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Speeding Up

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And there are few signs that the pace is going to slack off any time soon. Quite the contrary: General Motors promises to launch a massive product assault over the next three years to support the revival of brands such as Saturn, Pontiac, and Buick. Ford is rolling out three separate models just to replace its aging Taurus sedan. And Hyundai is intent on shifting from a niche to mainstream player, a move backed by a wave of cars, trucks, and crossovers.

So Mr. Cowger, like many auto-industry executives these days, is pushing his marketing team to find "non-traditional" ways to reach buyers that the industry has either missed or outright ignored. GM has launched a variety of efforts to connect with the Hispanic community, including ads featuring Mr. Cowger, a Spanish speaker who once headed GM operations in Mexico. (Story Continues Below)

Top 10 Brands Among Hispanic Buyers -- 2004
Make 1st Quarter 2004 Share of Hispanic Market
1. Toyota 37,353 15.5%
2. Ford 36,989 15.4%
3. Chevrolet 31,550 13.1%
4. Honda 22,077 9.2%
5. Nissan 21,890 9.1%
6. Dodge 15,458 6.4%
7. GMC 8,992 3.7%
8. Hyundai 5,623 2.3%
9. Jeep 5,380 2.2%
10. Mazda 4,643 1.9%
Source: R.L. Polk & Co. Based on total new vehicle registrations.

Just before the Athens Olympics, the automaker's Chevrolet division launched an ad campaign dubbed "Súbete," or "come aboard." And Chevy remains the automotive sponsor for the popular Hispanic music awards, El Premio De La Gente. Chevy is even sponsoring appearances by nominees at showrooms in Hispanic communities. And the Pontiac division has signed an endorsement deal with Hispanic race driver Milka Duno to promote the launch of its new G6, a car it considers critical in the brand's revival.

GM is by no means the only automaker targeting Hispanics. Ford invested heavily to target the Hispanic community, among many ethnic groups, with the launch of its redesigned F-Series pickup. And the payoff appears to have been worth it: Ford set all-time sales records in 2004 with the full-size truck.

Spending seems almost certain to continue outpacing the ad market as a whole, and the census data provides only one explanation. There's also a realization that despite old stereotypes, the loyalty of Hispanic buyers is up for grabs. Consider recent data from Mediamark Research, Inc. that shows 46.2 percent of all Hispanics owned a domestic vehicle, but among affluent members of the community, that slipped to 40 percent. Among Americans overall, domestics still accounted for 56.3 of vehicles in the Mediamark survey.

As with other ethnic groups, Hispanics are "sensitive to imagery," says Mr. Gorrell, of Strategic Visions. "They're upwardly mobile and tend to be interested in the brands that have the best image. So that's going to be particularly difficult for weaker brands, especially the domestics." Some of the big domestics already are fighting hard to protect their image. R.L. Polk earlier this year noted that in the first quarter this year, based on total new-vehicle registrations, Toyota topped Ford in sales to Hispanics.

All of this comes amid a variety of trends shaking up and reshaping the new car market that make it more important than ever to appeal to the broadest possible audience. "The market is being atomized," says George Peterson, founder of AutoPacific Inc., an automotive industry think-tank. And it's not just the number of new products, but how they're dividing up the market.

Immediately after World War II, there were just 33 nameplates on sale in the United States, virtually all of them domestic. By 1980, that had grown to 150, and in 2000, the figure hit 208. AutoPacific estimates it should reach 275 by 2009. So where it was once common for a manufacturer to sell 200,000 copies of the typical nameplate, and as many as 1 million of a best-seller like the Chevy Impala, there are few high-volume nameplates left. Today, the average is down to around 80,000 and there are just a handful of Camries and Explorers that can approach 400,000 annually.

Meanwhile, where manufacturers long slotted their products into careful defined niches, they're now intent on drawing outside the lines. Sure, there are plenty of classic sedans, coupes, sports cars, and sport-utility vehicles. But more and more products don't fit any conventional category. The new Ford Freestyle is what industry planners have dubbed a crossover, a blend of car and truck. It looks like an SUV, but shares the same platform as the new Ford Five Hundred sedan. The EXT, a spin-off of Cadillac's hot Escalade sport-utility vehicle, bolts a pickup-style bed to its SUV passenger compartment.

The good news is that there seems to be a car, truck, or crossover to fit virtually every consumer's needs and desires these days. But with so many hard-to-define vehicles selling at such low volumes, "It is not surprising that launching and establishing new products is more difficult today than at any time since the 1950s," a recent AutoPacific study suggested. Now add in the issue of overcapacity: With a flood of new foreign-owned "transplants," domestic assembly lines and products produced abroad but earmarked for the United States, total capacity is pushing past 20 million, even though total vehicle sales this year will barely nudge 17 million. (Story Continues Below)

Top 10 Brands Among Hispanic Buyers -- 2003
Make 2003 Share of Hispanic Market
1. Ford 159,718 15.9%
2. Toyota 145,819 14.5%
3. Chevrolet 143,938 14.3%
4. Honda 91,935 9.2%
5. Nissan 70,900 7.1%
6. Dodge 66,204 6.6%
7. GMC 37,652 3.8%
8. Hyundai 26,356 2.6%
9. Mitsubishi 22,357 2.2%
10. Jeep 20,546 2.0%
Source: R.L. Polk & Co. Based on total new vehicle registrations

Manufacturers are fighting for every tenth of a point of market share. And to support their new products, they've rolled out record levels of incentives. Detroit, in particular, has been averaging more than $4,000 in rebates, subsidized loans, and other givebacks on the typical vehicle. And even the Japanese have been running close to $1,500 in incentives in recent months. There's little sign this trend will abate any time soon.

The bottom-line impact is staggering, of course. So manufacturers are desperate for ways to connect to potential buyers. Increasingly, that means that rather than pitch to the mainstream, more and more of the new specialty vehicles are being targeted to niche and ethnic communities, whether gays-and-lesbians, African-Americans, or Hispanics.

For the Hispanic community, then, all the trends are pointing in the right direction. Automakers are no longer taking Hispanic buyers for granted. They're listening to the community and responding with targeted messages. Better yet, what they're saying is backed up by the largest wave of new product in automotive history.


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