Lindsay Chappell this week published a fascinating article on Automotive News USA about the growing power of Hispanic buyers in the U.S. market. I summarise it below, you can read the full article here:
What’s the weight of Hispanic buyers in the U.S. market?
- 54 million Hispanics are now living in the United States or 17% of the total population, predicted to grow to 130 million by 2060 or 30% of the total population.
- Hispanic car buyers in the U.S. are driving overall market growth and could well be the auto industry’s leading growth engine for the next 20 to 30 years. In 2014 retail sales to Hispanic consumers rose 15% vs. 6% for the overall market (Source IHS).
- Hispanic growth is now increasingly happening in the Midwest, not just traditional powerhouses California, Texas and Florida. The states with the fastest-growing Hispanic populations in the last decade were Alabama, Kentucky, South Carolina and Tennessee. U.S. cities of more than 200,000 people with the fastest-growing Hispanic populations were Charlotte NC and Raleigh NC.
Toyota has ranked as the top-selling brand among Hispanic consumers for the past decade.
Which brands are winning with Hispanic buyers?
- The “Big Three” brands of Hispanic-market sales are Toyota, Nissan and Honda. Chevrolet, Ford and Kia follow.
- Toyota has ranked as the top-selling brand among Hispanic consumers for the past 10 years and has created a dedicated corporate department to this population: the Hispanic Business Strategy Group. Hispanics purchased one of every 4 Corollas sold in the U.S. in 2014 one out of every 5 Lexus IS sold.
- Nissan brought 3 of its successful Mexico dealership groups to the U.S. to operate stores in Los Angeles, San Francisco and Houston and improve the brand’s ties to Hispanic consumers. Nissan is market leader in Mexico with 26.2% market share, and hopes that retailers from there will strike a chord of familiarity and trust among U.S. residents who moved here from Mexico in recent years.
- Honda is the No. 1 brand among Hispanic buyers in New York City and Los Angeles.
- Among Hispanic buyers, the Chevrolet Silverado outsells America’s biggest-selling pickup, the Ford F series.
The challenges that come with the growing power of Hispanic car buyers
- Many Hispanics need – or prefer – to speak Spanish. Many perceive themselves as Hispanic or Latino even after several generations of U.S. heritage, and they look for products and services that specifically address their Hispanic identity. This means additional language and cultural training for salespeople is required for regions not used to a strong Hispanic presence.
- Last year, 21% of Hispanic vehicle purchases were for a “first vehicle.” For the U.S. as a whole, the figure was just 5%. This means brands get more chances to make first impressions, but dealers must woo uncommitted new buyers.
- The average age of Hispanics today is 30, compared with 42 for non-Hispanic Americans, meaning a different approach is required to close the sale.
- The perception of Hispanic consumers seeking entry-level vehicles is becoming out of date. Last year, 24% of Hispanic U.S. households earned more than $75,000, up from 14% in 2000.