Hispanics' Loyalty in Automotive: Incl Impact of COVID-19 - US - April 2020

OVERVIEW
What you need to know
Key issues covered in this Report
Scope
EXECUTIVE SUMMARY 
Figure 1: Short, medium and longer term impact of COVID-19 on auto and Hispanics’ loyalty, April 2020
Market overview
Top takeaways
Issues and opportunities
Hispanics are particularly vulnerable to the economic effects of COVID-19
Brands can offer support and develop a relationship during difficult times
Figure 2: Hispanic vehicle owners who keep their cars until needed to replace, indexed to all, February 2020
Figure 3: Hispanics who serviced/repaired vehicle at car dealerships, indexed to all, October 2018-December 2019
Technology needs to be put in context of overall value
Figure 4: Hispanics’ auto brand switching motivators, indexed to all, February 2020
Communication is key to understanding Hispanics’ needs
Figure 5: Hispanics’ attitudes toward automakers, indexed to all, February 2020
What Hispanics want and why
THE IMPACT OF COVID-19 ON HISPANICS’ LOYALTY IN AUTOMOTIVE
What you need to know
Figure 6: Short, medium and longer term impact of COVID-19 on auto and Hispanics’ loyalty, April 2020
Opportunities and threats
The market calls for a more personal approach
Brands have more time to make their case
Figure 7: Toyota Latino Facebook video post, March-April 2020
Figure 8: Mid-South Ford Dealers Facebook video post, March 2020
Impact on the market
US auto sales drastically affected by shelter-in-place mandates
COVID-19 can prompt Hispanics to review their transportation needs, opt for a car
Longer term auto sales impact of COVID-19 will be bleak but not awful
Post-pandemic auto repairs to be a boon to service and maintenance providers
Figure 9: Toyota USA Facebook video post, April 2020
How the crisis will affect Hispanic consumers
Hispanics’ occupations make them more vulnerable to economic downturns
Figure 10: Employed persons by certain detailed healthcare, transportation and sales occupations, by race and Hispanic origin, 2019
Spanish-dominant Hispanics are more at risk
Circumstances require Hispanics to have a pragmatic approach toward car ownership
Potential shift toward sedans
How a COVID-19 recession will reshape the automotive industry
Auto industry impacted by global disruption to the supply chain
Dealerships will need to continue to digitize
COVID-19: US context
THE MARKET – WHAT YOU NEED TO KNOW
Hispanics are more likely to express intentions purchase a car within the next 12 months…
…yet, they own fewer vehicles on average
Four groups of Hispanics express loyalty in automotive differently
Hispanics’ finances dictate some pragmatism
THE HISPANIC CAR BUYER PROSPECT
Hispanics overindex for being in buying mode
Figure 11: Hispanics’ next car purchase timeline, indexed to all, February 2020
Figure 12: Hispanics’ next car purchase timeline, by language spoken at home and household income, February 2020
Figure 13: Hispanics’ next car purchase timeline, by marital status, February 2020
NUMBER OF VEHICLES OWNED 
Hispanics own fewer vehicles
Figure 14: Number of vehicles in Hispanic households, indexed to all, February 2020
Figure 15: Number of vehicles in Hispanic households, by area, indexed to all, February 2020
Figure 16: Being in a car with more than one person, by Hispanic origin and household income, April 2018-June 2019, October 2018-December 2019
THE MARKET – AUTOMOTIVE ATTITUDINAL SEGMENTS
There are four ways Hispanics relate to automotive brands
Figure 17: Hispanic automotive attitudinal segments, February 2020
Worry-free Drivers (22%)
Who are they?
Figure 18: Profile of Worry-free Drivers, February 2020
Brand Partners (24%)
Who are they?
Figure 19: Profile of Brand Partners, February 2020
Brand Embracers (29%)
Who are they?
Figure 20: Profile of Brand Loyalists, February 2020
Brand Learners (25%)
Who are they?
