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Missed Opportunities

Asian Americans fit a relatively specific buyer profile, and new research has identified what this segment is looking to purchase within the automotive sector.

February 2014, F&I and Showroom - Feature

by Stephanie Forshee - Also by this author

Between J.D. Power and Associates’ Western Automotive Conference in November and the latest findings from Nielsen, the automotive industry would be well served studying the buying habits of Asian-American consumers.

During a panel discussion on multicultural marketing at the J.D. Power event in Los Angeles, Danielle Austen, managing partner with Team Ignition Pancultural Marketing, a Nashville, Tenn.-based marketing agency, said the conversation among marketers has shifted from why to how to reach ethnic consumer groups. But she noted that marketers have yet to fully tap into the Asian-American market.

“We have probably more recently in the past five to seven years had much of our information [focus on] the U.S. Hispanic customer, but African American and Asian are probably the biggest gaps and opportunity,” Austen said.

Nielsen’s new research report, “Significant, Sophisticated and Savvy: The Asian American Consumer 2013 Report,” recommended that dealer marketers focus on luxury and eco-friendly vehicles when marketing to that consumer group.

According to the report, about 23% of Asian Americans purchased cars retailing for more than $30,000 vs. 19% of the general population. “That higher price point is reflected in the vehicle features that they prefer,” the report stated. “Asian Americans were 13% more likely to pick ‘luxury and style’ and ‘green and trendy’ as the description of their ideal car vs. total U.S. population.”

The report also found that 67% of Asian Americans look forward to technology advances in new vehicles, while 32% buy vehicles to reflect their commitment to support the environment — the latter finding linked to Asian-American consumers placing a high priority on saving money and energy. The report shows the segment is twice as likely as the total population to own a hybrid or electric plug-in vehicle, with nearly 17% of Asian-American households owning one of these types of energy-efficient cars. 

“Although these cars are often sold at a higher price point than other models, they use less gasoline and offer long-term savings,” read the report, in part. “Asian Americans are twice as likely as the general population to say that within the next 12 months, they want to buy or lease a hybrid or electric plug-in vehicle.”

Paying more for a vehicle is noteworthy given that Asian Americans tend to be thrifty across all other retail industries. “Spending 33% of their dollars on deals compared to 27% for non-Asians, Asian Americans are interested in getting value for their money but will not sacrifice quality for price,” the report stated. “Marketers should explore various deal offerings when trying to attract this segment.”

Asian Americans are also the leading segment for online buying, with 70% of the Asian population having made an Internet purchase in the past year vs. 61% of the general population.
As for reaching this buying segment, Nielson’s report offered this advice: “Marketers should seek to understand the uniqueness of this powerful segment and offer culturally relevant, in-language materials that can connect directly to Asian Americans.”

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