Despite the fact that Ford and General Motors are suffering such symptoms as lost jobs, plant closings and a decrease in market share, Toyota couldn’t be in better health. In fact, the company announced in December their best-ever November sales of 169,665 vehicles, an increase of 5.6 percent over November 2004. Total year-end sales were at 2,260,296 vehicles, up 10.1 percent over 2004. With 10 consecutive years of record-breaking sales, this marks the second time in Toyota’s 48-year history that it has reached sales of over 2 million vehicles.
In addition, they’ve recently broken ground on a New Jersey parts distribution center to keep up with this growing demand, part of which includes “aggressive wholesale programs that can be offered to the shops and body shops that buy parts,” says Joe Stempkowski, national parts & service, sales and marketing manager. Though he doesn’t think Toyota will create direct relationships with the shops or distributors via their warehouses, they are making efforts to launch programs that dealers can use to build business with today’s independent repair shops.
Toyota staffers have analyzed the market and pricing, studied other manufacturers and conducted surveys so they are able to “provide our dealers with the best tools they can to get the repair shops to buy Toyota,” says Stempkowski.
Wholesale numbers going up
Stempkowski tells us that in addition to an overall increase in parts sales, their wholesale collision business is up this year by double digits.
They’ve also experienced “huge growth in batteries and maintenance products, air filters, spark plugs” and more at the wholesale level. Part of the reason for this increase could be due to the fact that there are more Toyotas on the road that demand more parts, whether from the dealer or local repair shop, but Toyota is also doing what it can to ensure their dealership network is equipped with programs in place for catering to the everyday shop owner.
Kevin Mixer, an analyst with AMR Research, says they do see a trend with more “OE parts going into the aftermarket” in general. He adds that the distribution center expansion will allow Toyota to get parts to their dealer channels much quicker. VW did something similar, he points out, and they are seeing more dealers offering hot-shot deliveries for the shop owners too.
Honda is also being aggressive in helping independents with their businesses. “They have a program…where they were providing technical repair information,” says Mixer. Honda offers shop owners access to an online repair manual where they can buy specific pages should they need to, and the “parts can get pulled by the dealer near you,” he explains.
Strategies for dealer retention
Mixer also says that Toyota’s brand strategy with vehicles like the Scion is targeted at pulling through service and parts in the aftermarket cycle. And they aren’t the only ones. Other programs that have evolved include the Hummer, Cadillac Escalade and Yukon. “We are seeing a lot of parts post-production being put on these vehicles,” says Mixer.
Whereas some of these customization programs aim to add as much bang for the buck upfront, the idea for the Scion is to allow buyers to customize their vehicles over time, coming back in to add fins or body or trim skirts. The point is to help build loyalty on a long-term basis.
Marketing efforts enhanced
Stempkowski tells us that another way Toyota is trying to retain more customers at the dealership is by instituting a national radio campaign. After only doing programs in April and October — in preparation for each major season — they now buy radio in the top 46 markets for 30 weeks out of the year.
“It’s been extremely successful” in driving traffic to their locations, he adds.
They’ve also launched a program that can analyze retention in a particular market and have consultation programs available for dealerships to bring more people into the bays and create more customer loyalty.
They’ve added to their online presence with www.toyotaowners.com, a site that gives vehicle owners access to required maintenance schedules, car care tips, service support and discounts and savings. Toyota owners can enter their own VIN numbers and share stories with others.
“We are able to talk to customers based on zip codes, so if a particular region has a service special we can let a customer know what’s going on in that market,” says Stempkowski.
“We try to give the dealers all the tools they need to conquest new customers and take care of customers that are coming back to the dealerships. Our strategy seems to be working.”