Figure 21: Profile of Brand Learners, February 2020
MARKET FACTORS 
Lower median household income pushes Hispanics toward pragmatism
Figure 22: Median household income, by race and Hispanic origin of householder, 2018
Figure 23: Median income of all US households and Hispanic households, in inflation-adjusted dollars, 2007-18
Figure 24: Household income distribution, by race and Hispanic origin of householder, 2018
Figure 25: Household annual expenditures on vehicle purchases, by race and Hispanic origin, 2018
WHAT’S DRIVING BEHAVIOR – WHAT YOU NEED TO KNOW 
Value: The internet will shape loyalty and how people buy cars
Experiences: Down-to-earth experiences is key to drive relevance
Technology: Technology generates attention
WHAT’S DRIVING BEHAVIOR
Figure 26: Mintel Trend Drivers
Trend Driver: Value
Using the internet to reshape value and loyalty with it
Figure 27: Cargurus.com Facebook post, March 2020
Figure 28: TrueCar.com online ad, February-March 2020
Trend Driver: Experiences
Using down-to-earth experiences to drive engagement
Figure 29: Attitudes toward experiences with car, Hispanics indexed to all, October 2018-December 2019
Trend Driver: Technology
Using technology to start the conversation
Figure 30: Vehicle most recently acquired – features, by Hispanic origin and household income, October 2018-December 2019
THE CONSUMER – WHAT YOU NEED TO KNOW 
Loyalty is fragile
Hispanics lag for owning SUVs and pickup trucks
Hispanics are not as attached to their cars
There isn’t one single factor that would prompt Hispanics to look elsewhere
HISPANICS’ LOYALTY IN CONTEXT
Are Hispanics brand loyal?
Figure 31: Hispanics’ car brand purchases – second most recently acquired brand, by most recently acquired, October 2018-December 2019
Loyalty helps create a positive narrative around the brand
Figure 32: Hispanics’ attitudes toward car brand preferences and expectations, indexed to all, February 2020
Brand reputation keeps brands in the consideration set
Figure 33: Hispanics’ attitudes toward automotive brand perceptions, indexed to all, February 2020
Price x brand = value
Figure 34: Hispanics’ attitudes toward price vs brand, indexed to all, February 2020
Hispanics want to see more before pledging loyalty
Figure 35: Hispanics’ attitudes toward automakers, indexed to all, February 2020
Figure 36: Vehicle Hispanics most recently acquired – new vs used, indexed to all, October 2018-December 2019
Figure 37: Place where Hispanics serviced/repaired vehicle, indexed to all, October 2018-December 2019
TYPES OF VEHICLES OWNED
Hispanics aren’t following general market car buying trends
Figure 38: Types of vehicles Hispanic households have, indexed to all, February 2020
Can different car types drive loyalty?
The case of SUVs
Figure 39: Hyundai Facebook post inviting for a test drive, January-February 2020
The case of pickup trucks
Figure 40: Toyota Facebook post for Tundra 1794 Edition CrewMax, January-February 2020
The case of minivans
Figure 41: Chrysler Facebook post for Pacifica Hybrid, February-March 2020
Figure 42: Types of vehicles Hispanic households have, by automotive attitudinal segments, February 2020
Figure 43: Types of vehicles Hispanics households have, by language spoken at home and household income, February 2020
EMOTIONAL CONNECTION TO THEIR CARS
Hispanics lack an emotional connection with their cars
Figure 44: Hispanics’ emotional connection to cars, indexed to all, February 2020
Figure 45: Hispanics’ emotional connection to cars, by automotive attitudinal segments, February 2020
Older Hispanics are more appreciative of their current vehicles
Figure 46: Hispanics’ desire to keep their cars longer, by age, February 2020
Passion for driving makes loyalty difficult
Figure 47: Hispanics’ auto brand switching motivators, by driving enjoyment, February 2020
Spanish-dominant Hispanics embrace fluidity of US auto market
Figure 48: Hispanics’ closeness to their vehicles, by language spoken at home, February 2020
SWITCHING MOTIVATORS
It’s about creating curiosity
Hispanics are a forgiving bunch
Figure 49: Hispanics’ auto brand switching motivators, indexed to all, February 2020
Figure 50: Hispanics’ auto brand switching motivators, by automotive attitudinal segments, February 2020
The arrival of children prompts Hispanics to re-evaluate car brands
Figure 51: Lifestyle change as Hispanics’ brand switching motivator, by presence and age of children in the household, February 2020
APPENDIX – DATA SOURCES AND ABBREVIATIONS
Consumer survey data
Terms
A note about acculturation
APPENDIX – DEMOGRAPHICS 
There are 61 million Hispanics in the US
Figure 52: Population, by race and Hispanic origin, 2014-24
The Hispanic market is young
Figure 53: Hispanic share of total US population, by age, 2018
Hispanics live in larger households
Figure 54: Average number of people per household, by race and Hispanic origin, 2018
Figure 55: Households with related children, by race and Hispanic origin of householder, 2018
Hispanics overindex for living in urban areas
Figure 56: Hispanics’ share of total population in urban, suburban and rural areas, 2016
APPENDIX – CONSUMER DATA 
Figure 57: Vehicle most recently acquired – new vs used, Hispanics by household income, October 2018-December 2019