Auto Market: Hispanic Consumers

Part
01
of two
Part
01

Hispanic Consumers: Customer Journey

When purchasing or leasing a vehicle, Hispanics find fuel efficiency, safety, value for money, reliability, and comfort the most important criteria in their decision-making process, and they consider websites, family, friends, and television commercials their top sources of information. There is no evidence that decision-making differs across vehicle types or that Hispanics in the Southeast region of the United States have their own decision-making process, but there is an indication that Hispanics in Miami are distinct from Hispanics in other markets such as San Francisco and New York due to differences in cultural background, dominant language, and country of origin.

PURCHASE INTENt

  • Twenty-nine percent of Hispanics are planning to purchase or lease a vehicle in the next 6 to 12 months.
  • Eighteen percent of Hispanics are planning to purchase or lease a vehicle in the next 3 to 6 months.
  • Twenty-two percent of Hispanics are planning to purchase or lease a vehicle in the next 3 months.

PREFERENCES

  • Of Hispanics planning to purchase or lease a vehicle, 76% are considering a new vehicle, while 24% are considering a used vehicle. The preference for new vehicles may be explained by the tendency of Hispanics to pass vehicles down to family members.
  • Of Hispanics planning to purchase or lease a vehicle, 47% are considering a sedan (e.g., Toyota Camry, Ford Fusion, Honda Accord), 47% are considering a small sports utility vehicle or SUV (e.g., Toyota RAV-4, Honda CR-V, Ford Escape), 37% are considering a compact vehicle (e.g., Toyota Corolla, Ford Focus, Honda Civic), 32% are considering a pickup truck (e.g., Toyota Tacoma, Ford F-150), and 19% of Hispanics are considering a minivan (e.g., Nissan Quest, Honda Odyssey).
  • The different ethnic groups show the same level of interest in sedans, small SUVs, compact vehicles, and minivans, but when it comes to pickup trucks, Hispanics demonstrate a far stronger interest. Only 24% of whites, 22% of African Americans, and 14% of Asians are considering pickup trucks.
  • When it comes to engines, 52% of Hispanics prefer gas engines, 26% of Hispanics prefer hybrid engines, 8% of Hispanics prefer electric engines, and 3% of Hispanics prefer hydrogen engines. Most Hispanics prefer gas engines for reasons related to cost and performance.
  • Most Hispanics appear to be loyal to the Toyota brand, as the brand is quite popular in ethnic markets, particularly the Hispanic, Asian, and African American markets. As of April 2018, the top-selling vehicles among Hispanics were Honda Civic, Toyota Camry, Toyota Corolla, Toyota RAV-4, and Chevrolet Silverado. Their shares of the Hispanic market were 4.7%, 3.6%, 3.6%, 3.4%, and 3.1%, respectively.
  • Hispanics tend to view Japanese and Korean vehicle brands as superior to American brands in terms of quality. In Miami, where there is a large concentration of Hispanics, Ford is largely ignored.

INTEREST in technology

  • Compared to other ethnic groups, Hispanics exhibit a stronger interest in technologically-driven vehicle types such as hybrid vehicles, electric vehicles, plug-in hybrid vehicles, hydrogen fuel cell vehicles, and autonomous vehicles. They are 19% likely to consider an alternative fuel vehicle. Forty-eight percent of Hispanics think alternative fuel vehicles are too expensive, however.
  • Forty percent of Hispanics can see themselves owning an autonomous or self-driving vehicle.

SOURCES OF INFORMATION

  • When purchasing or leasing a vehicle, Hispanics look for information in websites (75%), television commercials (46%), newspaper ads (21%), magazine articles (18%), newspaper articles (17%), magazine ads (18%), radio ads (16%), and other sources (4%).
  • Forty-six percent of Hispanics ask friends and family for information when purchasing or leasing a vehicle. This may be a result of the family-first culture of Hispanics.
  • Compared to the general public, Hispanics have a higher propensity to comparison-shop on their mobile device while at the dealership. Forty-eight percent of Hispanics use their mobile device in-store to consult reviews and rankings.
  • Compared to the general public, Hispanic vehicle buyers are 125% more inclined to use their mobile device in researching cars. They are also 39% more inclined to utilize social media in their decision-making process.
  • When it comes to ads, 79% of Hispanics give more weight to ads that mirror their culture, for example, ads with Spanish-language content or ads that reflect deeply-rooted Hispanic values.

