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Black Consumers' 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 Black consumers’ loyalty, April 2020
Market overview
Top takeaways
Automotive loyalty and the Black consumer
Black car buyers are almost always in the market . . .
Figure 2: Black consumers’ purchasing time frame, December 2019
. . . but they’re not all shopping the same way
Figure 3: Blacks’ loyalty in automotive attitudinal segments, December 2019
The issues
COVID-19 hurts carmakers and car buyers
Auto brands are failing to capture the loyalty of Black drivers
Figure 4: Post-purchase loyalty, Black vs White, December 2019
Black consumers switch brands for advanced tech features
Figure 5: Reasons for switching auto brands, Black vs White, December 2019
The opportunities
A car is more than a car
Figure 6: Attitudes toward car culture, Black consumers indexed to total, December 2019
Give the people what they want
Figure 7: Types of vehicles, Black vs White, December 2019
What it means
THE IMPACT OF COVID-19 ON BLACK CONSUMERS’ LOYALTY IN AUTOMOTIVE
What you need to know
Figure 8: Short, medium and longer term impact of COVID-19 on auto and Black consumers’ loyalty, April 2020
Opportunities and threats
Auto purchasing will be lower on Black consumers’ priorities
Response to COVID-19 by automakers is geared toward the general market
Multicultural outreach is likely to be cut from automaker consideration
“Sea of sameness” means opportunity for automakers to stand out with something different
Figure 9: Black consumers’ attitudes toward automakers, indexed to White consumers, December 2019
Automakers and dealerships need to show that they care
Figure 10: Kia’s Accelerate the Good Program | Supporting Homeless Youth During This Crisis, April 2020
Figure 11: Ford | Built to Lend a Hand, March 2020
Automotive brands can challenge public transit
Impact on the market
US auto sales drastically affected by shelter-in-place mandates
Figure 12: Total vehicle sales (millions of units) seasonally adjusted annual rate, January 2000-March 2020
Used car sales could help mitigate the slide in the short- to mid-term
Price competition from ecommerce could erode what’s left of loyalty
Figure 13: Lincoln Remote Sales Experience: Home | Lincoln, April 2020
While sales are down, needs for maintenance and repair services could strengthen customer relationships
How the crisis will affect Black consumers
Lower incomes means lower tolerance for financial stress
COVID- 19 and the economic slowdown disproportionately impact Black adults
Figure 14: Employed persons by certain detailed healthcare, transportation and sales occupations, by race and Hispanic origin, 2019
Black workers likely to face longer road ahead to financial recovery
How a COVID-19 recession will reshape the automotive industry
US auto industry impacted by global disruption to the supply chain
Automakers are going to have to become more human
Brands and dealerships will need to work together to digitize even more
COVID-19: US context
THE MARKET – WHAT YOU NEED TO KNOW
The Black population is young and growing
Loyalty comes from functionality
Black consumers spend to stay in motion
Built trust by building credit
THE BLACK POPULATION BY THE NUMBERS
The Black population is growing
Figure 15: Population by race, 2014-24
Most Black people are under 35
Figure 16: Population by age, total and Black, 2019
Black households earn less, auto purchases have greater impact on budgets
Figure 17: Median household income, by race and Hispanic origin of householder, 2018
More than half of Blacks call the South home
Figure 18: Distribution of the Black population, by census region, 2018
MARKET OVERVIEW
The Black consumer experience in automotive
Black car buyers know what they want . . .
Figure 19: Influences on perceptions of car brands, by total and Black, April 2019
The cost of mobility
Figure 20: Household annual expenditures on transportation, by White and Black, 2018, Consumer Expenditure Survey, 2018
The cost of vehicle ownership
It’s all about the money
Figure 21: How Black consumers paid for their most recently acquired vehicle, indexed to all, October 2018-December 2019
Not here for a good time, but definitely here for a long time
Figure 22: Black consumers’ length of finance plan or lease for their most recently acquired vehicle, indexed to all, October 2018-December 2019
Trading trade wars
DRIVING LOYALTY BEHAVIORS – WHAT YOU NEED TO KNOW 
Trend Drivers help explain what Black drivers want
Figure 23: Mintel Global Trend Drivers
DRIVING LOYALTY BEHAVIORS
Assembling the automotive loyalty jigsaw puzzle
Identity: Brands and consumers can empower each other
Figure 24: Ford: Built Phenomenally – Own It, January 2020
Technology: Safety first, but not only
Figure 25: Chevrolet: A Family of SUVs, September 2019
Value: Budget is best, but tough to beat
Figure 26: CarMax Haggle-Free Creative, March 2020
THE CONSUMER – WHAT YOU NEED TO KNOW 
Automotive loyalty is hard to come by
Reliability and affordability encourage repeat purchases
New tech can prompt interest in switching
A car is more than just a car
Who’s behind the wheel?
