ONTARIO, Calif.—Could marketing to Hispanics be one way to keep the auto loan portfolio growing as new car sales decline?
Sara Hasson, SVP of auto strategy and insights at Univision Network, thinks so. Hasson noted the U.S. Hispanic market is not only is the fastest-growing in the country, but also one whose members are buying a new car about every three years, on average.
Hasson shared her insights during CU Direct’s latest State of The Credit Union Auto Lending Market report, and her comments come at a time analysts see a flatting in new cars sales growth, some saying that the pent-up demand from the recession is quickly dissipating.
“Hispanics are changing the U.S. automotive industry,” said Hasson. “They represent 34% of all new vehicle sales growth from 2014 to 2015, and this growth has been consistent over the last four to five years. This sales growth has been consistently above any other U.S. demographic.”
According to Hasson, new car sales among Hispanic consumers are expected to grow by 140% from 2010-2020, compared with 59% growth for the total new car market.
“Almost 5,000 new vehicles were purchased daily by U.S. Hispanics in 2015,” Hasson said.
Research shows that 42% of Hispanics intend to buy a new car in next five years, according to Hasson, who described Latinos as an attractive financial consumer, both in age and in income.
“Twenty-five percent of Hispanic households earn $75,000 annually,” said Hasson. “And $29,600 is the average MSRP for cars purchased by Hispanics in 2015. They are not purchasing inexpensive vehicles—$31,900 is the average MSRP for all cars sold in 2015. Latinos are driving luxury car sales growth: 10% of total luxury new vehicle sales last year went to Hispanics, representing 27% of total luxury car growth.”
Hispanics (41%), too, are more likely to buy a luxury car as a first vehicle than the total market (27%), Hasson noted.
What CUs may see as an even more attractive aspect of this car-buying segment, said Hasson, is they are young. Pointing out that credit unions are trying to get younger, Hasson said that 16% of Hispanic new vehicle owners are ages 18-34, while the figure is 11% for total car-buying market.
“You can see how important it is to connect with this new shopper,” she said.
To do that well, Hasson said credit unions need to get better at hiring bilingual employees and advertising in Spanish—something some of the big banks, such as Wells Fargo and Chase, are doing well, she said.
“Auto and banking advertisers that embrace the market with Spanish-language messaging capture majority of the growth,” Hasson said. “To grow credit union’s share of Hispanic banking, invite and educate Hispanic consumers in their language of choice. While many Hispanics see themselves as bilingual, 82% choose to communicate in Spanish.”