Looking to Grow Market Share for Your Brand?

Today’s auto world is ripe with new opportunity for marketers since some brands have permanently left the scene and others have reduced their investment. The question is: which will be the ones to significantly grow their share of market? Chances are it’ll be those that make Hispanics – the youngest and fastest-growing consumer segment in the nation – a business imperative.

This year’s Census shows that Hispanics have accounted for more than half of the U.S. population growth over the last 10 years. Over the next five years, it’s projected that the Hispanic 18-49 year-old population will grow 13 percent versus the essentially flat non-Hispanic segment. By 2015, 1 out of every 5 adults 18-49 will be Hispanic. So what does all this growth mean for the auto industry?

Jim Lentz, President and CEO of Toyota, summed it up nicely at this year’s NADA Convention and Expo: “We have to work hard to make sure we’re meeting the needs of our Hispanic customers, because they are definitely going to be a big part of our growth in the future.”

In order to meet those needs, marketers first have to understand who Hispanic consumers are and what they look for in their vehicles.

First, Hispanics are rapidly becoming the new middle class. This is evidenced in their buying habits. With an average base M.S.R.P. of $28,347 ($29,962 for non-Hispanics), Hispanic purchase patterns and segment preferences are at virtual parity with non-Hispanics. Midsized cars are most popular with Hispanics, making up nearly 20 percent of new vehicle sales.

Many marketers are surprised to hear that the sixth volume segment to Hispanics is entry-level luxury. Looking to seize the trend, Mercedes Benz sponsored the World Cup in major Hispanic markets for the first time last year.

Hispanics also over-index in their appreciation of and desire for style as compared to non-Hispanics. They say “my car should express my personality” (index: 118), choosing a car mainly on looks is important (index: 116) and my car should “catch people’s attention” (index: 122).

Where Hispanics do differ dramatically from non-Hispanics is in their culture, traditions and media consumption. To win any consumer’s loyalty and wallets, you must do your research and connect with them in a culturally relevant way. With 78 percent of today’s Hispanics choosing to speak Spanish at home, marketers must also understand that language is a powerful tool. Hispanics who are Spanish dominant and bilingual choose to consume Spanish-language media for content they can’t get anywhere else, including news, soccer, music and novelas. In fact, 42 of the Top 50 TV shows in 2010 viewed by bilingual Hispanics Adults 18-49 were in Spanish.

One marketer that capitalized on this was General Motors, a long-time pioneer in marketing to Hispanics. GM recognized that, as one of the top rated programs on network TV, the primetime novela “Eva Luna” could deliver a large and engaged Hispanic audience. So, GM integrated three vehicles – the Chevy Cruze, Chevy Traverse and Buick Regal – into multiple storylines throughout the novela’s run. One of the plotlines involved the lead actress winning the Buick Regal account for her advertising agency. The ad created by her team within the show was used as the first real-life, Spanish-language commercial for the Buick Regal.

In addition to GM, several auto marketers – including Toyota, Honda, Nissan and Ford – have recognized the value of Hispanic audiences and consistently spend 8-12 percent of their overall budget on Spanish-language media. These five brands account for more than 64 percent of new vehicle sales to Hispanics.

Volkswagen, a more recent entry into Hispanic marketing, has also committed significant resources to Spanish-language media – and they are reaping the benefits. In the fourth quarter, Jetta Hispanic sales were up 77 percent year over year – represenwn 16 percent. This success was propelled by Volkswagen’s presence in last year’s World Cup and the Spanish-language launch efforts for Jetta.

Knowing that Hispanics represent anywhere from a quarter to more than half the population in key markets across the country – and that the population is becoming less concentrated – manufacturers, dealer groups and individual dealers can also change the fortune of their business by talking to this consumer.

David Hruska of Mossy Nissan in West Houston did just that. Six months after he launched his first Hispanic campaign in March 2009 using former Univision anchor Antonio Hernandez as a spokesperson, Hruska’s salespeople started requesting more bilingual staff and resources. Mossy Nissan jumped from fifth to first highest-volume Nissan dealership in town. Last year, he remained number one. Hruska shared: “Do I have something to calibrate my success by? I guess!”

You can, too, by starting your engines – I mean, marketing campaigns – with Hispanics…and putting them into overdrive.

By: Paul Sellers, Vice President of Automotive at Univision Communications Inc.