LatAm Mexico Consumers
Important global players from all continents are increasingly attracted by Mexico’s market potential. Every day new brands are introduced; this gives consumers plenty of choice, but also makes it harder for each brand to establish an emotional bond with their potential consumer.
The cultural and socio-economic variations across the population have resulted in a market with a variety of targeted brands. But this choice, added to the impact of the global economic crisis, has made the Mexican consumer more demanding and more deliberate in their thinking than ever. As a result, brands have to exceed customer expectations in all aspects, from customer service to value for money.
One of the most illuminating examples of these changes in the current Mexican Market is seen in the Automotive Industry. There is a great potential for growth in this sector since car ownership penetration is still lower than in other similar markets. Twenty years ago, there were only five brands on offer in the local market (Ford, GM, Chrysler, VW and Nissan), but with the change of manufacturing regulations and several free trade agreements with other nations, today almost all global automotive brands are available, providing consumers with more than 35 brand options and over 300 model alternatives.
As a consequence, the Mexican Automotive Market has become more competitive than ever. Furthermore, the newer players in the market such as Honda (1996), Toyota (2001) and Mazda (2005), have established important practices and standards, such as a customer experience designed to exceed expectations, uniform vehicle prices among dealers, and affordable maintenance costs.
The luxury automotive segment has experienced very high growth in recent years, with most global players represented in the Mexican market and dominated locally by German manufacturers such as BMW, Mercedes Benz and Audi. The establishment of these luxury brands has created additional challenges for the non-luxury segments that sometimes find themselves competing for the same consumer at similar price points.
Although Mexican automotive consumers may have had an emotional connection to the five brands that won their hearts over the course of the years, from a pragmatic perspective, the offering of these new alternatives has attracted their attention and challenged the long established brands.
Other important changes have also affected the industry, such as the transformation of the purchase decision-making process, which is heavily influenced by the digital world. Best practices now include differentiated facilities designed with the customer in mind, specially created sales and service processes that deliver an added value experience, and the deployment of ever-more original marketing and PR efforts.
Automotive brands have recognized that it is not enough to merely offer a vehicle; they must also deliver an ongoing customer experience that exceeds all previous expectations. Only by doing so can they compete in the battle to win – and retain – the hearts and minds of the Mexican consumer.
Managing Director, Goldfarb Consultants