Multicultural Market Holds 22 Percent of New Vehicle Sales in 2007
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Loyalty trends in multicultural market provides strategic guidance to manufacturers
SOUTHFIELD, Mich., Aug. 11 -- Though overall new vehicle registrations were down 3.3 percent in 2007, Hispanic, Asian and African-American consumers maintained 22 percent of the market, a stable level from 2006, according to R. L. Polk & Co. (TABLE 1). In this difficult U.S. auto market, addressing multicultural consumers and understanding their loyalty habits should play a critical role in vehicle manufacturers' brand strategies as they attempt to maintain and grow customers in this important segment.
"Multicultural markets have been showing growth over the past few years in an automotive market that has been in decline," said Mark Pauze, senior solutions consultant at R. L. Polk & Co. "The U.S. Census Bureau projects that Hispanics, African-Americans and Asians will comprise 33.2 percent of the U.S. population by 2010 and 36.7 percent by 2020," continued Pauze. "Automotive manufacturers cannot afford to ignore the growing importance of multicultural markets, including paying close attention to their loyalty."
Understanding Segment Loyalty Key to Maintaining Customers
Several automakers showed gains in new registrations and brand loyalty among multicultural segments, according to Polk. Toyota led in both categories for Hispanic, Asian and African-American consumers. In addition, it was the brand with the highest rate of owner loyalty in the general market during 2007 (TABLE 2). Despite these findings, Polk found that Asian consumers were typically less loyal overall, when compared to the general market. African-Americans were notably more loyal to Cadillac and Nissan, while the brands rank ninth and tenth in loyalty within the general market.
"Many manufacturers are already increasing their focus on marketing and connecting with these markets through non-traditional avenues like scholarships and supporting community activities," said Pauze. "It's important for OEMs and their supporting agencies to measure the performance of these programs against their marketing goals."
Brand messages resonate differently depending on the community you are addressing, according to Polk. Manufacturers can take an immediate action step and conduct strategic analyses of key purchase drivers. Investing in research will help them understand why a demographic remains loyal to their brand, where consumers are defecting from and defecting to as they transition throughout the marketplace.
For example, based on past research conducted by Polk, unique patterns that influence repeat buying among ethnic audiences have shown that:
-- Asian and Hispanic buyers rely heavily on family input during the vehicle selection process which introduces another dynamic for staying loyal. Strategies that include sales efforts to "the whole family" may be better suited to win repeat business.
-- Hispanic owners return to the market for a new vehicle more often than the general market. This more frequent buying cycle introduces defection risks that may not be as predominate with other buyer segments.
-- Compared to all multicultural groups, Hispanic owners are less likely to agree that they will buy from the same brand again, while Asian owners convey a higher level of intent for loyalty. Despite this, actual buying and loyalty measures show the opposite pattern which implies intentions cannot be trusted to predict actual buying behavior.
Polk's multicultural data is based on actual vehicle registrations. In addition to an in-depth analysis of vehicle owner information and geographic characteristics, Polk also gleans input from independent sources to enhance its analysis and provide detailed segmentation of Asian, Hispanic and African-American groups.
About R. L. Polk & Co.
R. L. Polk & Co. is the premier provider of automotive information and marketing solutions. Polk collects and interprets global data, and provides extensive automotive business expertise to help customers understand their market position, identify trends, build brand loyalty, conquest new business and gain a competitive advantage. Polk helps automotive manufacturers and dealers, automotive aftermarket companies, finance and insurance companies, advertising agencies, media companies, consulting organizations, government agencies and market research firms make good business decisions. A privately held global firm, Polk is based in Southfield, Mich. with operations in Australia, Canada, China, France, Germany, Japan, Spain, the United Kingdom and the United States. For more information, please visit www.polk.com.
2007 CY Registration Volumes & Shares Among
Hispanic, African-American & Asian Buyers
Combined
Ethnic
Share of Buyer
2007 New Personal Total Market
Registrations Market (%) Share
Hispanic 1,193,550 9.9
African American 848,824 7.1
Asian 643,258 5.4
22.4 %
Total U.S.
Market 11,970,329
2007 CY Loyalty Rates - Top 10 Makes
Total Market, Hispanic, African-American & Asian
Total African
Market Hispanic American Asian
1 Toyota 58.49 59.51 58.61 55.49
2 Honda 54.79 51.63 55.12 49.66
3 Ford 51.50 46.06 51.29 37.74
4 Chevrolet 50.92 45.68 50.05 36.52
5 Mercedes-Benz 49.14 45.91 49.59 43.56
6 BMW 49.01 46.36 48.96 42.25
7 Hyundai 47.71 41.91 47.48 36.90
8 Lexus 47.05 39.11 46.77 36.11
9 Cadillac 45.68 35.42 50.79 33.49
10 Nissan 45.68 50.07 51.38 34.64
Total U.S.
Market 45.62 44.21 46.24 41.63
