News Column

Hispanics Potent in Driving Auto Sales

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Whether it's from the joy of taking the
family for a drive in a new sedan or from
the need of a new workhorse pickup
truck, Hispanic automotive consumers
have a fantastic opportunity to reenergize
the automotive industry.

At the same time, individual
automakers have an excellent chance
to tap deeper into the Hispanic auto
consumer market.

The auto industry has been
rebounding. From September 2009
to September 2010, sales of passenger
cars rose 18 percent and sales of
light trucks increased 40.8 percent.
Automakers expect this trend to
continue into 2011.

The five auto manufacturers that
showed the best increases during that
period were Chrysler LLC, Hyundai
Motor America, Subaru of America Inc., Ford Motor Co.,
and Kia Motors America Inc. Th e top-selling models during
this period were the Chevrolet Impala, up 35.4 percent;
the Ford F-Series pickup, up 29.4 percent; the Ford Fusion,
up 17.7 percent; the Toyota Prius, up 15.8 percent; and the
Chevrolet Silverado pickup, up 12.2 percent.
At the same time, the Hispanic consumer market has
continued to become a growing force. The 2010 Census
expects to count 50 million Hispanics,
fully one of every six U.S. residents.

That represents an increase of 42
percent from the 2000 Census.
The Bureau of Labor Statistics'
October 2010 Consumer Expenditure
Survey reported that, in 2009, Hispanic
expenditures on new cars and trucks
was $14.4 billion, or 9.2 percent of all
expenditures. At the same time, while
spending on new cars and trucks for
all consumers decreased by 0.6 percent
from 2008 to 2009, spending by
Hispanic consumers on new vehicles
rose 28.8 percent.

The increased spending by Hispanic consumers was
caused by two factors, the survey said—an increase in the
number of family units, up by 2.3 percent, and an increase
in the average spending of each family unit, up by 25.9
percent. This data came from 2009, when the economy was
much weaker than it is today.

Increased sales in the auto industry and the growing
consumer power of Hispanics signal rebounding of the
economy in the months ahead.

Traditional American Values
Hispanics have become the nation's second-largest
consumer market, but more than that, they have become
the upholders of traditional American values.
Peter Francese, a demographics and consumer markets
expert, explored the Hispanic consumer market in an
Ad Age article published July 26, 2010. Using data from
the 2010 Census, Mr. Francese painted a portrait of this
growing market. He noted that over the next decade and
beyond, Hispanics would become a major force in the
growth of U.S. consumer spending.

"The most remarkable aspect of Hispanics in America
is how closely they exemplify our idealized concept of
1950s America," Mr. Francese wrote. "They are young
(their median age is about where the whole nation was in
1955) and more oft en live in large, traditional, married with-
children families with lots of participation from

He noted Hispanics are moving to the suburbs, are very
community-oriented, and have high aspirations for their
children. "In short," he wrote, "they are the sweet market for
consumer goods and services that the entire nation used to
be when baby boomers were young."

This augurs well for the automotive industry. As noted
on the Automotive Aftermarket Internet Marketing Blog,
young, hard-working Hispanic families want a slice of the
American Dream: "A good job -- a house with a yard for the
kids -- and, of course, a brand new car."

Internet Use by Car Buyers
The Internet has become an effective tool for Hispanics
when purchasing a vehicle. A study conducted early in 2010
by Ad Words Agency and Compete Inc. looked at the way in
which Hispanics bought automobiles.

According to information posted on the Ad Words
Agency blog by Lauren Dale, automotive marketing
manager, the study revealed interesting statistics:
"92 percent of Hispanic new-vehicle buyers visited an
automaker site or a third-party site prior to their vehicle
purchase, compared to 84 percent of the general Internet

"A greater proportion of Hispanic purchasers used keypurchase
indicators, such as Build Your Own, Offers, and
Locate a Dealer than the general Internet population."
"Hispanic auto consumers are heading to a search engine
with a purpose."

Information from the study found that 52 percent
of Hispanics used the Internet to find reviews about
vehicles, 44 percent to find vehicles they are not familiar
with, 39 percent to locate a local dealership, 59 percent
to find the best deals, and 41 percent to find the vehicle
brand's Web site.

Auto Industry Opportunity
Th e nature of the Hispanic auto consumer market also
off ers automakers an excellent opportunity to bolster its
presence among this demographic.

For example, Chevrolet has awarded all Hispanic
advertising work in the United States to the LatinWorks ad
agency, based in Austin, Texas. Ford has a Spanish-language
mobile Web site at

Commendable efforts, but the shift in the Hispanic consumer
demographics suggests that, within the next decade, Hispanics
will become more mainstream consumers, both in terms of
spending habits and in
fluency in English.
Mr. Francese, in
his Ad Age article,
noted that 91
percent of Hispanic
children were born
in the United States,
compared to only 47
percent of Hispanic
adults. With one in
three Hispanics in
the United States
younger than 18 and attending public schools, English is
making gradual gains as the language Hispanics are becoming
most comfortable with. Mr. Francese noted that nearly half,
44 percent, of the demographic is at ease in English. Th is also
means the children will acculturate at a faster rate than their
parents did.

"With the Hispanic market at this tipping point," Mr.
Francese wrote, "one of the biggest challenges for marketers
is reaching young, acculturated
bilingual Hispanics who behave
diff erently than their parents who
didn't grow up in the United States
and don't spend as much time with
Spanish-language media, but still feel a
deep sense of Latino identity."

By increasingly targeting the Hispanic
consumer, the auto industry will be able
to continue growing sales throughout the
next decade. And the industry doesn't
have to go far to find the right way to
tap deeper into the Hispanic consumer
market. They did it once before, back
in the 1950s, when the economic engine that drove the United
States created a hefty middle class of consumers.
Hispanics are poised for a bright future, one in which their
spending habits can spur the economy. Mr. Francese wrote:
"Younger and larger Hispanic families will be more vital to future
growth in consumer spending than at any time in the past."
In this respect, the Hispanic auto consumer market holds
the keys to drive auto sales back to customary highs, to power
up the economy, and to smoothly ride the road to economic

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