As part of its Image USA II architectural plan, Toyota is asking owners of older dealerships to renovate their shops or risk shorter franchise renewal contracts. The majority of franchise owners are not happy with the idea, as there is not enough incentive to spend millions in upgrades to their store. Toyota reasons the expanded dealerships are necessary to sell and service the growing numbers of its cars on the roads today and in the future.
Typical six-year franchise contracts are becoming two- and six-month contracts, down from two years last year, in cases where dealers are slow to adopt Image USA II, according to Automotive News. “They give you short-term contracts until you are in compliance with what they want you to do,” said a Toyota dealer who wishes to remain nameless. But Toyota executives maintain other factors are involved in “provisional” renewals, including sales performance, working capital and customer service ratings.
Under the plan, dealers are expected to install new furniture, a customer lounge that includes wireless Internet access and flat-screen TVs and a new front entrance that prominently displays the Toyota logo and dealer name, as well as more square footage in both sales and service facilities.
Image USA II, introduced in 2004, is expected to cost a dealer around $1.5 to 2 million as a minimum, or about $150 per square foot, with costs that can soar to over $20 million if relocation is called for, as in dense urban areas. In return, Toyota is offering dealers a more generous allocation of hot-selling models. This may not be enough, as sales are down across the board, with Toyota and Scion sales 1.9 percent lower than they were in the same two-month time period last year. Furthermore, dealers are concerned Toyota is taking a general, all-encompassing approach as opposed to being concerned about individual dealership issues or problems.
Toyota reasons that since the number of cars sold per dealership has increased by over 32 percent since 2000, it needs to have larger dealerships to accommodate them all. Dealers who have made the change-over report increased sales and staff and owner loyalty, among others, according to Toyota executives.
03/17, 8:49 AM
posted by:
paulee
how would you buy cars then?
03/17, 9:35 AM
posted by:
maximus
this makes sense, you have to invest your money to stay in business. Toyota is looking for an image to maintain, but should work more with the dealers if this is to happen. The facelift should attract more buyers.
03/17, 9:38 AM
posted by:
Fletch
Although I won’t shed a lot of tears for car dealers, the Japanese are demanding. Folks that have worked for any of the Japanese big 3 can attest.
03/17, 10:01 AM
posted by:
S o c i a l i s m
I personally go to a dealer for only two things. First to buy a new car, and thereafter only if there is a warranty claim. Otherwise I get my car serviced by local independents. So as far as I am concerned I don’t care if the dealership had new gray cladding and a large stupid emblem or wireless internet. I don’t want to pay for that crap when I will only be there maybe on average once every 4 years for a couple hours.
03/17, 10:22 AM
posted by:
A4
get a bigger parking lot and some new signs, i dont need wireless internet while i get my oil changed
03/17, 11:07 AM
posted by:
E60M5
@ A4 wireless internet does seem pretty pointless but at least it’ll give consumers something to do while picking which bloated pig of a car they’ll take home
03/17, 12:02 PM
posted by:
jumpoffit
don’t forget to add in some coffee and donuts and a Wii wouldn’t hurt either
03/17, 12:18 PM
posted by:
Sabon
FYI: The cost for them have wireless internet is very small. The cost to you for this overhead is somewhere less then .0000001 of a penny.
First, they already have internet access to do business.
Second, they most likely already had wireless internet for their own laptop computers.
Third, it costs at most $150 to buy a wireless router and anyone that works with computers for living should be able to easily setup and configure a secure wireless router. It would take maybe 15 minutes and has very little maintenance needed.
Compared to the cost of everything else a dealership has, the cost is so small that it is almost petty cash.
As for building bigger dealerships as compared to staying the same size.
Look around at the different dealerships in your area. If they have the same customer service focus the bigger dealership will usually have a lot more traffic than the smaller dealership.
Why? Choice. When you have a bigger dealership you have a lot more cars. When you have a lot more cars you –usually– have more variety of the same car with different options which means the person buying the car is more likely to get THE car that they really want with the options they really want without options they don’t want.
Who benefits? Everyone.
The dealerships get more business which is greater than the costs that they had to put out to build a bigger dealership.
The customers win because they are a lot more likely to get the exact car that they wanted.
Also, smaller dealerships have a harder time keeping a steady flow of business in their service area which means the mechanics aren’t working on as many cars per person, –probably– haven’t seen as many issues with cars so they don’t know as often how to fix as many things. Basically, in larger dealerships, if run correctly with good management, are more likely to provide better service with larger work days which makes it more convenient for you and me to take you car in to get it fixed if it needs to be fixed.
