Toyota's dealership strategy pays off

By Kamil Tchorek

Toyota's Polish sales figures have leapt by an astonishing 48 percent, dwarfing the growth of Fiat, the market leader which sold less than three percent more than during the same period last year. Auto industry analysts and Toyota management alike point to the firm's long-term management strategy that is paying off and which, together with the launch of new products, could see Toyota becoming the market leader in Poland within three years.

Fiat, which assembles the low-price Cinquecento model in Poland, sold nearly 39,000 cars this year. Meanwhile Toyota, which tends to sell mid-ranged models imported from its assembly plant in the Czech Republic, sold almost 24,000, effectively putting it in joint third place with Renault, behind Skoda in second.

Jacek Pawlak, Commercial Director of Toyota Motor (Poland), attributes his sales success to the special attention that Toyota gives to its dealership strategy. "In 1996 we had a plan of expansion into Europe, and we decided that the dealership network should be ready before the cars arrived for sale."

In practice this meant that a Toyota dealership training program, in co-operation with the University of Warsaw Department of Economics, was put in place well before Toyota's major presence in the country. Professor Krzystow Opolski, who teaches at the program, likens it to "...an ongoing research and development project for Toyota, whereby the future dealers of Toyota look in detail at the specific problems and solutions that Toyota are faced with in Poland. In this respect, the project that Toyota runs at the University of Warsaw is unique."

Dealers tend to be entrepreneurs themselves, with around 80 percent of them financially investing in their dealership personally, at the encouragement of Toyota. "We don't have as many dealers as our competitors," says Pawlak, "but we are well located, and each dealer must be responsible for large sales and is motivated by the opportunities we provide for each dealership. We have some 'mega-dealerships', with up to 150 employees selling up to 2000 units that require exceptionally advanced management skills. Other brands tend to have smaller dealerships, and in my opinion, it makes them less ambitious and less able to sell."

In the long run, the amount of investment in, and autonomy of, each dealer has translated into better customer service. Stanisław Sewastianowicz, the editor of Auto Świat, the largest auto publication in Poland, says, "The customer satisfaction derived from service is quantifiable. Of the 10 carmakers we have tested, Toyota came first for customer service and was well ahead of the second-ranked manufacturer. Clearly, this comes from good management by dealers which translates into sales."

The next few years offer Toyota a great opportunity for continued dramatic growth. Though much of the sales are currently of units imported from production lines in the Czech Republic, "... the 35 percent tariff barrier to imports from Japan prevents our sales being even bigger," Toyota's Commercial Director continues. "EU membership will bring that down to 10 percent, meaning that the price can come down on our imported models."

Finally, with the launch of a new product to rival the low cost, big-selling Fiat Cinquecento scheduled within three years, Toyota hopes to finally push itself into first place.