“Oil Is Expected To Reach $150 A Barrel” “Sales Of New Trucks And Cars Plummet To Their Lowest Level In More Than A Decade” These are all too common headlines. What does it mean to the U.S. automaker, and more specifically, what does it mean for automotive marketers?
With the recent shift towards more fuel efficient vehicles, and the higher demand for hybrids, who are the consumers that could be buying, and how should we be targeting them during the current economic turmoil?
As we all know, the U.S. is made up of several dozen ethnic groups, outside of the African American and Hispanic communities, and over a half a dozen retain a greater median household income than that of mainstream “white” America. According to the 2006 Census figures, the top four are the South Asian at over 78K, Filipino at 72K, Russian at 67K, and Chinese at 62K, compared to mainstream “white” which is at only 51K.
Considering that those of the Indian and Chinese community are inherently more entrepreneurial than those of other ethnic groups, they are also insulated longer from the current economic downturn, compared to those of other U.S. communities. These two groups are also the fastest growing ethnicities in the U.S. today. The majority of these individuals are not so leveraged by U.S. financial institutions, Wall Street or U.S. manufacturing. Many are doctors, leading technology experts or are involved in international trade.
Leading automotive columnist Warren Brown of the Washington Post stated that, “all ethnic groups do not handle financial crisis the same way, and that being the case, car companies need to do more than just talk about the fuel efficiency of their vehicles to just mainstream “white” America…perhaps better targeting of their marketing efforts to the Asian and South Asian communities can assist them in gaining ground. Finding cultural commonalities that connect them with your brand can go a long way in gaining brand loyalty within these ethnic groups.”
According to a recent article by David Zalubowski of the Associated Press, Toyota executives stated that they are unable to meet the demand for the Prius Hybrid and other popular models. Perhaps this can pave the way for Detroit and the U.S. automaker to better market some of their lesser-known fuel-efficient vehicles such as the Chevy Cobalt, Chevy 4 cylinder 6 speed Malibu, Ford Fusion and the Dodge Caliber, to particular U.S. multicultural markets. The Asian and South Asian ethnic groups will continue to succeed, and retain a greater buying power throughout the current tough economic times. The same cannot be said for other groups much more affected by the recent economic downturn.
Global Advertising Strategies’ recent automotive research reports showed that 78% of Chinese own their vehicles and 46% plan to purchase a car by 2010, and 69% of that plan on purchasing a new one.
Within the South Asian community, Global Advertising Strategies research report showed that 68% own their vehicles, with over 61% owning more than 1 car per household, and 31% plan to purchase a new vehicle within the year. Among American made cars, Chrysler and Ford were the most popular brands with 43% and 29% respectively. Like most consumers, these ethnic groups are looking for fuel-efficiency, reliability and best price point.
These are important segments of today’s fast-growing U.S. immigrant population. According to recent Census figures presented in Ad Age’s July 7th article titled, ‘The Changing Face Of The U.S. Consumer,’ “in California and Texas, two of the largest states, more than half of household heads are either African American, Hispanic or Asian (46% of the nation’s.)” The article went on to state that “perhaps the best thing forward-looking marketing folks can do is to become more fully engaged in the national debate about marketing…Immigrants, after all, are a source of labor – and a prime source of new consumers, and that precision targeting in the future will rely more heavily on ethnographic research.”
As marketers, it is important to remember that the media these ethnic groups digest is not the same as that of mainstream America. They are not drawn to watch “Desperate Housewives,” they prefer their Bollywood movies and Chinese soap operas airing on their local networks. Media costs remain low within these communities leaving pockets of opportunity for carmakers to unload high-end inventory in a much more economically and efficient way.
Warren Brown of the Washington Post also believes that these markets represent new opportunities for the U.S. automaker to push some of their larger crossover vehicles such as the Buick Enclave, to the family units within these ethnicities. “At a time when the industry needs to unload some of their larger and luxury vehicles, they should be taking a closer look at these ethnic groups. In order to ensure a greater return of their marketing dollars, now is the time they should be embracing multicultural marketing.”
