Toyota expects growth with smaller lineup

Importer trying to give the brand its soul

Cologne, Germany. Toyota Deutschland GmbH is still riding high on a wave of new registrations that have grown 4.8 percent in the first eight months of 2005, reaching 90,642 units.

The company is targeting growth of 8.5 percent for the entire year. But Markus Schrick, vice president and managing director for Germany, remains cautious.

"Growth will certainly fluctuate," he said. "When we have a year of consolidation, which is likely, we need to grow all the more quickly later."

For now, the model lineup is shrinking. The Avensis Verso compact van was dropped in March, and the Yaris Verso can no longer be ordered. The eight-seat Previa van will be dropped in December.

Even the Celica and MR2 sports cars will no longer be offered in Germany for the 2006 model year. Replacements for them are not on the horizon.

Dealers are not happy about the moves.

"This is causing us to lose customers, who later will have to be won back at great cost," said a dealer in eastern Germany.

Schrick sees things differently.

"With the remaining product lineup, we can reach a higher volume," he said. The new versions of the compact Yaris and the RAV4 SUV should especially contribute to that.

Both vehicles are being introduced this week at the Frankfurt auto show. Toyota Deutschland offered its own ideas during their development.

"Especially in the Yaris' styling, we provided a great deal of input," Schrick said.

That's why he is expecting a 20-percent increase in Yaris sales when the new model arrives early next year.

For 2005, Toyota is planning on 135,000 new registrations. By 2010, it wants to sell 200,000 cars a year. For that to happen, Toyota needs a stronger customer connection to the brand.

"We need to give the brand a soul," Schrick said. "To achieve this, we are bringing people more strongly to Toyota, which we are doing successfully with Formula 1. This involvement will pay off as soon as we score some better results."

But Toyota also is focusing on the basics at the dealership. "Even during an inspection, the customer must be treated like a king," Schrick said.

The company will reduce administrative costs so that dealers can look after their customers more.

"Administrative expenses have risen right along with our vehicle sales," Schrick said. "We are now trying to configure the process more efficiently. But that doesn't happen overnight."

Tags: Marketing

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