The Nikkei Business Daily says that Toyota plans to introduce sales outlets in Japan that stock models ordinarily stocked by different dealership networks in an attempt to improve marketing efficiency in regions where the population is decreasing. The company will introduce the outlets on a trial basis by year-end.
Toyota started its fifth affiliated sales channel, Toyota Vista, in 1980, as part of a strategy to expand its dealership network in line with growth in the domestic market. For Toyota, which has boosted sales by making affiliated dealers compete with one another, “joint sales outlets were taboo,” a Toyota director in charge of sales told the newspaper.
However, domestic new car sales, excluding minicars, declined 2.3% to 3.97 million vehicles last year, with Toyota’s sales falling 2% to 1.68 million units, dipping below 1.7 million for the first time in two years. In a bid to bolster sales, Toyota has increased the number of models, such as the ist and Alphard, sold through two of its sales channels.
The company has also approved the creation of joint sales outlets to handle vehicles of several different sales channels in regions whose populations are declining.
The move is aimed at helping sales companies improve their management efficiency, since it will cost less to set up one joint sales outlet than to open separate dealerships for all five affiliated distributorships in depopulated areas.
Joint sales outlets will enable dealerships to make inroads into regions they previously decided not to expand into. As a result, outlets can be operated with optimum efficiency in accordance with population changes and other market conditions. With dealers shifting their marketing methods from door-to-door sales to storefront sales, a carefully thought out plan of operation will also serve to increase convenience for customers.
“Customers do not come to buy cars with a clear distinction between dealership networks in mind,” said Tadashi Koizumi, president of Gifu Prefecture-based Toyota Automall Development Corp., which opened a large commercial facility, dubbed Colorful Town Gifu, in November 2000. Colorful Town Gifu is the only Toyota facility in Japan that houses outlets of all five affiliated sales distributorships. It saw sales rise 5% in its second year of operation through November 2002, a company official told the Nikkei Business Daily. Koizumi maintains that joint sales outlets make it much easier for customers to decide which car to buy.
Though Toyota controls more than 42% of the domestic market, its sales are declining and the Corolla lost its crown as the best-selling car in Japan last year. Against this backdrop, there is no time to lose. “We will continue to operate 5,000 outlets in Japan,” a senior Toyota official told the newspaper.