The Human Rights Campaign Foundation has released an analysis highlighting the substantial consumer power wielded by the LGBTQ+ community and people of colour in the automotive sector. This analysis uses data from S&P Global Mobility to underline potential financial repercussions for major car manufacturers, particularly Ford and Toyota, following their recent decisions to reduce initiatives focused on diversity, equity, and inclusion (DEI).
Current estimates suggest that around 30% of Gen Z adults identify as LGBTQ+, contributing to an impressive overall spending power of $1.4 trillion within this demographic. The effect of such a demographic's potential backlash against companies that decrease their DEI efforts could be profound. According to findings from the August 2024 HRC Foundation LGBTQ+ Climate Survey, 80% of LGBTQ+ consumers indicate that they are willing to boycott brands that have scaled back their inclusion initiatives. Furthermore, over half of these individuals stated they would seek to encourage others to join them, either through social media platforms or by posting negative reviews about the companies.
Highlighting the economic weight of these communities, the S&P Global Mobility data reveals the significant share of new vehicle purchases attributed to LGBTQ+, Black, Asian, and Latine Americans, which constitutes one-third (34.8%) of all new vehicles sold in the U.S. since 2020. This totals more than 19.3 million vehicles, with LGBTQ+ Americans alone acquiring over 2.6 million vehicles in that time frame. The breakdown of purchases includes substantial numbers from diverse racial groups: 4,453,655 vehicles purchased by African Americans, 9,039,323 by Latine Americans, and 3,816,686 by Asian Americans.
The estimated economic impact of the LGBTQ+ community’s spending on vehicles highlights a cumulative expenditure of approximately $103 billion since 2020. Chevrolet leads the way as the top choice among LGBTQ+ consumers, with a spend of $12.3 billion, followed closely by Ford at $12.2 billion (plus an additional $1.2 billion for Lincoln vehicles) and Toyota at $11.1 billion (with an extra $2.8 billion on Lexus vehicles).
Future forecasts predict significant financial losses for Ford and Toyota should the trend of boycotting continue. The HRC Foundation’s analysis estimates that in 2025, Ford could see a loss of nearly $2.4 billion on its Ford and Lincoln vehicles, while Toyota may face losses exceeding $2.5 billion encompassing its Toyota and Lexus offerings.
Support for DEI initiatives remains strong among numerous corporate leaders. Executives from companies like J.P. Morgan, The Cigna Group, Mastercard, and ConocoPhillips have publicly advocated for the importance of DEI in driving financial success and meeting business objectives. Concurrently, members of Congress have expressed their disapproval of companies wavering under external pressures related to far-right ideologies, emphasising the financial advantages that come with maintaining an inclusive workplace. Last month, the HRC and 19 other civil rights organisations urged Fortune 1000 executives and board members to uphold their commitments to workplace inclusion.
Source: Noah Wire Services