Toyota's Moving Target

Posted by: David Welch on November 14, 2007

Yes, we all know how wonderful Toyota is. Record profits, surging sales and a bulletproof reputation for quality all are proof that the company is on top of its game. But its bread-and-butter Toyota brand can’t seem to fix the problem it has at its dealerships. Again, Toyota ranked near the bottom in J.D, Power’s Sales Satisfaction Index. Toyota ranked 27th out of 36 brands and was 28th last year. Scion, which is sold in Toyota showrooms, was even worse. This means customers may like Toyota cars, but they don’t like the time they spend at dealerships.

It’s not like Toyota and its dealers don’t know how to keep people happy. Its top-shelf Lexus brand topped the sales satisfaction survey this year and was fifth last year. And Toyota has had a slew of initiatives to boost its performance in sales satisfaction surveys.
What’s the problem? J.D. power says that Toyota ranks about average among mass-market brands. Its weak points are that the sales process takes about 35 minutes longer than, say, Buick. They also complain about too much paperwork. It could be that the one thing that makes a Toyota dealer so strong is its weak point with customer service. A typical Toyota dealer might sell 1,400 or more cars a year. Many domestic brand dealers sell one-third that. This means Toyota dealers have more money to take care of people with things like free oil changes and a ride home while their car is being serviced. But it also means that so many people are popping in and out of the showroom that it’s probably hard to give them all the glad handing they want. Honda has the same problem. Plus, Toyota pushes its dealers hard with tough sales goals. That means the hard sell is alive and well.

Toyota launched another new initiative a year ago to find out why its dealers don’t get repeat customers and why its scores in satisfaction surveys are low and what could be done as a remedy. Apparently, they haven’t answered the question yet.