DECISION CRITERIA

  • The five attributes that Hispanics find most important when purchasing a vehicle are fuel efficiency (63%), safety (60%), value for money (51%), reliability (50%), and comfort (45%).
  • Less important attributes include quality (37%), ownership cost (35%), durability (32%), technology (30%), interior space (27%), design (21%), cargo capacity (14%), ease of driving (13%), luxury (12%), and prestige (11%).
  • The two features that Hispanics find most important when purchasing a vehicle are engine power (63%) and functionality (55%).
  • Less important features include the navigation system (27%), the smart phone connectivity (21%), the sound system (18%), the entertainment system (10%), and the voice controls (6%).
  • For Hispanics planning to purchase or lease a vehicle, top considerations include purchase price, quality, reliability, and brand reputation.
  • While there is no evidence that the Hispanic consumer decision-making process differs across vehicle types, there appear to be differences among Hispanic vehicle shoppers depending on where they live.
  • The Hispanic market in Miami, a city in the southeastern region of the United States, is described as fairly different from the Hispanic markets in San Francisco and New York, owing to differences in cultural backgrounds, dominant language, and country of origin. In the Southeast, particularly Florida, there appears to be an uptick in the number of Spanish-speaking clientele at dealerships. Southeastern Honda reports that the number of Spanish-speaking clients they are getting is growing.

PURCHASE METHOD

  • Of Hispanics planning to purchase or lease a vehicle in the next three years, 85% prefer to do it in person, 5% prefer to do it through a mobile application, and 4% prefer to do it online. Sixty-two percent of these Hispanics are aware of the online vehicle purchasing platform autotrader.com.
  • Hispanics are inclined to be enthusiastic vehicle shoppers. They typically find negotiations enjoyable.


Part
02
of two
Part
02

Case Studies: Auto Dealerships

Ford and Kia Motors are examples of auto dealerships that have successfully marketed themselves to Hispanic consumers. Through its “Valientes De Hoy” campaign, Ford was able to attract up to 1.78 million Hispanic views. Kia’s World Cup campaign videos on social media invited a total of 7,079 reactions, 766 comments, 1,301 shares, 6.7 million reach, 9.2 million impressions, and 3.5 million video views.

“VALIENTES DE HOY”: A CASE STUDY OF FORD

  • Ford Motor Company has been a long-standing advertiser to the US Hispanic population. After launching its F-150 pickup truck model in 2018, the company wanted to amplify and tailor the messaging of the F-150 “Bravest” campaign to the Hispanic population. Thus, Ford invented a campaign to drive a favorable opinion of the US Hispanics for the new truck model.

Strategy for success

  • With the help of Univision Communications Inc. (UCI), Ford developed a campaign, which brought their 2018 F-150 creative to life by recognizing and celebrating heroes in the Hispanic community.
  • UCI was able to create a “Los Valientes de Hoy” series, also known as “Heroes of Today,” which identified brave Hispanic individuals that have overcome personal challenges to support their communities. The campaign seeks for stories of inspiring individuals and ultimately selected Lloyd Vernis, a military veteran and an entrepreneur, as the “Valiente.”
  • The campaign was also hosted by the Despierta América show, which is the number one morning show for Hispanics in the US. The series had five social videos which were distributed through Univision and Ford social media handles with the hashtag, #Valientesdehoy campaign.

OUTCOME

KIA’S WORLD CUP CAMPAIGN

Strategy for Success

  • With the help of Inspire Agency, Kia created a platform that would help the Hispanic soccer fans express themselves during the emotional moments. The company created videos, GIFs, images, and had conversations with the fans.
  • The campaign consisted of 15: and 30: TV shows, which engaged the Hispanic population and the general market; social videos shared through Facebook, YouTube, Instagram, and Twitter; live-tweeting during soccer matches; digital banners; and ongoing tween on the @KiaLatino platform.

OUTCOME

  • The social videos launched on Facebook during the campaign had the following engagement rate per post:
-A story about traditions: 1.01%
-A narrative about rituals: 0.40%
-A story about priorities: 0.60%
-A narrative of sacrifices: 0.80%
-A story of passion: 4.80%
-A narrative of instinct: 0.40%

RESEARCH STRATEGY:

In order to identify 2-3 case studies of U.S. auto dealerships that successfully marketed themselves to Hispanic consumers, our research team searched through industry and market reports that have pre-compiled lists of case studies of US auto dealerships with successful marketing history to the Hispanic population, specifically in the Southeastern States. However, this information was not available. We then reviewed through the company websites of several US dealers including Toyota, Ford, Kia, Nissan, Chevrolet, Honda, Jeep, Volkswagen, Hyundai, and Dodge for any successful case studies that target the Hispanic community in the Southeastern states. However, we failed to find the needed information on the websites.

