It’s the new NZ slogan for Toyota, ‘Drive Happy’. The statement from TNZ Chief Executive Alistair Davis is “This could be one of the biggest changes in distributor auto retailing in this country – maybe in the world.”
So what does all this mean and is there something sinister just under the surface of this change, and what actually is the change?
New Zealand is not a big market but it is a great place to test a new concept. Toyota has decided this rather small, but successful island country in the remotest part of the world is the best location for what will no doubt have a huge impact on the global car market if it is successful.
It’s a little bit like testing the H Bomb on Mururoa Atoll in the last century. Far enough away from everything to not cause too many disconcerting ripples in the fabric of world opinion but implications which may turn the world of vehicle sales upside down.
Sound dramatic? Well we think it is and we have known Toyota was going to something like this somewhere for a long time.
So what is it Toyota are doing which is so game changing?
Toyota Dealers in New Zealand? These will no longer exist. Dealerships will become stores and sales people will become consultants, or more appealingly to new Toyota marketing, ‘Product Experts’ or ‘Store Concierges’.
Toyota says it is to get rid of the hard sell, but what it really will do is get rid of negotiation. Buyers now will have a set price and you will be encouraged to order online. Why not, there is no point going in to discuss the price when there is only one price? Does that not remind you of the direction of other online business? In return, Toyota are saying they will be dropping all the prices of their vehicles because of this. Well they would say that wouldn’t they.
Instead of making a ‘mark-up’ or ‘commission’ the ‘store’ owners and ‘Concierges’ will get rewards for sales volume generated by their activities. It will mean lower costs for the store owners with less space, no stock (except test drive cars), less staff (Toyota will control stock, delivery, marketing and sales) and as such in the beginning some saving could be passed on to consumers.
TNZ has now upgraded its website for customers to build and buy their new Toyota’s. You can book your test drive, have the vehicle longer and most likely delivered to you and of course there will come a choice of delivery location for the buyer.
It does sound great for the modern day consumer who wants convenience, more access and better prices and a lot of vehicle commentators are writing up as a good thing.
What the consumer must understand is in the future your price will be driven by market forces and not by your negotiating skills, but everything else is probably better.
What global dealers need to understand is that this is an experiment that is likely to be successful and if it is then look out….. your next.
What the industry work force has to understand if it is successful is that they need to consider their skill set if they are to survive in this industry and also realise many of their jobs just soon may not exist at all.
It is a sad reality of the global market influence of online trading that sooner or later it will affect every industry. Be prepared for a manufacture controlled environment in the vehicle industry which we are sure will happen all around the world in the next few years (including Australia) and get used to it, or prepare.
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