TOYOTA SHAKE UP CAR BUYING

By Sandy Myhre

Visiting a car dealer has just got a whole lot easier, according Toyota New Zealand. The dominant brand in the New Zealand market has just announced a shake-up to the way it sells cars.

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According to the company’s CEO, Alistair Davis, it will no longer be a “stress test” to buy a new car, where haggling over costs had become the norm, but a “rather more pleasurable experience”.

In what the company terms the “Toyota Happy Drive Project” (TDP) car dealers will not have to carry as much showroom stock as in the past but will have a larger selection of stock from which to choose from car “pools” at three prime locations – Auckland, Wellington and Christchurch.

Alongside that, an up-front, utterly transparent, price of a new car purchase will be established from the start.  According to TNZ’s research, haggling over the closing price and not being fully aware of potential and covert on-road charges was what customers feared the most when visiting a dealership.

This, says Toyota, will significantly decrease the final retail price on most models. The recommended retail price for a Corolla GX hatch under the old selling regime, for instance, would retail for around $33,290.  Under TDP it could be as low as $27,990 and still include all warranty and service options.

Neither will Toyota dealers be allowed to discount new vehicles to try to beat other Toyota dealers and seal a potential deal. When the customer does decide what to buy (and the selection will be far greater from the car pools) the new car will be shipped to source.  For city customers in those three main centres the waiting time could be less than a day.  For regional and rural customers Toyota NZ say there will be no more than a two-day wait period until the car arrives at the dealership.

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With dealer on-yard stock consisting of demonstrators only, it will theoretically signal the start of a significant down-sizing of car dealership showrooms, thus reducing infrastructure overheads. What will increase is the number of late-model, low-mileage, second-hand cars as demonstrator stock is replaced and although Toyota New Zealand didn’t say as much during their announcement at a March 28th press conference, it is likely to result in more people visiting the dealership and so, to a lesser extent, combat the might of non-dealer ‘dealerships’ like Trade Me.

Mr Davis said the vehicle selling process had not changed much in the last 50 years, yet most customers today were using online tools to research options before purchasing.

“We’re not alone in making new vehicle purchases a drawn-out affair that takes the gloss off the experience,” he said.

Further under the Happy Drive Project, customers will have more test-drive options and a seven-day money-back option if they’re not happy, provided certain conditions are met.

“Our research has told us people want product specialists and not just commission focussed sales people,” said Mr Davis.

Still to be addressed, however, is the considerable gender imbalance still found on the traditional car yard.  Car sales men still vastly out-number car sales women not just in New Zealand but world-wide.  Toyota’s new up-front, hassle-free pricing structure just introduced, though, might go some way towards eliminating some of the fear women face just by walking into a dealership.

Toyota New Zealand CEO, Alistair Davis, talks about the new selling regime:

https://www.dropbox.com/s/k6ku7pnygkakkoz/Drive_Happy_News_Segment.mov?dl=0

 

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