No I don’t work for a car dealership or in the auto industry. The above is based on my personal dealings with small, medium, and large car dealerships.
Not all large dealerships are good. It all depends on the people that are there. Buyer be ware. Shop around. Find a dealership you are comfortable with and that have the car –you– want to buy and not just want they want to sell.
The sticker price is a starting point. Negotiate or find someone that is good at it and likes doing it. Treat them to a really good dinner if they do well or take them to McDonalds if they don’t.
03/17, 12:29 PM
posted by:
SwerveEarly
Toyotas always spreading the goodwill.
03/17, 1:17 PM
posted by:
S o c i a l i s m
Wow Sabon, your win-win bull**** must be why the actual dealership owners don’t want to outlay the cash and are being coerced by Big Brother to waste money. Because those dealerships are run by idiots who really just want to lose money, right?
03/17, 2:39 PM
posted by:
LJ
don’t forget to add in some coffee and donuts and a Wii wouldn’t hurt either
Comment by jumpoffit, posted on March17 at 12:02 pm
They already do this at one place in Ohio… donuts, coffee, tea, bottle water/tea and pop/soda, and large screen tv.
As for changing oil… in my town, we have angry neighbors..who call EPA on you if you do any car work..not joking…. ain’t worth the hassle.. got a “warning” once…since I change oil 2 times per year, let Scion(tC) do it…no one can call EPA on me again, then.
Oil change prices are Down, even with these upgrades..vs 2007.
Around 19 dollars vs 25.
Cost me(if I could “legally” change oil w.o neighborhoood watch dogs calling people)…about 10-11 to change it myself.
Anyhow…whatever.
03/17, 2:43 PM
posted by:
S o c i a l i s m
LJ, close the garage, change your oil, and then pour it under your neighbor’s car parked in his driveway under where the motor is and call the envirocops on the power-tripper.
03/17, 4:27 PM
posted by:
cfishgo
Image upgrade programs are nothing new.. Pretty much any national retail chain does it. It’s just part of doing business.
The issue with car dealerships is that very few cities want them. Lots of lights and cars aren’t a image any city wants. Taxes go to the jurisdiction of the purchaser, not the dealership address… Existing buildings also always have problems “adapting” to new standards. It’s not very “green” either since you demolish perfectly good materials and send them to the dump because they don’t meet the current “image” the brand wants to project. But the customer is comfortable with “normality” when shopping… the building aesthetics help establish a expectation. A new McDonalds looks like a better place to eat than a old run down McDonalds even though the food and service never changed… same theory with where you buy & service your car.
03/17, 4:59 PM
posted by:
injunraiv
LOL, Toyota is following the script… Business is good, start leaning on the dealers to spend tons of money on infrastructure, look into their fixed operations and start messing with what obviously was working already, etc, etc.
Will ANY manufacturer ever learn to let the dealer sell cars while concentrating on developing a quality product?
03/17, 6:14 PM
posted by:
jjayc08
This won’t cost Toyota anything, or very little. I mean, of course you need to put some effort into maintaining a business, but 1.5 million per dealership? For what they’re proposing, it seems pretty ridiculous, a little bit of new furniture, a flat screen TV and internet access. Oh yeah, Toyota label. The price seems pretty ridiculous, and if Toyota is expecting an investment of that much, then they may as well be called ridiculous. Good business practice, I just don’t see this as a good way to do it.
03/17, 9:16 PM
posted by:
audi-lover
you sick freak, big dick guy! Cats are cool. how could you violate a cute little animal like that? You need to go to some hospital for the crazy with petting zoos for people like you so you can ram some poor little goat with an asshole the size of a basketball.
Anyway, toyota has been going downhill for a long time
03/17, 10:39 PM
posted by:
bigp
they suck
03/18, 12:29 PM
posted by:
Sabon
“Wow Sabon, your win-win bull**** must be why the actual dealership owners don’t want to outlay the cash and are being coerced by Big Brother to waste money. Because those dealerships are run by idiots who really just want to lose money, right?
Comment by S o c i a l i s m, posted on March17 at 1:17 pm”
And which part, specifically, of my post is bull****? Please try to be articulate.
03/23, 3:01 PM
posted by:
jackjimturkey
maybe they should require the dealerships to get better cars