BLACK CAR OWNERS 
Black households have (and need) fewer cars
Figure 27: Number of vehicles in household, Black vs total and White, December 2019
Sedans are simple, standard, reliable – but getting harder to find
Figure 28: Types of vehicles in household, Black vs White, December 2019
Foreign budget brands spark interest
Figure 29: Black consumers’ vehicle ownership, by brand, October 2018-December 2019
Black consumers have one foot in the market
Figure 30: Black consumers’ purchasing time frame, December 2019
Younger Black consumers are in-market
Figure 31: Black consumers’ purchasing time frame, by age, December 2019
UNDERSTANDING BLACK CONSUMERS’ AUTOMOTIVE LOYALTY
Automotive loyalty is a moving target
Figure 32: Post-purchase loyalty, Black vs White, December 2019
Brand power still needs horsepower
Figure 33: Black consumers’ reasons for buying the same auto brand, December 2019
There’s tension between fandom and freedom
Figure 34: Black consumers’ reasons for switching auto brands, December 2019
Men buy with their hearts
Figure 35: Black consumers’ reasons for switching auto brands, by gender, December 2019
Black consumers move on to move up
Figure 36: TURF analysis – brand switching motivators, December 2019
Methodology
BLACK CONSUMERS AND CAR CULTURE
Car is an extension of self
Figure 37: Black consumers’ attitudes toward car culture, indexed to total, December 2019
There’s a difference between love and respect
Figure 38: Black men’s attitudes toward car culture, index to total males, December 2019
Kids are (luckily) the future
Figure 39: Black consumers’ attitudes toward car culture, by generation, December 2019
Aspirations of luxury
Figure 40: Reasons for switching brands, Black vs White, December 2019
CLASSIFYING CAR OWNERS
Brand value is in the eyes of the buyer
Figure 41: Black consumers’ loyalty in automotive attitudinal segments, December 2019
Brand ambassadors
Brand Loyalists (24%)
Figure 42: Brand loyalty determinants, by consumer segment, December 2019
Automotive Enthusiasts (20%)
Figure 43: Brand loyalty determinants, by consumer segment, December 2019
Disloyal detractors
Disengaged Drivers (29%)
Figure 44: Brand loyalty determinants, by consumer segment, December 2019
Disillusioned Experts (27%)
Figure 45: Brand loyalty determinants, by consumer segment, December 2019
BRAND IMPACT ON BLACK CONSUMER LOYALTY
Black buyers need to know that they’re being heard
Figure 46: Attitudes toward automotive loyalty – automaker/brand relations, Black vs White, December 2019
Performance is vital, but brand has some equity
Figure 47: Attitudes toward automotive loyalty – brand value, Black vs White, December 2019
APPENDIX – DATA SOURCES AND ABBREVIATIONS
Data sources
Consumer survey data
Direct marketing creative
Abbreviations and terms
Abbreviations
APPENDIX – MARKET OVERVIEW 
Figure 48: How consumers paid for their most recently acquired vehicle, by race, Black indexed to all, October 2018-December 2019
Figure 49: Length of finance plan or lease for their most recently acquired vehicle, by race, Black indexed to all, October 2018-December 2019
Figure 50: Black consumers’ attitudes toward automobiles – NET: any agree, by gender, October 2018-December 2019
APPENDIX – DRIVING LOYALTY BEHAVIORS
Four Pillars of Automotive Loyalty
APPENDIX – THE CONSUMER 
Figure 51: Vehicle ownership, by race, October 2018-December 2019
Figure 52: Number of vehicles in Black households, indexed to total, December 2019
Figure 53: Black consumers’ purchasing time frame, indexed to total, December 2019

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