ADVERTISING & MARKETING : Toyota Wants Generation X in Driver’s Seat : The auto maker--long popular with baby boomers--and Saatchi & Saatchi formed units of under-35 employees to tap a young market.

In showcasing its new Echo vehicle at auto shows around the country last winter, Toyota Motor Corp. used in-your-face posters of pierced, head-shaved Gen-Xers to draw attention to it. But young adults who might have considered the bubble-shaped car were put off by the edgy ads.

The experience taught Toyota--a reliable, slightly boring auto maker favored by baby boomers--about the dangers of trying too hard in its budding courtship of first-time car buyers. And as it prepares to ship the Echo and two redesigned cars aimed at the under-35 crowd to dealers, a wiser Toyota is trying hard not to be hip.

“ ‘Cool,’ ‘hip’--we don’t use those words,” said Mark Del Rosso, leader of an eight-member squad of young Toyota marketers charged with launching Echo and the redesigned Celica and MR Spyder. “They aren’t in our vocabulary.”

Like many companies that have built fortunes catering to acquisitive baby boomers, Toyota is awakening to the swelling ranks of teenagers and young adults and their growing buying power. People under 35 account for nearly 50% of the U.S. population, and each year an ever-widening percentage of them become candidates for new cars.

As auto makers put renewed emphasis on such entry-level vehicles as the Echo, they are finding they need to rewrite playbooks that served them so well in reaching the boomer generation. But in tweaking their images to reach younger drivers, auto makers must avoid veering from what decades of advertising has trained consumers to expect.

“We can’t be a radical Mountain Dew,” said Gail Brackett of Toyota’s longtime advertising agency, Saatchi & Saatchi, in Los Angeles.

Toyota is betting that ads unveiled Tuesday for its three youth-oriented vehicles walk that fine line. The commercials show casually dressed Gen-Xers, stress individuality and, in a twist on Toyota’s slogan, profess that the company is changing--every day. Toyota is also reaching entry-level buyers through a Web site whose address pokes fun at its bland image: https://www.isthistoyota.com.

Advertising isn’t the only button Toyota is pushing to attract younger drivers. Echo, with its roomy interior and storage for CDs, will be the lowest-priced Japanese car on the market and Toyota’s first sub-$10,000 car in five years.

But Toyota realizes it will take more than a good price to sell young adults on a brand so closely associated with middle-age drivers that it has been called the Buick of Japan. And marketers admit that the bulbous Echo hardly signals an image make-over.

When shown Echo, “people think it is OK . . . they don’t know if they like it,” Brackett said. But once they examine the interior, she said, consumers warm up to the car. Thus most advertising for Echo centers on amenities and price--not looks. “Designed from the inside, out,” one ad claims.

Behind Echo is an unusual collaboration between Toyota and Saatchi. Each formed a small unit of under-35 employees and charged them with developing strategies to reach people the same age. Scott Grant, the Toyota executive who oversees its youth team, said fresh thinking was needed to reach long-overlooked consumers.

Called Genesis, Toyota’s team quizzed teenagers and young adults about cars at concerts and sporting events, scoured marketing research for insights and tested advertising ideas--including the edgy posters at auto shows. They persuaded Toyota engineers to return to the drawing board for two minor changes in Echo: adding sporty hubcaps and an optional six-speaker sound system. Among their talking points: comments about sound quality that Genesis team member Andrea Anderson collected during a previous stint in customer service.

Though formed to market Echo only, Genesis convinced Toyota brass to add Celica and MR Spyder to its mission--a development that Grant acknowledges stepped on turf belonging to Toyota’s marketing veterans. But Grant and his team argued that no single car would appeal to a group so diverse as under-35 drivers.

“It’s about choices,” team leader Del Rosso said.

At a base price of $16,695, the 2000 Celica has less power but is 20% cheaper than the current model. No longer a midlife-crisis car, it is aimed at young adults ready to trade up. The two-seat MR Spyder will be introduced in mid-2000 and priced around $20,000.

The Echo replaces Tercel as Toyota’s starter car and offers more vehicle for less money. The sticker on the basic two-door model with five-speed manual transmission is $9,995, although the mandatory $455 shipping charge raises it to $10,450. That compares with $12,690 for the 1998 Tercel.

“This is clearly a case of Toyota adding to its strengths,” said Jim Hall, a Detroit-based industry analyst with AutoPacific. He said Toyota, which set up a special financing unit for young buyers, should have no difficulty selling 50,000 of the cars.

Still, Toyota faces competition for young drivers. Backed by a $100-million advertising blitz, Ford Motor Co. last month introduced Focus to compete with DaimlerChrysler’s Dodge and Plymouth Neon and Honda Motor Co.’s Civic, the best-selling small car. And Volkswagen, thanks to its funky Bug, the New Beetle, has a strong image with young adults.

Toyota’s campaign for its youth vehicles takes it into new territory, as it reaches out to Generation X, the 25 million 20- to 35-year-olds of car-buying age, and “echo boomers,” the 80 million teenagers about ready for a car. It is placing ads on Internet radio, in youth-market lifestyle magazines and on MTV programming and sponsoring concerts and other lifestyle events. Toyota said 70% of its television ads will appear on cable programs with a strong youth following.

The auto maker is also aiming its message--Toyota is now youth-friendly--into the nation’s high schools by distributing 200,000 planners. The free spiral-bound notebooks are dotted with pictures of Echo, Celica and MR Spyder.

Toyota said spending on Echo would boost fourth-quarter ad spending by 20% over a year ago. It spent $138.5 million in the fourth quarter of 1998, according to Competitive Media Reports.

In a television commercial set to air tonight, Toyota describes its new vehicles as revolutionary. A casually dressed, goateed youth in his mid-20s yanks a plug from a wall in an office building, killing the bland background music, and jams the plug for his own boombox. The scene is followed by the message: “Every revolution begins with a single act of defiance. We have three.”

Will consumers buy it?

“We’re trying to showcase ourselves as being unconventional, nonconformist in a conformist world. That’s what the ad is all about,” said Steven Sturm, Toyota’s marketing vice president. “We’re introducing three brand-new products in this new generation market, where Toyota has never been, and we think that’s pretty revolutionary.”