Toyota ‘optimistic’ in ’15 despite economic challenges
With 2015 well underway, Toyota de Puerto Rico Corp. executives remain committed to staying the course so as to overcome the many challenges facing the local auto industry.
The automaker, which commands 31.1 percent of the local market, is betting on its legacy of quality vehicles, exceptional customer service and a strong dealership network to stay on top.
During a roundtable with members of the media, George Christoff, president of Toyota de Puerto Rico said, “While it’s true that the current economic climate affects all industries, the auto industry is particularly susceptible.”
“However, at Toyota we see this as an opportunity to fine tune our operations and focus on what truly matters — giving customers an exceptional product backed by unparalleled service. In times like these people look to brands they can trust, and Toyota has certainly lived up to this promise,” he said.
As proof that the plan is paying off, Christoff noted the fact that Toyota has maintained a market share of more than 30 percent, with sales of 3,994 Toyota, Lexus and Scion units so far for 2015.
Toyota is also holding on to its leadership in the main automotive segments. Yaris leads the entry subcompact with a 28.9 percent share; Corolla commands almost half — 49.7 percent; RAV4 holds 17.7 percent of the small SUV segment; Highlander, has 31.3 percent of mid-sized SUVs; Sienna reigns over small vans, with 33.3 percent; Tacoma is the overall leader in small pickups, with 81.7 percent; and the all-new Lexus NX is making its mark in the entry luxury SUV segment, with 47.7 percent.
Christoff said he expects sales to stay the same as last year, aiming to keep Toyota’s grasp on 30 percent of the market, even when the industry is showing a reduction in sales.
Industrywide, Toyota predicted that Puerto Rico auto sales should reach 85,000 this year, down from the 93,000 or so new cars sold in 2014.
New financing opportunities
A key factor for Toyota’s local growth are financing opportunities tailor-made for the Puerto Rican market offered by Toyota Financial Services, a captive finance company that is a part of Toyota Corporation and works closely with TdPR.
Earlier this year, the division launched a new product for the market that offers a balloon option that incorporate competitive monthly payments and shorter terms. The program resembles a lease contract, but because it is a retail contract, it gives buyers the option to pay off and own their vehicle at the end of the term.
“With this product, customers can get the same payment they would under a typical 78-month plan in 48 months, at a very attractive interest rate to support that,” said Brett Beals, general manager of Toyota Financial Services in Puerto Rico.
Part of the strategy calls for giving buyers — at the end of their contract — the option of keeping the car, refinancing the difference, paying it off, or trading in the vehicle for a newer model, he said.
“At the end of 48 months, we’re comfortable in the value of the car, so that the customer can trade it in,” Beals said, saying that by accepting the car after a reduced time of use, the customer will have enough equity over others who may hold on to their cars for seven or 10 years.
The company throws in complimentary oil and filter changes for three years as part of the contract, looking to “ensure the car is well maintained, and it becomes an easy transition at the end of the four years,” he added.
So far, Toyota has been “doing well” with the retail balloon contract to move Lexus vehicles, Beals added.
Parts and service on the front burner
Parts and service is another area in which Toyota is said to be growing significantly, Christoff said.
However, he acknowledged the automaker has fallen short in certain aspects, such as pricing and catering to women. To remedy that, he said the automaker is reaching out to its dealer network, asking them to get to know their customer base and “find out what they want and need.”
As part of its commitment, the company re-launched its Total Care program, offering a host of benefits for customers, including 24/7 roadside assistance, emergency service (including flat tire, empty gas tank, lock out, towing), and basic maintenance — oil/filter change, fluid check, and mechanical inspection.
The program is tied to the launch of the MiToyotaPR.com website, an online tool which customers can use to track their scheduled maintenance calendar, and other features. The service is also available to Lexus owners at MiLexusPR.com, said Nancy Navales, vice president of Toyota of Puerto Rico.
So far, 1,700 Toyota and 900 Lexus owners have signed up to the online platform, she said.
“We also capture what your interests are and what your lifestyle is like, so that we can tailor communications to your individual interests,” she said.