee discount.

  • Report this Comment On August 04, 2013, at 1:20 PM, Glen49520 wrote:

    They must be doing something right when you look at the numbers , keep it up guys.

  • Report this Comment On August 04, 2013, at 1:40 PM, Blondesamantha wrote:

    I've had an American car once. Never again, There is absolutely nothing they can do to get my business. Nothing. I hope to buy many more cars before I die, but you can bet your last dollar that None of them will be GM or Ford products.

  • Report this Comment On August 04, 2013, at 1:58 PM, vet212 wrote:

    They aren't buying because they wont work and not working they have no money and cant buy so they drive mam and daddy's cars

  • Report this Comment On August 05, 2013, at 1:21 PM, sccoast1700 wrote:

    I agree with vet 212 about prices, but foreign cars are just as expensive, if not more so. Some of the small efficent cars, like the Chevy Cruze, and dodge Dart are not bad in price. those $30000 cars are out of the reach of many people. The foreign cars are just as bad.

    I usually buy used American cars. They are a good value and hold up well.

    I disagree with Bonde samantha about the quality of American cars. They are as good as any. I have a '97 F150 that has 120000 problem free miles. It runs like a dream. Still going strong.

    But it's your money. If you want to see junk , go buy a kia and a Hyundai. I had a Mini once and that was a piece of crap that was falling apart. I got rid of it.

    My wife has a Mercedes that is as expensive as can be justfor basic repairs. she also had an Audi that had the transmission fail at 100000 miles. It was a $4000 job to fix it. I'll take a good old American car over any of them.

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