For Toyota, “Selling a used vehicle today means selling a new vehicle tomorrow” – The argus PRO

The argument. Reading the data on the second-hand market, what do you think?

Thomas Gérard, head of sales and marketing, Toyota and Lexus France companies and opportunities. Used cars are cheap and we see that the share of used cars traded between individuals is increasing compared to that of professionals. This is linked in particular to some constraints on the delivery and stocks of new vehicles available in the networks, which represent the primary source of recovery on used vehicles. We are clearly short of equipment, but despite everything, demand remains very strong and that will not change. I see, more than ever, the second-hand market as a second-hand market, on a par with clothes or toys, and it’s interesting. There are motorists who choose to buy second hand. And not just for reasons of purchasing power, but to get into this notion of circular economy or to contribute to the fact that the vehicle has more lives. However, this mode of consumption does not interrupt our NV business. This is a purchasing philosophy that the Toyota group and our network are fully committed to as it drives us to reinvent our customer promise.

Do you think this trend will continue?

The year 2021 had this accelerating effect and we have fully embraced this strong trend good business and eco-friendly purchase. It will continue for the next few years. For our part, we have absorbed this philosophy and will continue to implement it in our strategy, in particular through our two hat brands Toyota Occasions and Lexus Préférence, in which we market certified used Toyota and Lexus, but also other brands. These two multi-brand labels enabled us to achieve our ambitious goals last year.

Thomas Gérard, head of sales and marketing, Toyota and Lexus France companies and opportunities

60,000 used Toyota labels

Which are the numbers?

We concluded a very good financial year in terms of used car sales to private individuals in the network, with 60,000 Toyota Occasion labels, up 11% year on year, and 4,000 under the Lexus Préférence banner, up 22%. Sales to merchants are not mentioned. This is the first piece of good news, but the real satisfaction comes from exceeding targets when, like some producers at the end of the year, we ran out of stock. But we have implemented many mechanisms in the network that have allowed us to meet the demand. We have fueled our stocks and achieved our volumes thanks to some practices tested in September. It is a change of mentality that was set up two years ago.

Do you have any examples?

There is nothing revolutionary because we have relaunched the dry purchase as they say. We simply motivated and sensitized our outsourcing network so that dealers would look for used vehicles elsewhere, from Toyota and Lexus owners. They contact people in the ads and make them an offer, that’s how we inflated our inventory. Simple as a cake and finally traditional. This practice works because there is a question, so you need to structure yourself to answer it if the covers are no longer enough. We have guided the network in an approach from “I take back then I sell” to “I have to sell then I take back”. To support them in this paradigm shift, we have also created marketing campaigns to attract customers who would not have thought of our network to buy back their car, such as pop-ups on our websites, which poll visitors and invite them to buy back. their car on the network near their home or to be contacted. For example, we have set up days or months of “Buyback at Toyota Occasion”, supported by local communication, in collaboration with a company that comes to do on-site coaching, organize dedicated moments and generate leads and traffic. We also thought about incentives, with the famous carrot if one of the employees allows his dealership to buy used cars through his entourage, etc. It is a purely commercial approach, we move forward with respect to customers, but there is nothing new. We don’t necessarily need to revolutionize things

constantly because the foundations are often enough to do good business.

car sales d
Sale of used cars of the Toyota Group


Initiatives that lead you towards what ambitions?

We have strong enough volume ambitions for years to come: to achieve the ratio of 1 UV for 1 NV sold to individuals. We are therefore talking about 80,000-90,000 used cars marketed in 2024 in the Toyota Occasion network and between 7,000 and 8,000 in the Lexus network. The goal is to evolve between 15 and 20% each year for Toyota and multiply volumes by 2 for Lexus. We look for ourselves, we have many projects in terms of platform and tool to go beyond this idea and be even more professional. We are no longer in the pilot phase, but in the process of implementing a plan we have had in mind for two years, which can only be achieved through the game of growing NV acquisitions and also external sourcing.

Why absolutely strive for this balance?

