||Automakers Reach Out to Minorities
General Motors Co. slashed its marketing and outreach efforts to minority customers during and immediately following its 2009 bankruptcy.
But as it has returned to a position of strength, the automaker has renewed its focus on multicultural car buyers.
It is aiming to connectwith Hispanic buyers through its "Broken Fence" commercial for the 2014 Chevrolet Silverado, which features a rancher who goes looking for a lost calf. It is targeting African-American consumers through a spot showing R&B singer John Legend driving a Chevrolet Impala; it was created by Spike Lee's ad agency. And last year, it reached out to gays and lesbians with a print ad for the Chevrolet Volt that announced, "Mom, Dad, I’m electric."
GM isn't alone in its efforts to target multicultural customers. Automakers -- domestic and foreign -- know there is a growing market they can't ignore. They are reaching out through advertising, social media and sponsorships. Some are increasing the number of minority-owned dealerships. And they are diversifying their own workforces to better understand their customers.
Minority consumers -- African-Americans, Asians and Hispanics -- bought one in four new vehicles in the U.S. through the first half of the year, according to Polk, an auto data company. Their share of the new-car market is expected to grow by another 3.5 percentage points by 2016, to nearly 28 percent, Polk says.
"When you look at 24 percent of the market, that is too big not to pay attention to," said Marc Bland, vice president of diversity and inclusion for Polk.
Minorities make up 37 percent of the U.S. population; by 2043, the U.S. Census Bureau projects the minority population will become the majority. The African-American population will grow by about 20 million, while Asian and Hispanic populations are projected to more than double by 2060, when 1 in 3 U.S. residents are expected to be Hispanic, according to the census bureau.
Foreign auto brands command the highest share of ethnic consumers based on sales volume, with Toyota ranking first with 17.7 percent through the first half of 2013, followed by Honda, Nissan, Ford and Chevrolet.
'Very high priority'
Chrysler Group LLC's Juan Torres, head of multicultural advertising and marketing, said the Auburn Hills-based company's percentage of multicultural customers is growing.
"This is a very high priority for Chrysler and it's always been," he said. "Multicultural consumers are pretty much transforming the mainstream."
The company has marketing focuses for African-American, Asian and Hispanic populations. Campaigns are brand-specific, and geographies also shape strategies, Torres said.
For example, Fiat has a marketing campaign in Miami, the No. 2 market in the country for small cars. With 65 percent of the Miami-area market Hispanic -- largely Cuban and South American -- Torres said the brand's local ad campaigns aim to reach those customers. Billboards read "Little Havana, Meet Little Italy" and "From Mama Mia to Madre Mia." Cuban-American rapper Pitbull has a partnership with Fiat.
Chrysler also is putting more time and money in mobile advertising to reach multicultural buyers and young buyers through their early 30s, Torres said.
"Mobile will continue to be a big, critical piece of what we do, especially for that millennial target, because if you think of who the millennial consumer is in this country, 44 percent of that population is multicultural," Torres said.
Shawn Thompson, multicultural marketing manager for Ford and Lincoln's African-American strategy, said the carmaker remained committed to its African-American related sponsorships during the economic downturn and never canceled an event. Ford sponsors five major events in the African-American community, including the Essence Music Festival and the Neighborhood Awards by Steve Harvey.
GM is focusing diversity outreach toward African-Americans, Hispanics, Asians, women and members of the military, as well as the lesbian, gay, bi-sexual and transgender communities. Paul Edwards, GM's executive director of global marketing, said the company's Cadillac, Chevrolet and Buick brands sponsor many African-American and Hispanic events.
"Partnering with key diversity-focused organizations allows GM to foster loyal customer relationships and gain greater product exposure," Edwards said in a statement.
Not doing enough?
But some minority advocates say automakers aren't doing enough when it comes to adding minority dealerships and buying supplies and services from minority companies, even as vehicle sales to minority consumers grow.
"As the (minority) population continues to grow, the investment is not commensurate with the population growth," said Glenda Gill, executive director of the Rainbow PUSH Automotive Project. "You've got to make an investment in these communities and with these ethnicities. What we see is sponsorship and sponsorship at levels around activities, but no real deep-dive of an investment. Because we are the profit trajectory of most companies, we sustain their businesses."
GM said it has made changes such as expanding its diversity communications staff; it recently hosted its first Hispanic media summit. The company also has better aligned diversity efforts across its four brands, marketing and public policy, which it lacked before.
With a new direction since bankruptcy, not only are GM's executive ranks the most diverse than they've ever been, but GM is hiring people that represent the faces of those who buy its vehicles, said GM North America President Mark Reuss.
"We sold and recruited as a company that sold trucks in the Midwest. And that was it," Reuss said earlier this month at the Rainbow PUSH Coalition's Global Automotive Summit in Detroit. "We have an opportunity to rebuild the company in the coasts and the southern parts of the United States, but also some of the more traditional areas like New York City and Los Angeles, where the diversity and the population is no longer minority. The minority is really becoming the majority.
"So we have an opportunity to get that thinking into a company that traditionally was very bureaucratic, very white male oriented and really start to reflect in our products, our sales and our marketing, what the United States, and Canada and Mexico frankly, have become today and in the future."
(Source: The Detroit News, 10/21/13)
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