Here is a summary of the main changes being made by Toyota NZ by appointing its dealers as agents:
- For the purposes of selling new cars, dealers are now agents.
- In terms of all other elements of the business, the franchise dealer arrangement with Toyota is unchanged.
- Dealers no longer own new car stock for sale – Toyota does. Dealers no longer need to fund new car stock.
- As agents for new cars, the dealers are selling on behalf of Toyota NZ.
- Customers are buying the car from Toyota NZ, not the dealer.
- Prices are posted on the Toyota NZ website. Prices are driveaway. The price for any car is the same for any dealer anywhere in NZ.
- The price will typically be around the transaction price most buyers were paying under the old system of negotiations.
- Stock kept in three holding areas – Auckland, Wellington and Christchurch – and delivered to to buyers after the sale mostly in one day.
- Dealers own the demonstration vehicles which they buy from Toyota NZ at favourable rates.
- Dealers will have to maintain a complete range of demos so all Toyota models are represented in each dealership. Some models to be available for demo from a pool.
- Number of demos held in NZ dealerships to double.
- Dealers cannot sell the demonstrators for at least three months or more.
- Toyota NZ to encourage 24-hour test drives.
- Dealers no longer earn a margin on the sale of a new vehicle. They are paid a flat fee for handling the transaction which varies marginally between, for example, a Yaris and a HiLux.
- Volume targets are all but eliminated.
- Large savings expected for dealers from the elimination of floor plan costs and the elimination of freight costs from swapping cars between dealerships which was “huge”.
- Modelling shows that with savings on stock holdings and selling fees, most dealers should be more profitable under the new arrangement – especially smaller dealers.
- All dealers now on a common DMS platform.
- Planning for the move has taken 10 years.
By John Mellor
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