Toyota NZ ditches 'dealerships' for 'stores' in big changes to sales methods

Thursday, 29 March 2018

Car salespeople after a commission will be a thing of the past, says Toyota NZ.

Toyota New Zealand is making major changes to the way it sells its cars, moving right away from the old-school method of commission sales and haggling over prices.

The company describes the move as one of the biggest changes to automotive retailing in the history of New Zealand's motor industry.

From next week Toyota dealerships are to become Toyota agents - called Stores - and they will be paid a fee to deal with customers. Vehicles will no longer carry recommended retail prices, which means there will no longer be any negotiation over what customers pay. And staff will be salaried product specialists and not commission-focussed sales people.

The new system, which is dubbed the 'Drive Happy Project' by the company, will also result in price reductions for all new vehicles, TNZ chief executive Alistair Davis confirmed. That's because the purchasing exercise will be haggle-free.

What has prompted the change is Toyota research that found several likes and dislikes about the current industry-wide buying experience, Davis said. The biggest concern was price negotiation and the buyer never being sure of getting the best deal, and another major concern was finding the right vehicle for the buyer's needs.

Customers should feel positive about buying the right vehicle, he added. No business wants to be known for any hard-sell tactics, but sadly that is the reputation that comes with the traditional car dealership.

So from next month the Toyota Stores will not carry their own dealer stock but Toyota-owned demonstrators, and once a customer has selected a car it will be delivered from one of three nationwide hubs. Toyota says this change will remove any pressure to buy from a limited selection of available vehicles at the dealership.

But although Alistair Davis described the traditional dealership method as an anachronism in today's environment of customers using on-line tools for their research, Toyota has no intention of abandoning its network of dealers.

'They are a vitally important part of the sales process,' he said.

Alistair Davis, managing director of Toyota New Zealand says cars will get cheaper under the more centralised distribution model.

'They offer a local presence for our brand, an economic presence for their communities, and a human presence for customers.'

Toyota's chief executive Alistair Davis said on The AM Show the company would be selling cars from just three hubs now - Auckland, Wellington and Christchurch.

Toyota NZ intends continuing to sell cars from dealerships and actually double the number of vehicles on yards - the only real difference is that the stock at dealerships (now called stores) will be demonstrators, and all cars purchased will then be delivered from one of the three hubs.

Davis also said the cars would be cheaper to buy, and more easily customised.

Correction: An earlier version of this story incorrectly said there would be no more Toyota dealerships. This has now been amended.