Equally important is what David Rodriguez, a multicultural manager for Ford Motor Co.'s Lincoln and Mercury division, refers to as "the growth of affluence." The Hispanic community is expanding fast, but total spending on automobiles is growing even faster, in part reflecting such things as better education and improved job opportunities. Again, looking at the five-year period, 2000 through 2004, Hispanic Business data show the dollars spent on new cars, trucks, and crossovers shot from $10.2 billion to $19.2 billion during the same timeframe, an astonishing 90 percent jump.
Also telling, the Hispanic share of the U.S. new car market soared from 5.3 percent to 11.6 percent from 2000 through 2004, while the light truck share – which includes such things as minivans, SUVs, pickups, and truck-like crossover vehicles – jumped from 6.5 percent to 8.5 percent. Those market share figures run well ahead of the new car and truck numbers for the African-American community, at just 6.0 percent and 4.4 percent, respectively, in 2004.
The pace of growth is only increasing. From 2003 to 2005, new personal registrations among Hispanics increased by 24.4 percent according to a R. L. Polk & Co. study based on U.S. new personal vehicle registrations. By the end of 2005, new personal vehicle registrations among Hispanics stood at just over 8 percent of the national total.
"They're the fastest-growing ethnic group in the market," says independent automotive analyst Joe Phillippi, "and as they move up the earnings ladder, they'll become even more of a force." And as such, stresses Mr. Phillippi, Hispanics make up a group of potential buyers that the auto industry simply cannot ignore. Yet for years, some observers complain, that's exactly what happened. Detroit, in particular, seemed to take the Hispanic community for granted – offering its import rivals an opening they couldn't ignore.
Toyota clearly seized the opportunity last January, when its "hybrid" ad for the all-new, 2007 Camry sedan hit the air, during last year's Super Bowl. The spot got some viewers wondering whether their television sets were broken. "I didn't pay attention, at first," laughs Larry Garcia, a computer technician, and second-generation Mexican American, living in the Detroit suburbs. "But then I suddenly hear them speaking in Spanish – speaking directly to me."
The unusual, bilingual spot, focusing on the '07 Camry Hybrid's combination gasoline and electric powertrain, featured a father explaining to his son that he bought a hybrid for the same reason he speaks two languages – for the boy's future. The "cross-cultural message," Toyota Executive Vice-President Jim Farley says, "conveys that parents act to improve their children's future." But it was also meant to demonstrate Toyota's grasp of its own future.
Toyota's Super Bowl ad, along with its expanding presence in Hispanic broadcast and print media, underscores the company's diversity drive. And it also emphasizes the challenge Detroit-based carmakers are facing in the Hispanic community. "The Hispanic market has traditionally wanted to own a domestic vehicle," notes George Peterson, director of the Southern California-based market research firm, The AutoPacific Group. "But that philosophy is deteriorating today, and owning a Toyota has become as prestigious as owning a Chevy or Ford."
Perhaps even more prestigious, based on R.L. Polk data showing that in 2005, Toyota accounted for 17.3 percent of new vehicle registrations by Hispanic buyers, compared with 12.7 percent for Chevrolet and 12.0 percent for Ford. Japanese maker Nissan came in fourth, at 11.5 percent. Toyota's market share, notably, rose 2.3 percent since just 2003, while Nissan's shot up 4.3 points. Ford's, on the other hand, tumbled a disastrous 3.7 points, while Chevy's market share declined 1.4 points between 2003 and 2005.
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