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Hispanics' Attitudes toward Car Buying - US - June 2015

“As Hispanics become more acculturated, they tend to become more sophisticated car buyers. As they use more sources of information, they become more open to considering a wider variety of car types. As this change in their approach toward car buying takes place, car brands will benefit from partnering with dealers and train sales staff to provide more of a consulting approach rather than a sales approach when dealing with Hispanics.”

–    Juan Ruiz, Senior Multicultural Analyst

This report covers the following areas:

  • Domestic brands lack positioning and are bought mostly used
  • Hispanics are pragmatic in their approach to car buying
  • Dealers are the best source of information; power should be used wisely

4% of Hispanic households currently own at least one car. While Hispanics currently tend to buy used cars, as their household income increases and as they become more acculturated, there is a shift toward increased car ownership and buying new cars. These changes create opportunities and challenges for both car manufacturers and car dealerships. While car dealers are the best source of information for Hispanics when they are researching their next car purchase, they are becoming more sophisticated car buyers and incorporating more sources of information into their research. For these reasons, car dealers will benefit from having a consultant approach rather than a sales approach when dealing with Hispanic consumers. Hispanic consumers are reluctant to trust the car dealers they do business with, and while building that trust may take time, it may become a long-lasting source of differentiation when compared to other car dealers.

Hispanics are very down-to-earth in their approach to car buying. Their preference for used cars shows that they tend to be cautious and buy only what they need and what they are sure they can afford. As the main source of information, car dealers have a lot of influence throughout the entire process. However, they have to be careful to make good use of their time in front of Hispanic clients as second chances are scarce. Car dealers are the face of the car manufacturer in front of car buyers; how they handle the “moments of truth” when they are in front of Hispanic buyers will determine whether the sale can be made and whether there is any chance of a long-term relationship. Not understanding the needs of the Hispanic car buyer and pushing cars with features they don’t need will prompt them to look elsewhere.

 

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Table of contents

  1. Scope and Themes

    • What you need to know
      • Definition
        • Data sources
          • Consumer survey data
            • Abbreviations and terms
              • Terms
                • A note on acculturation
                • Executive Summary

                    • Hispanic households buy a car as soon as they can afford it
                      • Figure 1: Household car ownership, by household income and Hispanic origin, November 2013-December 2014
                    • Majority of Hispanics gravitate toward conventional cars, but over index on other categories
                      • Figure 2: Type of vehicle household most recently acquired, by Hispanic origin, November 2013-December 2014
                    • Likelihood to buy cars that are new increases with acculturation
                      • Figure 3: Condition (new, used, or leased) of vehicle household most recently acquired, by language spoken at home and Hispanic origin, November 2013-December 2014
                    • Younger Hispanics more enthusiastic about buying a car, but may face scrutiny
                      • Figure 4: Hispanics' expected car-buying timing, by gender and age, March 2015
                    • Dealers are the best source of information
                      • Figure 5: Sources of information that Hispanics use for researching about cars, March 2015
                    • Domestic vehicles lack positioning among Hispanics
                      • Figure 6: Correspondence Analysis – Hispanics’ attitudes toward vehicles, March 2015
                    • Fuel economy is important to Hispanics
                      • Figure 7: Important factors for Hispanics when buying a vehicle, March 2015
                    • What we think
                    • Issues and Insights

                        • Domestic brands lack positioning and are bought mostly used
                          • The issues
                            • The implications
                              • Hispanics are pragmatic in their approach to car buying
                                • The issues
                                  • The implications
                                    • Dealers are the best source of information; power should be used wisely
                                      • The issues
                                        • The implications
                                        • Trend Application

                                            • Trend: Experience is All
                                              • Trend: Prove It
                                                • Trend: Never Say Die
                                                • Market Factors

                                                  • Key points
                                                    • Hispanics’ purchasing power projected to reach $1.7 trillion by 2019
                                                      • Figure 8: Purchasing power, by race/Hispanic origin, 1990-2019
                                                    • Improving labor market for Hispanics has a positive impact on their confidence
                                                      • Figure 9: Hispanic labor force participation and unemployment rate, January 2007-April 2015
                                                    • Hispanic market becoming bicultural
                                                      • Cars are staple items
                                                      • Key Players

