Hispanics are buying more new cars and trucks than ever before, scooping them up at a faster pace than the overall market.
In 2005, Hispanic households spent nearly $22 billion on new vehicles, up from the $9 billion they spent in 1994, according to the recently released "Consumer Expenditure Survey, 2005," from the U.S. Department of Labor's Bureau of Labor Statistics.
The survey also found that Hispanic spending on new vehicles increased at an annual rate of 9.2 percent, while the overall national rate grew by an anemic 1.9 percent – below the rate of inflation during that same period.
And it doesn't look like Hispanics will put the brakes on new vehicle purchases anytime soon, especially since the Hispanic buyer is in general younger than the average purchaser is. New cars and truck sales to Hispanics are projected to grow 29 percent by 2010, according to J.D. Power & Associates. Hispanic consumers are expected to spend $40 billion a year on motor vehicles and parts by the end of this decade.
So who is this Hispanic car buyer? Despite major automotive manufacturers' growing interest in the Hispanic consumer, research on whom is buying what is still scarce.
One thing is certain: The Hispanic consumer cannot be lumped into one category. They are as varied as the new car models rolling off the production lines, from the upwardly mobile and educated single man or woman to recent arrivals with large families. They are as likely to buy a Range Rover as they are a Chevy Silverado, and are as likely to do their research on the Internet to find a car dealership as the print media.
Plus, Hispanics are getting wealthier. The last decade has seen a 126 percent increase in U.S. Hispanic households making more than $100,000 per year, which represents a total net worth of $500 billion.
"With the Hispanic median age being so much lower than the general market's, the Latino influence will only continue to grow," says Carlos Martinez, vice-president and general manager at Conill Advertising, where he is in charge of marketing for Toyota brands to the Hispanic market. "I can't say down the road that manufacturers will be designing cars for Hispanics, but I think if you are making cars for the U.S., you will have to take the Hispanic into consideration."
This consumer is buying newer and more expensive cars, increasingly choosing imports over domestics. While some reports show Toyota as being the current top brand of choice for new vehicles purchased by Hispanics, others point to Ford or General Motors and its Chevrolet brand.
How Hispanics approach car buying is also evolving.
"They're more educated and so that brings a level of empowerment to the Hispanic consumer, so what you have is a much more informed buyer walking into our stores," says David Rodriguez, the multicultural marketing manager for Ford Motor Co.
Hispanics are also very comfortable spending money on new luxury vehicles, even more so than non-Hispanics at the same income level.
They're also buying luxury automobiles at a faster rate than the overall market. Vehicle registrations for luxury vehicles increased 53 percent from 2002 through 2006, while non-Hispanic registrations only rose 13 percent during that same time period, according to R.L. Polk & Co. figures that were provided by Conill.
Luxury carmakers are paying attention. This year, Ford's Land Rover unit rolled out marketing campaigns that included advertising in Hispanic publications and Web sites, and event sponsorships in cities such as Miami and Los Angeles.
