Toyota’s newly released new vehicle sales business plan, using an agency rather than a more traditional franchise model – revealed elsewhere in the mag – follows very much on a path embarked on by Toyota a number of years ago in terms of parts sales and service.
Explains Spencer Morris, general manager Parts & Service at Toyota NZ: “In the parts area we have been operating a de facto agency model for more than 10 years now.”
He said this grew out of the launch a number of years ago by IAG insurance of the PartsTrader online tendering system for the repair industry, which enables buyers to get multiple confidential quotes from suppliers. This means the buyer can always choose the best combination of price, delivery time, and quality.
Subsequently IAG handed the system over to an independent company, but it still remains a major focus point for repairers wanting parts, and is the preferred option of most insurance companies here.
Spencer said having to quote via PartsTrader led to a number of changes within the Toyota NZ parts pricing structure, as its genuine parts prices had to be competitive within the marketplace if it was to be able to compete with others offering parts on PartsTrader.
However, he added that it’s not all about pricing, delivery and service are equally important. Spencer says Toyota delivers 95 percent of parts across the country within 24 hours from its main warehouse in Palmerston North, as well as other satellite warehouses around the country, and this gives the company a distinct advantage when it comes to supplying parts timeously.
Indeed, so successful has it been that Toyota has more than tripled its parts business. Currently Toyota holds about $25-million of parts stock, and last year Toyota's accessories and parts sales topped $140-million nationwide.
“Naturally there has also been some organic growth as more cars come onto the road, but we have also been through the global financial crisis as well,” says Spencer. “It has been an extremely successful model, and we often get compliments from our customers – as well as having won a number of awards for our parts service.
“The model provides a level playing field, and allows us to price to the market. I think the repairers appreciate our level service too, and they especially like the fact they can use genuine parts that fit properly first time.”
However, Spencer said this growth had put a lot of pressure on resources.
“Parts take up a lot of space, especially collision parts, and so we have embarked on a significant expansion in Palmerston North, adding 11,000sq.m to the existing 24,000sq.m warehouse,” he said. It is expected the additions will be completed during the third quarter of this year.
