Toyota satisfied with number of U.S. dealers
Toyota's US sales have been booming for years, with annual volume growth of 10-percent or more the norm, and profits that beat all other automakers, hands-down. One area where Toyota has fought growth, however, is in the quantity of dealers it has in the US, and if you believe North American President Jim Press, that isn't going to change, either.
In an interview with Automotive News, Press underscored how important it is to have profitable dealers, and how adding more dealerships would dilute the investments of Toyota's 1,445 existing stores. In return, Toyota looks for dealers to focus on improving customer satisfaction, and adding investment dollars into their existing infrastructure. Press likened Toyota dealerships as large corporations, with many long time employees and great service departments.
The average Toyota dealership sells over 1,800 vehicles per year, which is about three times as many sales as the typical Ford dealership. We're not surprised that Toyota isn't growing its dealer-base, especially considering the amount of costs domestic automakers are incurring to right-size their sales outlets. It never ceases to amaze us how much discipline Toyota has when it comes to running their uber-successful business.
[Source: Automotive News (subscription req'd)]
Reader Comments (Page 1 of 1)
AZMike 10:13AM (4/27/2007)
Toyota is giving us all the reasons why they won't be making inroads into the domestic full-size truck market.
Toyota had allegedly "planned" on adding satellite dealerships in rural areas, especially in Texas. this would have allowed them to sell more trucks in rural areas. Automotive News revealed a few weeks ago they have planned a whopping THREE satellite dealerships in the entire country in the next five years, with only one being in Texas.
no one is going to drive 200+ miles, past at least fifteen domestic dealerships, to buy an unproven product. that old saw, "but it's a Toyota" means nothing to them, or many others like myself.
go ahead, Toyota, keep the dealers fat, and competition between them at a minimum. the only real losers are the customers, and who really cares about them? you've been in bed with 'ol J. D. Power since 1980, and they'll always deliver the right results in the surveys, no matter what the buyers really say.
AZMike
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Jeff 10:24AM (4/27/2007)
" Toyota looks for dealers to focus on improving customer satisfaction,"
Now, that's funny stuff! I haven't laughed so hard over a statement by a corporate exec. in years. I may post that comment as my screen saver just so that I can laugh that hard every day.
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collian 10:32AM (4/27/2007)
AZmike You can accuse Toyota all you want. The fact is that they have better manufacturing methodology as well as better business practices which has enabled them move forward. Consequently, they make better products. If it makes you better to feel that JD power is some how favoring Toyota that knock yourself out. I'm you will also accuse consumer reports of the same thing as well. Go ahead and think whatever you want if that makes you feel better.
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the marais 10:48AM (4/27/2007)
Whoever came up with the idea that buying a Toyota or Honda is like buying an appliance was absolutely on the money. I bet Best Buy and Circuit City are also satisfied with the number of their stores!
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AZMike 11:18AM (4/27/2007)
Collian,
I like dealing with the realities of the real world, and have been in the car business my whole life. I owned a dealership for ten years; how about you?
perhaps you are an expert about J.D. Power surveys, but in case you're not, maybe I can inject a few of those darn pesky facts.
back in 1980, Power came up with the idea of satisfaction surveys. he went to the domestic manufacturers, and they laughed him out of the office. Power found interested ears at the import companies; he's still paying back the favor.
as far as the "small timer's bible" goes (Consumer Reports), perhaps it should move to the fiction section of bookstores. I could write reams about their slanted views, but I'll just put down one of my favorite ones here.
back in 1991, they tested minivans. of course, the Toyota Previa (remember these "mega-sellers"?) was rated higher than the Chrysler minivans. just in case you don't know, the Previa's motor was located behind the front passenger seat, on its side, under the floor. it drove a shaft (complete with U-joints) to a location under the hood where the driven accessories (like the A/C compressor) were located. of couse, "the small timer's bible" saw "no safety of service issues with this arrangement". how do you suppose they would feel if this was a domestic vehicle?
I don't have a clue what brought on your pro-Toyota rant, as the only point I was trying to make was the fact they are already backing away from their promise of adding more dealers in rural areas. this will assure the Tundra will not meet sales targets. they made a big hoopla about the location of the new Tundra plant in Texas, and now they refuse to place the required satellite dealerships there to make it successful in Texas.
if their products are so superior, 1) why did they give all their customers such a hard time with the engine sludge issue (and others), and 2) why don't they match the warranty that GM has? let's be honest. a warranty is just like an insurance policy; you're betting it will break, and they're betting it won't. this would be a real way to get that rural truck market, and give rural owners the reason to drive the 200+ miles to buy one.
of course, Toyota won't do it.
