According to a study from IHS, Hispanics will account for more than 40% of employment growth in the next five years and more than 75% between 2020 and 2034. Employment growth translates to more sales and more people buying products or services.
There are many industries that will benefit from Hispanics, and one of the biggest will be the automotive industry.
It is estimated that 42% of the Hispanic market has a household income of $50K and it is growing at faster rate compared to the general market.
Hispanic households are larger than non-Hispanics (3.6 vs. 2.4). It is common among their culture for many Hispanic Millennials to be still living with their parents. This fact alone presents an ideal opportunity for car dealers to sell more cars to the same household and get more referrals.
According to IHS Automotive Polk market, Hispanics currently represent more than $44 billion dollars in new vehicles sales. The total industry sales increased 5.9% last year. But, the amount of Hispanic consumers rose 15%, attributing to more than 250,000 sales.
Compared to general market, Hispanics are 60% more likely to be buying their first new vehicle and 52% more likely to add an additional new vehicle to their household, according to Polk. So, we can easily say that Hispanics will fuel the growth of the automotive industry in the coming years.
In the luxury automotive segment, Hispanics represented $7.5 billion in new vehicle spending in 2014 vs. $6.4 billion in 2013. They outpaced the total market in new vehicle sales growth (14% vs. 7% in 2014) and they represented 17% of total luxury brand growth compared to 9.5% of the total market. Hispanics are 25% more likely to buy a luxury vehicle as their first new car purchase than the total market.
As Hispanics become more immersed in the American way of life, Hispanics are also acquiring a taste for cars that not only are reliable and fuel-efficient but also offer the best features and comfort. It is important to understand that even though this target group may prefer to speak English, Anglo campaigns are NOT the way to engage and capture this target audience. Hispanics are acculturated but will never be fully assimilated. So, assuming that the English language will convey the message and relate to this intricate group, it is the biggest mistake that a brand can make. Cultural nuances and message approach are key elements that will determine the success of a campaign. Engage with this audience the right way and you will rev up sales now and build a loyal customer base for the future.