The automotive industry has seen unprecedented growth over the past four years. However, this would not have been possible without the purchasing power of diverse ethnic groups. According to Damon Lester, President of the National Association of Minority Automobile Dealers (NAMAD), thirty percent of new vehicle purchases are made by multicultural consumers, a considerable amount. However, the issue that has been facing the automotive industry is a lack of diversity inside dealerships. Diverse representation is low with only six percent of dealerships in the United States that are minority owned. With approximately 18,000 dealerships in the country, just over 1,100 have an owner from a minority group.

The Diversity Volume Leadership Awards

As a result of this problem, NAMAD and IHS Markit joined forces to create the Diversity Volume Leadership Awards (DVL). In its third year, DVL’s purpose is to create awareness around the lack of diverse dealership leadership and acknowledge automakers that make it a priority to attract minority consumers. The most coveted and sought-after award at the ceremony is the “Top Overall Ethnic Vehicle” DVL Award. It is given to the brand that has sold the most vehicles to an ethnic group. This year’s winner was American Honda, their second year winning the prestigious prize.

Honda’s Attention to Diversity

American Honda has created a number of initiatives to reach out to diverse groups of consumers. Honda sponsors Georgia’s Battle of the Bands, an event that brings marching bands from various Historically Black Colleges and Universities (HBCUs) to compete for the title of “Best Band.” Through the competition, Honda awards $200,000 in grants to students of these universities. The company has developed a scholarship fund for Hispanic students, a Collegiate Women’s Sports Award, and the Campus All-Star Challenge that has awarded more than $8.5 million in grants to HBCU students since 1989. In addition to winning the top award, Honda also won six more including highest ethnic volume leader in the Mideast region.

According to the press release, Honda was not the only automaker to be recognized at the event. General Motors received the most awards with 11, Toyota and Lexus were second at nine, with Honda rounding out the top three at six. This year was a standout due to the ceremony’s inclusion of an LGBT and ethnic motorcycle category that awarded a volume leadership award to brands with increased units sold to these groups.

Minority Car Buying Trends Tell a Story

The event is also an opportunity to gather information on auto purchasing trends of various ethnic and minority groups. For example, The Top Women’s Vehicle was the Toyota RAV4, while The Top Ethnic Millennial’s Vehicle award went to the Honda Civic. Data from last year has shown that more millennials are purchasing larger cars, but those who belong to a minority group seem to be sticking with smaller passenger cars. In fact, most of the volume leadership winners went to smaller sedans such as the Toyota Camry, Honda Civic, and Chevrolet Cruze. Even the winning Crossover models were smaller and more compact (i.e., the Buick Encore and Toyota RAV4). Many individuals may be purchasing larger cars, but the story is different for ethnic and minority groups.

For three years, the DVL has brought attention to the purchasing power of ethnic and minority groups, and demonstrated the importance of marketing and reaching out to these individuals. With only six percent of dealerships owned by a person belonging to a minority group, NAMAD and IHS Markit hope this event will increase the percentage of representation. As populations become more multicultural the need for diverse dealers, and creative marketing to these groups will increase. The DVL Awards are a step toward making these goals even more of a priority.

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