                                                        • Key points
                                                          • Five brands dominate the car market among Hispanics
                                                            • Figure 10: Brand and condition (new, used, or leased) of vehicle Hispanic household most recently acquired, November 2013-December 2014
                                                          • Japanese brands have well-defined mission statements
                                                            • Car dealers are another key player
                                                            • Overview of Hispanics’ Car Ownership

                                                              • Key points
                                                                • Hispanic households buy a car as soon as they can afford it
                                                                  • Figure 11: Household car ownership, by household income and Hispanic origin, November 2013-December 2014
                                                                • Northeast Hispanic households least likely to own a car
                                                                  • Figure 12: Household car ownership, by region and Hispanic origin, November 2013-December 2014
                                                                • Higher household income allows Hispanics to afford more cars
                                                                  • Figure 13: Number of cars owned per household, by household income and Hispanic origin, November 2013-December 2014
                                                              • Hispanics’ Last Car Purchase

                                                                • Key points
                                                                  • Majority of Hispanics gravitate toward conventional vehicles, but over index on other categories
                                                                    • Figure 14: Type of vehicle household most recently acquired, by Hispanic origin, November 2013-December 2014
                                                                  • Likelihood to buy cars that are new increases with acculturation
                                                                    • Figure 15: Condition (new, used, or leased) of vehicle household most recently acquired, by language spoken at home and Hispanic origin, November 2013-December 2014
                                                                  • Purchases evenly split between domestic and foreign brands
                                                                    • Figure 16: Make and origin (domestic or imported) of vehicle Hispanic household most recently acquired, November 2013-December 2014
                                                                  • Foreign brands more likely than domestic brands to be bought new
                                                                    • Figure 17: Toyota Service Centers, Electrician commercial, May 2015
                                                                    • Figure 18: Brand and condition (new, used, or leased) of vehicle Hispanic household most recently acquired, November 2013-December 2014
                                                                • Hispanics’ Next Car Purchase

                                                                  • Key points
                                                                    • Younger Hispanic enthusiasts may face scrutiny
                                                                      • Figure 19: Hispanics’ expected car-buying timing, by gender and age, March 2015
                                                                    • Hispanics have many reasons to buy a car
                                                                      • Figure 20: Hispanics’ reasons for car buying, by level of acculturation, March 2015
                                                                    • Chrysler highlights new features of the 2015 Chrysler 200
                                                                      • Figure 21: Chrysler 200 "Psychic" TV ad, March 2015
                                                                    • Dealers are the best source of information
                                                                      • Figure 22: Sources of information that Hispanics use for researching about cars, March 2015
                                                                    • Bringing a piece of the success in Mexico
                                                                    • Vehicle Types Hispanics Consider

                                                                      • Key points
                                                                        • Hispanics over index on compact vehicles and minivans
                                                                          • Figure 23: Hispanics’ vehicle types consideration, March 2015
                                                                        • Brands stress convenience and style offered by their compact vehicles
                                                                          • Toyota talks about style
                                                                            • Figure 24: Design TV ad, Toyota Corolla 2015, Car logos, April 2015
                                                                          • Honda highlights the versatility of Honda Fit for Millennials
                                                                            • Figure 25: Honda, “#UnBuenFit - Discover the All-New 2015 Honda Fit with Felipe Esparza (English),” June 2014
                                                                        • Hispanics’ Car Perceptions

                                                                          • Key points
                                                                            • Correspondence analysis
                                                                              • Methodology
                                                                                • Domestic vehicles lack positioning among Hispanics
                                                                                    • Figure 26: Correspondence Analysis – Hispanics’ attitudes toward vehicles, March 2015
                                                                                  • An example of how domestic brands are not top-of-mind for most attributes
                                                                                    • Figure 27: Chevrolet Films, Car logos, March 2015
                                                                                • Hispanics’ Attitudes toward Car Dealerships