Our next strategy was to look for successful advertising/marketing of auto dealers among Hispanics across the US. We were able to find two advertising agencies that detail the case studies of Ford and Kia. We, therefore, used the case studies as examples in our research. Our findings are outlined in the above section.

Sources
Sources

From Part 01
Quotes
  • "Hispanic shoppers will buy new autos compared to the total population. They typically pass on used cars at the dealership as they plan on passing their vehicle down to their children or other family members. Purchase price ranks high on a Hispanic consumer’s list of priorities, and they will usually put more money down for a vehicle to minimize or avoid financing altogether."
  • "Hispanics are more likely to employ comparison shopping and search inventory on their mobile device when at the dealership. According to a Today’s Auto Shoppers study, 48% of Hispanic consumers used a mobile device to research reviews and rankings while in-store, or in-dealership. Like the general market, they put quality and reliability at the top of their list but differ in that they prefer brand reputation as their second top factor."
Quotes
  • "This includes Arkansas, Alabama, Florida, Georgia, Kentucky, Louisiana, Mississippi, North Carolina, South Carolina, Tennessee, and Virginia."
Quotes
  • "An overwhelming majority of bilingual Hispanic buyers relied on mobile for most of their automotive purchase research. In fact, Hispanic buyers are 1.25 times more likely to use a mobile device to search for cars compared with the general population. "
  • "Hispanic auto buyers are 39% more likely to use social media to help decide which car to buy, demonstrating the powerful value of social media in the decision-making process for this audience."
  • "Hispanic consumers actively look for and interact with content on Twitter."
  • "Hispanic Twitter users aren’t afraid to ask questions. As a demographic group, Hispanics are the most likely to tweet about auto topics. Over one-third posted a public comment/tweet asking questions or for feedback, or privately messaged a brand with a question or requesting information. "
  • "Seventy-nine percent of Hispanics appreciate auto ads more when the ads reflect their culture. This makes them feel more connected to and understood by the brand. In addition, the culture is family-first: family plays an important role in vehicle choice and their family’s opinions are very important in the decision."
Quotes
  • "Also notable in brand results is Toyota’s strength in ethnic markets, leading that category overall, as well as Hispanic, Asian and African American markets individually."
Quotes
  • "Hispanics are heavily engaged on digital platforms as well as avid consumers of content. For example, almost half of the website traffic to Spanish-language auto websites is organic, which means that Hispanic consumers take the initiative to do research on various brands. "
  • "Research shows that a vast majority—79%—of Hispanics are more receptive to auto ads when those ads are reflective of their culture in some way. This includes ads or initiatives that involve Spanish-language content, as well as those that speak to the deeper values of the Hispanic community. "
Quotes
  • "For Hispanics, who've been typecast as loyal pickup buyers, the top three nameplates are cars. The highest-ranking pickup for Hispanics, the Chevrolet Silverado, comes in fifth. The Ford F series is sixth."
Quotes
  • "They tend to be enthusiastic shoppers. They are more likely to say the car-buying process is fun and more likely to enjoy negotiating. They also are more likely to use mobile (devices) while shopping and at the dealership, comparing prices and confirming information."
Quotes
  • "Each market is different, even when looking at the Hispanic market. The local market in Miami is quite different than the markets in San Francisco, New York or any other. There are numerous factors including language (Spanish versus English), to cultural backgrounds and differences in country of origin or individuals or family (U.S. born, 3rd generation is different from 1st generation family recently arriving from Guatemala) can be significantly different. "
  • "In some markets, the big sellers may be the less expensive vehicles, while in many cases the Hispanic market is purchasing high end luxury cars. (Example from Lexus below) These are the details that local/regional dealerships understand."
Quotes
  • "We are getting more clientele that speak Spanish every day."
Quotes
  • "Many of the Hispanic customers I speak to on a daily basis in Miami are very concerned with reliability, and they tend to perceive the Japanese and Korean brands as being of higher quality than Ford — they even prefer GM to Ford in most cases. "
  • "Hispanic shoppers also tend to be more reliant on the recommendations or advice of friends, and for all intents and purposes, Ford is invisible in Miami. If your neighbors don’t own any, and you rarely see them on the streets, you’re much less likely to buy one when it’s your turn to go shopping."