Toyota, dealers near agreement

Cologne. Toyota Germany GmbH and the Toyota dealers association in the country have completed negotiations on a new dealer contract -- even though there are still differences of opinion in the detail.

The importer plans to send the offer to its sales partners by the end of May.

In the future, dealers will receive vehicles for factory sale prices, a point that "the dealers association had not agreed to in this sense," said Udo Jüngling, head of the dealers association.

The current margin between factory sale price and recommended retail price -- a basic margin of 10.5 percent -- was valid for one year. The association was aiming to set the margin permanently in the contract.

Jüngling said that a lack of planning security weakened dealers' negotiating position with their banks, as the manufacturer was theoretically entitled to cut the margin within four weeks.

"In contrast to our competitors Opel, Ford, Renault and Peugeot we do not have a fixed basic margin in our contract," said Jüngling.

Under the new contract, a "market responsibility area" defined by Toyota will be replaced by a so-called Customer Driving Area (CDA). The EU commission has confirmed "that the CDA is admissible as long as it doesn't serve to limit a dealer's sales to other EU countries," said Michael Thiede, spokesman for the European association of Toyota dealers.

The importer says that standards and margin calculations would be defined more than before by levels of performance and customer service. For instance, dealers' performance bonuses would be influenced by their showrooms, the number of demonstrator vehicles and the level of advertising.

The bonus for fulfilled targets would rise from 2.5 to 3.35 percent, but it would be based on different calculations in the future, Thiede said.

Mitsuo Tanaka, president of Toyota Germany warns: "Those who are not ready to invest in our brand in the long term will not be able to participate in our success."

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