AZMike
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Ale 11:14AM (4/27/2007)
Toyota has made only a "little" record now. The big record will arrive in 2010.
http://autoinsight.blogosfere.it/2007/04/toyota-prima-che-coraggio-chiamarla-notizia.html
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Castle 1:11PM (4/27/2007)
@AZMike
for someone who claims to own a dealership you sure have an incredible amount of time to post multiple long-ass rants on a blog comment section.
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AZMike 1:50PM (4/27/2007)
Castle,
if you read the post again, it says "OWN-ed". this is the past tense of own. I sold the dealership in 1993. I still own a car-related business, and have been a subscriber to Automotive News since 1975.
this affords me with plenty of time now for the aformentioned "multiple long-ass rants". I'm far from an armchair "expert" like so many here; I speak from my own experience in the business, and not by what I learned on the last episode of "King of Cars".
it doesn't take a rocket scientist to see the lunacy of Toyota's ideas. they expect this incredible growth, but have no plans to add dealers. what will service be like? most dealers are landlocked, with little room for growth. every dealer has a protect exclusive area, so no one can move far from where they are presently located. and let's not forget to factor in the incredible growth in the sunbelt; but no new dealers. the only ones who will ultimately be hurt are the customers.
AZMike
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Toyota Tundra 4:09PM (4/27/2007)
They will need to keep adding dealerships for the all the demand they will have in the future.
http://www.tundratalk.net
Toyota Tundra Forums
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collian 4:51PM (4/27/2007)
AZmike!
Really, you think because imports listened to JD power, they’ve decided to favor them for 27 years and counting. Remember that Toyota is not the only import and a lot of imports get bad raps from them so your argument seems to be fundamentally flawed.
A lot of people have a problem with Toyota because they are a foreign owned company and others because they are taking business away from them. I think you are one of those worried about the business aspect. You said you owned a dealership, I'm sure you don’t own a Toyota dealership and there goes the motive. So my friend, lets agree to disagree on this issue; Toyota has been a greatly managed company and they’ve been ahead of the crowd for a while now.
The Big 3 took Americans for granted thinking they would buy a crap they put out. Well, Toyota gave them a choice...end of story.
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Barney 6:16PM (4/27/2007)
How typical. Collian you admit you are not a dealer anymore but still degrade what was your opposition. Toyota is doing well and your voice doesn't change the fact. This blog seems to attract those who figure that Americans can do no wrong. Get over yourself and face reality. American dealers are no one's friend either.
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Squid 7:04PM (4/27/2007)
Toyota like Harley realizes that by not allowing dealerships to be too close to each other it takes away the deal aspect and keeps the price up closer to MSRP than other manufacturers like Ford and Chevy.
http://www.toyotatundraforum.com
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far jr 3:19PM (4/28/2007)
Squid... You are correct. Which of course is good for Toyota and the dealership, but bad for the consumer's price and service avaliabilty. Many Toyota buyers are so happy to own the perceived security of a Toyota, that they do not mind driving 100 miles for service or paying thousands more for a car. More power to them, but The Fusion is rated better than Camry AND costs less for comparable trim AND has more dealers to negotiate with and service the vehicle.
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airport krishna 9:07PM (4/30/2007)
GM has something like 13,000+ dealerships, Ford with 7K+, Chrysler with 8K+. That's why Wall Street will continue to hammer companies that can't get efficient fast enough. While there's obviously no easy, painless solution, the wastefulness of GM, Ford and Chrysler is staggering compared to the simple efficiency of Toyota and Honda, regardless whether you like their brands, cars or management.
The amount of money required for the overhead of those bloated dealer networks will crush those brands because they can't compete on profitability - it's a case where there are far more stores, models and people than the American consumer needs.
Could Toyota make more money, sell more cars if they rapidly explanded their dealers, maybe -- looking at how the American companies got greedy and gave franchises away like flyers on 42nd street, Toyota's wise to sit back and watch the glut of U.S. retailer networks implode of their own excess. Until American companies are prepared to get leanly competitive and in fighting shape, there's not much of a fight.
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