Across the country motorists are beginning to re-think their auto-buying and -driving habits, especially now that the cost of gas is a major consideration. That includes members of the fast-growing and increasingly affluent U.S. Hispanic community, industry experts note. They point out that American manufacturers can no longer take for granted this group long seen as one of their most loyal buyer segments.
That's particularly bad news for Detroit automakers. They traditionally dominated the Hispanic market, but some critics contend the Big Three (Chrysler, Ford, and GM) also assumed they would hold a major share of this segment. As import brands become more popular among Hispanic auto buyers, that assumption is proving to be a dangerous one.
Domestic Brands Look for Traction
Consider what the Census Bureau labels some of the nation's fastest-growing states – California, Florida, Texas, Arizona, and North Carolina. Collectively, Detroit's share of those five states fell to just 46.9 percent in 2004, down more than eight points since 1999, according to research by R.L. Polk.
With Asian import brands like Toyota, Honda, and Nissan dominating the mainstream market, and luxury makes such as Lexus overwhelming Detroit's Cadillac and Lincoln in cities like Miami and Los Angeles, the Big Three are struggling to keep their collective nationwide market share from plunging below the watershed 50 percent mark for the first time.
In terms of specific brands, R.L. Polk data on share of the U.S. Hispanic market revealed that:
n Ford was the dominant nameplate within the community – but from just 2002 to 2004, its share slipped from 21.1 percent to 18.8 percent; and as of June 2005 it held first place with Hispanics by a hair, with a 15.9 percent market share.
n Chevrolet, once the market leader, actually bucked the Big Three's downward trend, gaining just under a point of share. At 15.9 percent of the Hispanic market for 2004 and 15.8 percent as of June 2005, it's right on Ford's bumper – but still a shadow of its once-powerful self.
n Perhaps the most revealing signal shows up with the shift in the number 3 slot. In 2004, Toyota nudged past Dodge. While Dodge's share was relatively flat between 2002 and 2004, Toyota's soared from 8.8 percent to 11.5 percent, and sustained the lead at 11.0 percent in the first half of 2005 compared with Dodge's 7.2 percent.
n Meanwhile, value-priced Hyundai first burst onto the list in 2004, and was number 9 to Kia's 10th place at mid-year 2005.
A recent report published by the American International Automobile Dealers Association (AIADA) found that Toyota is actually number 1 among Hispanics in the Los Angeles market, with Nissan at number 2. The Japanese giant is also the community's top choice in California overall, as well as in New York and Florida, AIADA indicated.
It's no wonder then that the traditional domestic manufacturers have been shifting resources from conventional marketing efforts into the Hispanic community. "We have to do better in these key markets," concedes Mark LaNeve, General Motors North America's vice-president of sales, service, and marketing. "Hispanic communities are growing everywhere in the country, so if we want to grow, we have to connect with the Hispanic market."
General Motors actually has shown some success in regaining its once-dominant position within the Hispanic community. Its "Subete" (which GM translates as "join in") ad campaign has resonated with Hispanic buyers, as have a variety of support efforts. GM's finance subsidiary, for example, has set up meetings at Hispanic workplaces, explaining the nuances of car loans and providing potential buyers with easy applications and quick decisions.
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