where the cars are caliente!

American Demographics, Jan, 2000 by Cristina Merrill

The Hispanic auto market is poised to boom in the coming decades. Understanding how to reach it means tuning in to nuances of language, culture, and media habits.

Fermina Platon likes to talk about the early days of advertising cars to Latinos, a time when reaching this emerging market meant relying on little more than trial-and-error targeting strategies, scant research, and even less money. In the 1970s, Hispanic marketing was a grass-roots effort at best, says Platon, a vice president at UniWorld, a New York City-based advertising agency, where she is in charge of marketing Ford Motor Co.'s Lincoln and Mercury brands to the Latino and African American markets.

Things began to change after the 1980 Census, however, when new data was released about the growing Hispanic population. "The world discovered the Hispanic market," says Platon. Then working in J. Walter Thompson's Hispania unit, Platon remembers the excitement she felt when the Ford media director called her at the end of 1982 with a $79,000 budget tagged for reaching Latino car buyers. A paltry sum by today's standards, at the time it seemed like a pot of gold, Platon recalls. She quickly put together radio spots, and soon after convinced Ford to produce original Hispanic TV spots. "That started the automotive advertising ball rolling."

The ball has been picking up speed ever since. Hispanic Americans, who last year numbered 30.3 million, according to the Census Bureau, are poised to grow to 36 million by 2005, due to high birth rates as well as immigration. Last year, Hispanic purchasing power reached an estimated $383 billion, according to the Selig Center for Economic Growth at the University of Georgia. And cars - for many Latinos a symbol of success in this country - stand to account for a sizable share of their future spending; Standard & Poor DRI projects Hispanics will spend $18 billion this year on motor vehicles and parts, a figure expected to grow to $40.2 billion in 2010.

The decade ahead will be a high-stakes race for market dominance among car manufacturers, industry observers say. General Motors Corp.'s Pontiac division and Nissan recently hired Latino agencies of record. And Toyota, which had been gradually upping its Hispanic marketing budget, increased its spending by about a third last year, overtaking GM as the largest automotive spender, according to recently released figures from Hispanic Business magazine. The estimated $20 million it spent on media in 1999 makes Toyota the seventh-largest advertiser overall in the Hispanic market (Procter & Gamble claimed the number-one spot, with $46.2 million). GM ranks 11th, at $15 million, followed by 13th-ranked Ford, at $12.2 million.

The biggest challenge, however, will be to gain a more nuanced understanding of this particular market, which for years has been stereotyped as lacking adequate spending power or sophistication to warrant the attention of large-scale auto marketing efforts. Latino consumers, researchers say, are upwardly mobile, hungry for all types of information, in both English and Spanish, and likely to buy cars at all price levels.

A new survey for American Demographics by Arlington Heights, Illinois-based research firm Market Facts-TeleNation reveals the subtleties inherent in understanding this growing market. In the survey, conducted last November, a national sample of car buyers and a separate sample of Hispanic consumers in three of the largest Latino markets in the country - Los Angeles, New York, and Miami - were asked about the factors likely to affect their automobile purchasing decisions.

Among the most telling findings were those on media usage. Hispanics consult an average of 4.2 sources before buying a car, more than three times the national average. And they rely heavily on print media for car information: Almost 66 percent cite newspapers as an information source for cars to be bought in the next 12 months, versus just 13.8 percent of the general market; 54.2 percent say they will be turning to magazines, versus 17.5 percent of the general market; 45.3 percent cite television; and 27.9 percent say radio. In second place, after a friend/ relative (67.6 percent) is the car dealer: 62 percent of Hispanics in the survey say they'll turn to dealers to learn more about a car, while just 38.7 percent of the general market say they will do the same.

"Hispanic consumers are very information-hungry consumers," says Nancy Tellet, director of media and strategy for the Hispanic market at Messner Vetere Berger McNamee Schmetterer, in New York. "They are receptive, non-jaded, and perhaps more willing to understand marketing messages." Tellet is not alone in her assessment. "They're in the information-seeking stages of their life, not unlike the Anglos in the 1950s," explains Ernest Bromley, chairman and chief executive officer of San Antonio, Texas-based Bromley Aguilar & Associates, the Latino agency of record for Pontiac.

And many respondents in our survey said they would be consulting sources in both English and Spanish, a fact that was especially surprising to Deborah Gonderil, senior vice president of Strategy Research Corp., the Miami-based division of Market Facts that conducted the Hispanic portion of the survey. "In all three markets measured, Spanish is the language spoken at home and preferred for the interview," Gonderil says, yet 50.8 percent of respondents said that they would seek out information in English- and Spanish-language newspapers, 45.4 percent said they would turn to magazines in both languages, and 43.2 percent said the same of television channels.