                                                                                  • Key points
                                                                                    • Perception of car dealerships puts Hispanics on the defensive
                                                                                      • Figure 28: Hispanics’ attitudes toward car dealers – Any agree, by level of acculturation, March 2015
                                                                                    • Spanish is a must to build rapport with less-acculturated Hispanics
                                                                                      • Figure 29: Hispanics’ attitudes toward importance of Spanish-language at car dealers – Any agree, by level of acculturation, March 2015
                                                                                    • For Hispanics, car dealerships can be misleading
                                                                                      • Figure 30: Hispanics’ attitudes toward dealers and trust – Any agree, March 2015
                                                                                    • Reluctance to trust car dealers increases with acculturation
                                                                                      • Figure 31: Hispanics’ attitudes toward dealers and trust – Any agree, by level of acculturation, March 2015
                                                                                    • Good reputation gives peace of mind
                                                                                      • Figure 32: Hispanics’ attitudes toward dealers and value – Any agree, by level of acculturation, March 2015
                                                                                  • The Hispanic Car Buyer’s Mind-set

                                                                                    • Key points
                                                                                      • More-affluent Hispanics more excited when buying a car
                                                                                        • Figure 33: Hispanics’ excitement when buying a vehicle, by household income, March 2015
                                                                                      • Unacculturated Hispanics more likely to consider new better than used
                                                                                        • Figure 34: Hispanics’ knowledge of what they want when buying a vehicle, by level of acculturation, March 2015
                                                                                      • Negotiating the price becomes more unpleasant as household income increases
                                                                                        • Figure 35: Hispanics’ approach toward negotiating when buying a vehicle, by household income, March 2015
                                                                                    • Important Factors for Hispanics when Buying Cars

                                                                                      • Key points
                                                                                        • Fuel economy is important for Hispanics
                                                                                          • Figure 36: Important factors for Hispanics when buying a vehicle, March 2015
                                                                                        • Older Hispanics are more price-conscious
                                                                                          • Figure 37: Importance of cost factors for Hispanics when buying a vehicle, by gender and age, March 2015
                                                                                        • Comfort and vehicle type trump looks and engine power
                                                                                          • Figure 38: Importance of design factors for Hispanics when buying a vehicle, by level of acculturation, March 2015
                                                                                        • Younger Hispanic men not as fixated on safety as others
                                                                                          • Figure 39: Importance of trust factors for Hispanics when buying a vehicle, by gender and age, March 2015
                                                                                      • Appendix – Buying Power of US Hispanics

                                                                                        • Key points
                                                                                          • Hispanics’ purchasing power growth between 1990 and 2019 is projected to be 687%
                                                                                            • Figure 40: Purchasing power, by race/Hispanic origin, 1990-2019
                                                                                            • Figure 41: Top 10 states ranked by share of Hispanic buying power, rank by Hispanic share of buying power by state, 2014
                                                                                            • Figure 42: Top 10 states ranked by dollar amount of Hispanic buying power, 2014
                                                                                          • US household income distribution
                                                                                            • Figure 43: Median household income, by race and Hispanic origin of householder, 2013
                                                                                        • Appendix – Demographic Profile of US Hispanics

