Stylish products, like this Ford Fiesta, targeting a downsized "super-segment" have helped Detroit retake share from the Japanese.

Rob Golden, a Los Angeles-based writer, can’t recall the last time he owned an American car, “unless it’s the Chevy my parents drove when we moved to California when I was 10.” But when it was time for his college graduate son to get his first new car, he opted for a Ford Fiesta, rather than the Toyota Camry or Corolla his father wanted 23-year-old Daniel to buy.

“I just think it’s cooler looking and a lot more fun to drive,” he explains.

The members of the Golden family aren’t unique.  Baby Boomers by the millions shifted their loyalty to import makers like Toyota, Nissan and Honda over the last four decades. But their children appear to be migrating, in large numbers in the other direction, according to a number of new studies.

“U.S. automakers have burst onto the scene in recent years with small, fuel-efficient and affordable cars that really appeal to a young set of buyers,” says Edmunds.com Senior Analyst Jessica Caldwell.

According to the data tracking service, Japanese makers have seen their share of buyers in the 18 to 24-year-old segment decline by 9.8% since 2008. At the same time, domestic brands have gained about 1.9 percent.

Some of the biggest shifts have occurred in the lower end of the market, in industry lingo the B-, C- and C/D segments of the passenger car market, such as the new Chevrolet Spark, Ford Focus and Ford Fusion, as well as the compact crossover niche, including the Chevrolet Equinox and Ford Escape.

Ford refers to this cluster as a “super-segment,” accounting for about 50% of current sales in the U.S. new vehicle market, up from just 35% as recently as 2004.  Detroit makers weren’t particularly strong in this category until recently, but they’ve been rolling out an assortment of new small products, especially on the passenger car side, such as the subcompact Ford Fiesta, the new Chevy Spark minicar and the little 500 from the Italian side of the Fiat/Chrysler alliance.

These were segments “where we needed to grow,” says Amy Marentic, a senior marketing manager for Ford Motor Co., “or we were going to continue losing market share.”

Of course, the Detroit makers aren’t the only brands anxiously tracking Millennial buying trends. Toyota created an entirely new division, Scion, to go after young buyers. It scored some solid successes with the now older Gen-X but while Scion still claims to have the youngest buyers, on average, of any brand in the U.S. market, it has been struggling to maintain sales and share over the last several years.

The “why” is the question everyone in the industry is asking, and there could be a variety of explanations.  Scion itself hasn’t matched the quality of its bigger parent, Toyota. At the same time, independent studies by such widely-quoted research firms as J.D. Power and Associates have found that while the overall quality of new vehicles has gone up pretty much every year, domestic makers continue to close the gap.  In many instances, the gap between top-ranked and industry-average products may be, in Power’s terms, two or three “problems” for every 100 vehicles.

Detroit makers have been aggressively pushing new technology, such as the Ford Sync and Chevy MyLink infotainment systems that Millennials appear to crave. They’ve also put a premium on edgy designs, such as the well-received new Ford Fusion.

That’s an area where many Japanese makers are admittedly playing catch-up. Toyota CEO Akio Toyoda has repeatedly declared the need to put more “passion” into his company’s products and a concept version of the compact Corolla that debuted at January’s Detroit Auto Show gives a hint of what that might mean.

While Detroit’s Big Three are particularly hopeful that they can take advantage of the latest trends, trying to get a clear understanding of the Millennial generation isn’t easy, admits Ford’s Marentic.  “Don’t think we have the Millennials figured out,” she admits, “because we don’t,” though Ford is having some success “cracking the code,” she adds.

Detroit makers aren’t the only ones hoping to benefit at Japan’s expense, stresses Edmunds Editor Caldwell.

“While Detroit might be chiseling away at the Japanese grip on Gen X and Gen Y, South Korean brands are taking big hacks,” she notes. “Not only are the Koreans making better cars for young people, but they’ve also worked to make credit available to young buyers who still don’t have solid credit history.”

So is Ford, says Marentec, who says the maker has special programs for college grads looking to buy a new car. It is also working up a discount program for “Zipsters,” the generally younger users of the ZipCar carsharing service that has become wildly popular on college campuses and in urban markets where owning a car can be a challenge.

That, in fact, may be one of the biggest issues that all automakers, domestic or foreign-owned will have to deal with. A variety of studies have revealed that Millennials don’t have the passion for driving that their parents did – generally getting their drivers licenses later in life and more often skipping the car ownership rite of passage.

Ford, in particular, has tried to benefit by partnering with ZipCar. Eventually, forecasts the Detroit maker’s sales analyst Eric Merkel, most Americans wind up buying a car. And if they liked the vehicle they rented they’re more likely to buy from that brand later on.

If he’s right, it could continue giving Ford – and the domestics as a whole – another way to gain ground with the newest generation of buyers.

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