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Hispanic Economic Growth Continues To Outpace Projections

According to data from the United States Census and the Pew Hispanic Center, the value of the Hispanic market realized a 111 percent increase over the previous decade. The value is now over $954 billion.

If you are not actively targeting the Hispanic market of your community , then I have to ask you this question: Do you want your competitor to have a firm hold on the Hispanic market when its value tops a trillion dollars? Think of it this way: How often are trillion-dollar opportunities sitting right in front of you?

According to the 2005 Consumer Expenditure Survey, Hispanic households in 2005 spent an almost 22 billion dollars on new vehicle purchases. The data also reveals that while there was an increase of 1.9 percent in spending for new vehicles in the U.S. overall, the spending for new vehicles in the Hispanic market realized an increase of 9.2 percent. Hispanics are buying more new cars and trucks.

Need more data? Take a look at the US Department of Labor table below from 2006. Averaging 1.6 vehicles per household, Hispanics have a net income 16.3 percent higher than African Americans and averages more earners at 1.6 versus 1.3 of Not Hispanic.

 

Table 2200.  Hispanic or Latino origin of reference person:  Average annual expenditures and characteristics, Consumer Expenditure Survey, 2006   

 Item

All Consumer Units

Hispanic or Latino 

Not Hispanic or Latino

Total

White and All Other Races

Black or African-American 

 Number of consumer units (in thousands) ..... 

118,843 

13,664 

105,178 

91,049 

14,129 


Consumer unit characteristics 
 
       

     Income before taxes

$60,533 

$48,108 

$62,148 

$65,417

$41,080 

     Income after taxes

58,101 

47,047 

59,534 

62,495 

40,452 

     Age of reference person

48.7

42.0

49.6

50.1

46.3


Average number in consumer units
     Persons

2.5

3.2

2.4

2.3

2.6

     Children under 18

.6

1.1

.6

.5

.8

     Persons 65 and over

.3

.2

.3

.3

.2

     Earners 

1.3

1.6

1.3

1.3

1.2

     Vehicles

1.9

1.6

2

2.1

1.3


Hispanics are growing more diverse at what they buy and where they buy it. In vehicle sales, the growth is seen from the buy here pay here to the high-end luxury lines. Non-Hispanic vehicle registrations of luxury vehicles increased 13 percent over the last five years, putting Hispanic luxury registrations at 50 percent.

Typically, the Hispanic customer views their vehicle as more than a simple transportation solution; it’s a part of their image, what they do, a full extension of their very own charisma and character. It’s a view that makes aftermarket products ideal for the Hispanic market. Like clothing, it has to feel good and reflect that extension of themselves, and they have to believe they look good in the vehicle.

Over the past year, I have been reminding you of what you most likely have all ready known from reading any news or trade source: the Hispanic market is booming, has been booming and will continue to boom well into the foreseeable future. More importantly, not only are they buying more cars, the Hispanic customer is quickly growing more savvy, becoming more willing to make comparisons and ready to spend more money.

If your business is looking for new customers with more money, make absolutely sure your dealership is fully equipped and properly trained from end to end for Hispanic market sales and service. Typical Hispanic customers aren’t just looking for a vehicle; they are looking for a relationship.  Before they buy, they will look at the whole situation—the salesperson, the dealership, the F & I department, the vehicle, and your fixed operations.

All too often, the handling of the Hispanic consumer comes up short. Management succeeds at getting the Hispanic customer in the store, the salesperson was trained, ready and found success with the Hispanic customer, and while everything looks great up to that point, it’s not.  Training did not extend any further and what happens is that once the properly skilled and trained salesperson has to inevitably pass the Hispanic customer into the hands of the unprepared and untrained everything falls apart. It could be the finance office, the accounting office, or the service department that hasn’t been trained properly, but when it happens that slice of a nearly one trillion dollar pie disappears.

I want you to go after the growth and to enjoy the ride. Just make sure your dealership is fully trained and ready. Hasta la vista.

Vol 5, Issue 3

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