                                                                                            • Key points
                                                                                              • Population trends
                                                                                                • Figure 44: Population, by race and Hispanic origin, 2010-20
                                                                                              • Hispanic share of births
                                                                                                • Figure 45: Distribution of births, by race and Hispanic origin of mother, 2002-12
                                                                                              • The Hispanic and total US population by age
                                                                                                • Figure 46: Hispanic share of the population, by age, 2010-20
                                                                                                • Figure 47: US share of the population, by age, 2010-20
                                                                                              • Characteristics
                                                                                                • Marital status
                                                                                                  • Figure 48: Marital status of people aged 18 or older, by race and Hispanic origin, 2013
                                                                                                  • Figure 49: Marital status of Hispanics, by age, 2013
                                                                                                  • Figure 50: Gender ratio, by age and Hispanic origin, 2014
                                                                                                • Generations
                                                                                                  • Figure 51: Generations, by Hispanic origin, 2015
                                                                                                  • Figure 52: Distribution of generations by race and Hispanic origin, 2015
                                                                                                • Hispanics live in larger households
                                                                                                  • Figure 53: Average household size and average number of adults and children in households, by race and Hispanic origin, 2014
                                                                                                • Hispanics by country of origin/heritage
                                                                                                  • Figure 54: Hispanic population, by country of origin/heritage
                                                                                                • Mexicans (63% of US Hispanics)
                                                                                                  • Figure 55: Number of tortilla-related products launched per year in the US, 1996-2013
                                                                                                • Puerto Ricans (9% of US Hispanics)
                                                                                                  • Cubans (4% of US Hispanics)
                                                                                                    • Dominicans (3% of US Hispanics)
                                                                                                      • Central Americans (8% of US Hispanics)
                                                                                                        • South Americans (5% of US Hispanics)
                                                                                                          • Figure 56: US Hispanic population, by country of origin/heritage, 2000-10
                                                                                                          • Figure 57: Largest* Hispanic groups, by region, by country of origin/ancestry, 2010
                                                                                                        • Hispanics by geographic concentration
                                                                                                          • Figure 58: Hispanic population, by region of residence, 2000-10
                                                                                                          • Figure 59: Hispanic or Latino population as a percentage of total population by county, 2010
                                                                                                        • States with the most Hispanic population growth
                                                                                                          • Figure 60: States ranked by change in Hispanic population, 2000-10
                                                                                                          • Figure 61: Percentage change in Hispanic or Latino population by county, 2000-10
                                                                                                        • Key Hispanic metropolitan areas
                                                                                                          • Figure 62: Metropolitan areas with the largest number of Hispanic residents, by country of origin/ancestry, 2010
                                                                                                      • Appendix – Acculturation

                                                                                                          • What is acculturation?
                                                                                                            • Figure 63: Acculturation diagram
                                                                                                            • Figure 64: Variables that affect acculturation
                                                                                                          • Why is level of acculturation important?
                                                                                                            • Levels of acculturation
                                                                                                              • Figure 65: Characteristics of primary acculturation levels
                                                                                                            • What is retroacculturation?
                                                                                                            • Appendix – Other Useful Tables

                                                                                                                • Figure 66: Hispanics’ household car ownership, by language spoken at home, November 2013-December 2014
                                                                                                                • Figure 67: Type of vehicle Hispanic household most recently acquired, by household income, November 2013-December 2014
                                                                                                                • Figure 68: Type of vehicle Hispanic household most recently acquired, by language spoken at home, November 2013-December 2014
                                                                                                                • Figure 69: Make and origin (domestic or imported) of vehicle Hispanic household most recently acquired, by household income, November 2013-December 2014
                                                                                                                • Figure 70: Make and origin (domestic or imported) of vehicle Hispanic household most recently acquired, by language spoken at home, November 2013-December 2014
                                                                                                                • Figure 71: Hispanics’ attitudes toward vehicles, March 2015
                                                                                                            • Appendix – Trade Associations

                                                                                                                • Asociación Mexicana de Distribuidores de Automotores (AMDA)
                                                                                                                  • Best Selling Cars Blog
                                                                                                                    • Center for Automotive Research (CAR)
                                                                                                                      • Association of Hispanic Advertising Agencies (AHAA)
                                                                                                                        • National Association of Hispanic Publications (NAHP)/National Hispanic Press Foundation
                                                                                                                          • National Automobile Dealers Association (NADA)
                                                                                                                            • United States Hispanic Chamber of Commerce (USHCC)

                                                                                                                            Companies Covered

                                                                                                                            • National Automobile Dealers Association (NADA)
                                                                                                                            • Nissan North America, Inc.
                                                                                                                            • Volkswagen of America, Inc.

                                                                                                                            Hispanics' Attitudes toward Car Buying - US - June 2015

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