Australia’s biggest car company has no plans to go down the same set-price agency model path as Mercedes-Benz or Honda, saying franchise dealers remain a bedrock of its business.
Toyota, reflective of its market dominance and market share north of 20 per cent, has the nation’s biggest franchise dealer network in both urban and regional areas.
While the company’s vice president of sales, marketing and franchise operations Sean Hanley – himself an ex-Queensland car dealer – acknowledges in vogue set-price business models are a talking point, he reckons the old ways are still the best for his company.
Centralising inventory in these times of shortages would have upsides, although at Toyota’s scale this would be very difficult.
This is nevertheless a different tactic to that used by Toyota over the ditch in New Zealand, where it runs the agency model.
“We’ve made very strong commitments as recently as the last week, again, that agency model for Toyota in Australia and for our dealers is not in the plan,” Mr Hanley told us.
“Having said that… we are blessed that we have a very strong trusting relationship with our dealer network, right? And our dealer network is very much part of our plans for the future.
“Our dealer council is very much part of our 10 year plan. So in other words, we sit with our dealers, we talk about our 10 year plan and we talk with our dealer council about what their strategic priorities are, and how we align them with our strategic priorities.
“That’s how deep we go. That’s the relationship we have with our dealer network, right? So I can say this because it’s all fact, and you can even go and ask them. We speak about agency model. We speak about this because it’s happening in the Australian market with some brands right now.
“So therefore you have these discussions and we made it clear to them. We are not planning an agency model for Toyota and Australia. We made it very clear.”
That’s not to say Toyota won’t seek to evolve the way it sells cars. It’s already been selling cars online – something it has wound back amid ongoing supply shortages – and is rolling out its own car-sharing service Kinto. It also launches its first EV in 2023, the delayed bZ4x.
“As we progress into a mobility company and an electrified, digital, connected company… the future is quite different potentially to what our roles were 10 years ago,” Mr Hanley said.
“So whilst we’re not planning an agency model, we do say to our dealers – who do agree by the way – that our roles, Toyota distributor and Toyota dealer roles, will have to alter.”
Toyota has previously taken a dim view toward excessive prices being advertised by some franchise dealers – as examples of near-new LandCruiser 300 Series’ listed with massive markups proliferated in the classifieds earlier in the year.
The agency model switch – which puts inventory back into the OEM’s hands and comes with set pricing, and fixes dealer fees – is a talking point right now, with Mercedes-Benz and its dealers in Federal Court over the issue of compensation for the switchover.
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