GM to spend big to protect its lead in minority markets

By Published on .

General Motors Corp. plans to significantly increase its ad spending in 2003 to diversity markets.

While the automaker declined to give specifics, it's expected to at least match DaimlerChrysler's Chrysler Group plan to raise its multicultural ad outlays to $140 million annually from $40 million in the next three to five years (AA, June 10). GM currently spends an estimated $60 million to $70 million annually with its Hispanic, African-American, Asian and new youth-urban ad agencies. GM's spending on women, considered part of its diversity group, could not be determined.

Gary Cowger, president of GM North America, said the company has already "dramatically" increased its minority ad budget this year by 10% vs. a year ago. "We will continue to move in that direction," he said. "It is something we want addressed and we are willing to show how big a market it is for us."

GM started consolidating its ethnic marketing last year when it combined all its Hispanic marketing accounts with Accentmarketing, Miami, and all its Asian marketing at Innovasia Advertising, Los Angeles. Interpublic Group of Cos. holds a minority stake in Accentmarketing. Early this year, all GM's African-American accounts were consolidated at Carol H. Williams Advertising, Oakland, Calif. Also in early 2002, the marketer named Vigilante, New York, as its first youth agency. Vigilante is partly owned by Publicis Groupe. Interpublic's Mullen, Wenham, Mass., is GM's women's agency.

industry leader

Miriam Muley, executive director of GM's Center of Expertise on Diversity and Growth Markets, said the automaker is the industry leader in market share to ethnic buyers. But Ms. Muley, who joined GM in spring 2001, declined to reveal its share.

According to CNW Marketing/ Research, GM sells the most new cars and trucks to Hispanics and African-Americans. Of all GM new-vehicle sales this year through August (excluding Saab and Hummer), 14.2% were to Hispanics, CNW said. Ford Motor Co. was second, with 11.7% of all its Ford, Lincoln and Mercury brand models purchased by Hispanics.

GM sold 3.31 million units in total through August and the three Ford brands sold 2.33 million, according to Advertising Age sibling Automotive News.

American Honda Motor Co. has a higher percentage of Hispanics-14.8%-buying its Honda and Acura cars and trucks than GM or Ford, CNW reports. But the actual unit sales are lower than GM or Ford because Honda sold fewer vehicles, said Art Spinella, a VP at CNW. Honda sold 844,518 units through August, according to Automotive News.

African-American buyers of GM cars and trucks through August this year represented 11.7% of all its sales, making the automaker tops with that segment, Mr. Spinella said.

CNW doesn't calculate Asian share, although Ms. Muley said Asian-Americans account for roughly 4% of the automotive industry's annual sales. Mr. Spinella said GM probably sells more cars and trucks to Asians than competitors.

Ms. Muley is currently conducting a review for GM's $3 million Asian account. Innovasia resigned the account this past summer after quietly pitching Chrysler Group successfully. "We hope very soon to have a winner," is the only comment Ms. Muley would make.

results

Innovasia, now part of GlobalHue, Southfield, Mich., handled GM's first-ever Chinese-language ads last spring for Buick. Interpublic owns a stake in GlobalHue. Ms. Muley said the ads led to an increase in Buick's sales to the target. GM's women initiatives are primarily aimed at professional females, Ms. Muley said. Women buyers account for some 6.3 million of all new annual vehicle sales, which have hovered in the 17 million unit range in recent years.

In this article:
Most Popular