BRUSSELS - Juan Jose Diaz Ruiz, Toyota's new European marketing chief, said the company will reshape its product range and dealer structure.
He said Toyota is grouping its European products into four focused lines. Over the next three years, a third of its dealers will be asked to specialize in a particular vehicle line.
To sweeten the proposition, Toyota promises to expand each line substantially. 'It will be a parallel development of specialized dealers and products,' said Diaz Ruiz. 'We see in Europe that customers have become more focused on the type of vehicles they want to drive, according to their lifestyles and the way they use their time.'
Toyota's specialized vehicle lines are:
Comfort: Traditional passenger cars for daily use, like the Corolla, Avensis, Camry and new Yaris. This line will feature roominess, safety and traditional equipment packages.
Fun and Leisure: Trendy and popular vehicles, including sports cars, coupes and roadsters alongside family vehicles such as minivans and sport utilities.
Premium: The Lexus range, which will get its own exclusive franchise and additional vehicles, including the IS200 sedan.
Business. Commercial vehicles and cargo carriers including new small vans based on passenger car platforms.
'With Toyota's vehicle lines, we have the opportunity to offer a well-focused, streamlined range of product in each segment that, in a way, functions as a brand,' said Diaz Ruiz.
Future products will be developed for the specific lines. Marketing and communications will also follow the new product categories.
The Lexus range will get its own franchise, but new and existing Toyota dealers will be offered the chance to specialize in one of the three other product lines.
'In the future, there will be dealers that offer fully-integrated business lines, covering all segments in the market,' said Diaz Ruiz. 'But in other places we will offer them the possibility of a specialized segment. They would have the opportunity to specialize and grow and bring in incremental business.'
Toyota's new product and marketing arrangements are part of its strategy to grow European sales to more than 600,000 units by 2000, while expanding into new segments.
The company only offers 60 percent of its worldwide product range in Europe, said Diaz Ruiz. 'We have an enormous possibility to diversify, to bring new products, but it doesn't make any sense if our dealers cannot handle it.'
The program is still in an early stage. Marketing studies are underway in each country on how to set up the dealer network. Toyota expects distributors to present the plans to local dealers in the fall.
Toyota expects to add about 500 dealers in Europe, including central Europe, to handle the additional volume. This will bring total number of dealers to about 2,800 by 2005, excluding the new Lexus franchises.
Most new Toyota dealers will be in southern Europe, where import quotas traditionally limited the company's growth. The elimination of quotas at the end of next year and Toyota's new factory in Valenciennes, France, which will begin assembling the Yaris range in 2001, 'means we can offer a better business prospect to dealers in southern Europe,' said Diaz Ruiz.
He believes that up to 40 percent of Toyota's dealerships will specialize.
'This specialization is needed and is profitable,' he said, 'especially in metropolitan areas.'
Toyota expects the 'comfort' line to be the most popular with dealers. The addition of the Yaris next spring - as a Japanese import - to compete with Ford's Fiesta and VW's Polo, will give the range a vehicle in each major passenger car segment in Europe.
'The core of our business, 70 percent, will remain the comfort line - from Yaris all the way to Camry,' said Diaz Ruiz. 'There is an enormous volume potential here.'
The company believes the 'fun and leisure' range will be most appealing to dealers in metropolitan areas because that's where the wealthiest buyers live.
Diaz Ruiz said Toyota will add vehicles in this line. He will not give details, but said, 'We could bring some vehicles from Japan that we don't offer and we will be dramatically renovating the range we have on the market today.'
The business range will also be expanded with the addition of small commercial vehicles based on passenger cars, similar to those offered by Europe's six volume makers. Toyota wants dealers near commercial and industrial parks to specialize in the line.