LOS ANGELES -- Two auto brands that are targeting young customers through pioneering "crowd-funding" initiatives are seeing vastly different results in terms of sales. Yet both are claiming success.
Earlier this year, Hyundai renewed its partnership with Motozuma.com, an online crowd-funding platform designed to help consumers round up contributions from their friends and family for a down payment on a new car. Hyundai matches the contributions dollar for dollar, up to $500.
Meanwhile, Dodge launched the Dart Registry, an online portal similar to a wedding gift registry, where a user can customize a Dart online and invite friends and family to "sponsor" different parts of the vehicle. Instead of flatware or an espresso maker, friends can kick in for the car's LED ambient lighting, for example, and track the registry's progress toward its goal.
Hyundai, which is Motozuma's sole automaker partner, says it sold about 1,600 cars through the program last year, or roughly a quarter of one percent of the 703,007 new vehicles it sold in the United States last year.
The Dart Registry's sales total: two.
Still, Dodge says the program is doing what it's supposed to. "With the notion of the Dart being an all-new entry to the compact-car segment, which is highly competitive, we wanted to create awareness and actually get the Dart talked about," says Melissa Garlick, head of Dodge brand advertising. Driving sales was less of a priority, she says.
The two initiatives represent the auto industry's earliest attempts to cash in on interest in crowd-funding, a fundraising strategy that melds the Internet's publicity, commerce and social-networking functions. Crowd-funding has been embraced by artists looking for investors to bankroll their next work, by teachers seeking materials for their classrooms and by entrepreneurs trying to secure startup capital for a manufacturing venture.
Crowd-funding initiatives are especially popular among young people who don't have easy access to bank credit, foundation grants or conventional venture-capital networks. Still, the dollars available can be significant.
On kickstarter.com, the world's largest crowd-funding Web site, more than 42,000 projects have been financed with more than $630 million in donations from about 4.1 million people. One Kickstarter project, for example, has raised more than $800,000 for a company that wants to begin manufacturing a portable cellphone charger.
Nathan Miller, senior group manager of incentives for Hyundai Motor America, says the Motozuma program appeals to younger consumers and first-time new-car buyers who struggle to amass down payments.
"You have a lot of younger buyers who don't have a lot of money to put toward a new car, and they're rolling their equity from one car to the next," Miller says.
Miller says 64 percent of the Motozuma users who purchased a new Hyundai last year with the down payment match were 35 or younger.
"That is a demographic that every automotive manufacturer is after," Miller says.
While its sales numbers pale in comparison, Dodge says its Dart Registry is still connecting with the young consumers it's after. Users can configure their Darts on the registry's site and enter the amount of money they wish to raise toward the purchase price. They can then share the configuration and post a video to publicize their fundraising appeal over social networks.
Over 6,800 Darts have been registered on dodgedartregistry.com since it was launched in January. Among the hopefuls seeking donations: a comic-book author with young kids and a Florida teen working at a mall while attending college.
Of the two appeals that reached their goals, one came from Jake Kelfer, a 20-year-old business student at the University of Southern California. He and his fraternity brothers at Zeta Beta Tau raised $18,000 over three months to buy a Dart for the local Meals on Wheels office, using Facebook and Twitter to promote the chapter's service project.
"The registry served as a medium between the frat and the community," Kelfer says. "Had we not had the registry, I don't think we necessarily would have been able to raise $18,000 in three months."
Most Dart registrants aren't even close to their fundraising targets. Only 1,583 components have been funded while more than 530,000 parts are waiting for sponsors.
Garlick says that's beside the point. The initiative, she says, has generated about 70 million media impressions, 840,000 unique page views and an average time spent on the Web site of about 11 minutes. All that for a revived Dart nameplate that had been mothballed for more than three decades.
The two fully funded registries, she says, were "a nice cherry on top."