View Consumer Expenditures Survey Charts for Hispanic Spending
Until recently, the homogenized, mass-market mind-set of automakers, both import and domestic, seemed unable to grasp the breadth, depth, and affluence of the Hispanic car market. As a result, Hispanics were a target audience the industry all but ignored. But competition has a way of changing things.
Just standing on a street corner, anyone can see how the U.S. automotive market has fragmented in recent years. Gone are the days when a few vehicles, such as the Chevrolet Impala or Ford Taurus, could dominate sales. Today’s sales charts show a maze of niches and specialty vehicles. In response to all this clutter, carmakers are re-examining the notion of individual buyer segments. Few such categories stand out with the clarity – and buying power – of the Hispanic market.
Growth of the Hispanic segment shows in a number of statistics. The Labor Department’s Consumer Expenditures Survey finds that Hispanic spending on new cars and trucks surged from $868 million to $1.35 billion during the five-year period from 1994 to 1999 (see chart - "Hispanic New Car & Truck Purchases"). Over the same time frame, spending on used vehicles increased more than 50 percent, to nearly $2 billion (see chart - "Hispanic Used Car & Truck Purchases"). Add in spending on such items as financing, fuel, maintenance, and insurance, and the Hispanic market’s total vehicle expenditures came to a hefty $8.3 billion at the beginning of the new millennium – a figure the auto industry can no longer ignore (see chart - "Hispanic Total Vehicle Expenditures").
A closer look at the segment reveals further fragmentation. This is a diverse group, taking in young, Spanish-speaking immigrants in California, long-established families in Texas, and wealthy expatriates in Miami. So buying patterns reflect subtle differences within those particular regions, explains Roy Larson, president of Oregon-based Larson Northwest Research and Consulting, in Portland. The market also contends with a variety of other factors, such as age and acculturation, Mr. Larson notes.
Still, certain patterns distinguish Hispanic buyers from the broader U.S. market. For example, Hispanics tend on the whole to focus more on traditional passenger cars – sedans, coupes, and wagons – though that is shifting, as it is for the country as a whole, to minivans, SUVs, and light trucks.
The sales process also reflects differences, suggests Robert Santiago, account director at the advertising shop La Agencia de Orcí & Asociados in Los Angeles. Where the average U.S. car-buyer tends to focus on the driver and the driver’s needs, Hispanics tend to focus on "the needs of the family … the comfort and safety of their families in the vehicles," Mr. Santiago says. "Flexibility is very big."
Hispanic-oriented marketing, Mr. Santiago and other experts agree, tends to speak to this interest. As for sales and service, Hispanic buyers "want to be treated well, promptly, and effectively," says Jeff Campana, vice-president of California-based Allison-Fisher International, an automotive market research firm.
Most Popular Stories
- World Bank: Rich Countries Must Curb Emissions
- Airport Garners Social Media Award
- Social Media Campaign Increases Organ Donor Registrations
- What Will Happen When Quantitative Easing Ends?
- Immigration Reform Would Decrease U.S. Budget Deficit
- MillerCoors Taps New Hispanic Ad Agency
- Aetna Leaving California's Individual Health Insurance Market
- Conference Slated for Hispanic Tech Startups
- Tea Party Wants to 'Audit the IRS'
- Calories Count: Starbucks to Post the Numbers on Menu Boards