We have now become the first imported label with Toyota Occasion on the market, we are extremely efficient, because we are one of the first manufacturers to have structured the network about twenty years ago. However, there are two factors in this acceleration. The first is external and concerns these new players, pure players, who make second-hand their main business. And these push us to question ourselves, they are so innovative. As builders, we have to be better than them. The other reason is about profitability. The second-hand business represents one of the main sources of income through various levers such as financing, insurance, after-sales, etc. There is still a lot of potential to be profitable in the long run. This is why we have set ourselves this maxim of managing used vehicles while managing new vehicles to seek margins. That is to say we want to have the same commercial and development codes on both sides because we have noticed through studies that when our network sells a used vehicle, in 50% of cases, the customer renews the purchase on a VN from us. So selling a UV today means selling an NV tomorrow, to the same person or their children and others, it doesn’t matter, but it is attracting NV buyers through the UV network. The VO is a territory with great potential, which will always support the NV.

LIGHT. Used cars. Diesel resists.

used toyota license plate
Toyota wants to sell 90,000 used cars in 2024 (+ 8,000 Lexus used cars)

Used Toyota house

How will you implement this new management?

To make the VO live with us like the VN, and put an end to the outdoor parks of cars and not very sexy flags lined up, we are working on the project we call for the moment Used Toyota house. Its mission will be to welcome a used vehicle customer in a dedicated place, a specific universe for used vehicles, with visible and valuable vehicles, and thus give him a complete physical and digital experience like in a used vehicle showroom, with colors, an atmosphere, etc. There are dedicated showrooms that will open, it is a certainty because we have ongoing projects and investors who have already come forward, but this Maison Toyota Occasion can also materialize through corners, relaxation areas, warm areas with green plants, or simply from a shelter to the open to deliver a customer in the rain, a bow, a test center, etc. You don’t see it everywhere and these little attentions are enough. Welcoming the second-hand customer as we know how to do very well in NV, simply, inside and out, without necessarily having to create a showroom. This concept is flexible and will take different forms depending on the specificities of the sites, but our ambition is to find this Maison Toyota Occasion spirit in 100% of the French network very soon. The first pilot is scheduled for this summer.

What can you say about your two labels?

used by toyota dealership

100% of the network is a member and distributes these labels, which means 95% of used vehicle sales to people in the network are labeled, proof that we are right. Our customer promise is strong as we offer a three-year warranty for all Toyota and Lexus used vehicles under the age of 8, the same level of coverage as a new vehicle, and we even offer a 3-year vehicle warranty. of other brands less than 5 years old. So if a customer buys a Renault Clio in the Toyota Occasion network, he has more warranties than the new vehicle. The customer comes in search of an offer, serenity and a price. Of course, it is a gamble on our part because guaranteeing 3 years necessarily costs more, especially since vehicles of other brands represent 10%. However, 78% of other brand buyers in our networks subsequently purchase a Toyota or Lexus vehicle …

Sale and delivery of used items online

Is profitability not affected?

The impact will be virtually nil or amply offset by the increase in our sales. Used car profitability continues to have a strong impact on the network in 2021, gained one point in one year, and our network’s used car margin increased 15%.

Are you going to position yourself on the construction of a reconditioning plant?

We have network projects to centralize the preparation and repair of used cars because these activities are spread over multiple sites and we need to be efficient, know how to optimize flows and costs and free up space in our workshops that are active, but I will say nothing more.

And the online sale of used cars?

In March 2021 we set up the reservation, with a security deposit, which allows you to block the car for 48 hours and get in touch with a dealer. We are increasing with 80 bookings per month, which in 70% of cases translates into a sale. When there is a massive influx we will be ready. Subsequently, we continued to develop our digital customer journey by launching in September, with our captive, the pre-acceptance of the loan through a questionnaire of 160 questions, which allows us to pre-qualify the loan request. The next step is in fact to establish online, omnichannel sales to support our network. We go far beyond the qualification of the leader with customer services and the establishment of a sales practice but despite everything we remain convinced that a customer should try a hybrid used. We want to keep this relationship to make sure he made the right choice and to keep it in the after-sales part. Then let’s talk about retention.

Projects?

Yes, in the coming weeks we will be launching an experiment with one of our investors regarding home delivery of used cars. We have been thinking about this topic for a few months because the digitization of the customer journey aims to satisfy a need and this service is one of them. The challenge will certainly be to deliver home, but bringing the customer into the ecosystem of brands in our concessions. So beyond the logistics system which is relatively straightforward, it’s about seeing how to work on the customer experience and create a link for years to come for our used vehicle, light vehicle and aftermarket businesses.

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