Automakers are locked in an intense battle for the loyalty of these buyers. Research confirms that Hispanics have traditionally been quite brand loyal; in the car market they have favored domestic brands such as Ford and Chevrolet. But that’s shifting, according to Mr. Campana.
"It’s changed in the last 10 years," he says. "The switch from domestic brands to Toyota and Honda is a reflection of the perception of value [among] Hispanic buyers."
Mr. Santiago echoes that sentiment. "If a Hispanic family buys [a Honda] Accord," he comments, "it’s a sign saying 'I have arrived.' However, in the truck segment, Ford still seems to dominate."
Data from Doublebase MediaMark Research documents a preference for imports over domestics (see table - "Brands Purchased"). Also, South Korean brands are making distinct inroads, especially among youthful Hispanics who place a high priority on price, although some uncertainty remains about the quality and long-term value of marquees like Hyundai and Kia. Young buyers are the least likely to be brand loyal, the research indicates. That’s especially significant, Mr. Larson emphasizes, because in the West Coast region, 75 percent of the Hispanic population is 35 or younger. For dealers, marketers, and manufacturers, that presents a great opportunity to make a first – and potentially lasting – impression.
Upscale Hispanics tend to reflect trends of the overall U.S. automotive marketplace. This year’s survey of Hispanic Business 500® CEOs found that the European brands, particularly German cars, clearly function as status symbols. In the survey, 23 percent of respondents are Mercedes-Benz owners, while another 9 percent drive BMWs (see article: "For the Renaissance Driver"). Lexus accounts for another 14 percent of respondents’ vehicles. Among domestics, Ford ties the Lexus in second place at 14 percent, while Cadillac measures up against BMW at 9 percent. When CEOs were asked to name their dream cars, the top brands were Aston Martin, Lexus, and Mercedes-Benz.
Considering the clout and car-consciousness of the Hispanic market, it comes as no surprise that automakers are stepping up efforts to reach Hispanics. Between 2000 and 2001, Ford increased its Hispanic marketing budget by 263 percent, General Motors by 82 percent, and Hyundai by 160 percent, according to the Hispanic Business Top 60 Advertisers directory (December 2001). Chrysler recently shot five Spanish-language TV commercials for products including the Neon sedan and Ram pickup. The automaker has increased its ethnic advertising budget to $210 million, though that covers other groups besides Hispanics.
On the dealer front, January 2002 marked the founding of The National Hispanic Automobile Dealers Association. The powerful National Automobile Dealers Association plans to pay more attention to Hispanics (see "Opposition to Auto Group Grows," Market Watch, May 2002). Ford Motor Hispanic Dealers Alliance hopes to help Hispanic entrepreneurs acquire more of the company’s outlets.
Automotive executives can no longer ignore the buying power of Hispanic motorists. Manufacturers and retailers alike are scrambling to get their brand messages to the right segment of the Hispanic market. The potential stakes are huge, and there’s no guarantee who’ll win – except the Hispanic consumer.
Paul Eisenstein is editorial director and publisher of www.thecarconnection.com.
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