TOKYO - Of the more than 25,000 requests for new-vehicle pricing information received by Autobytel Japan K.K. in its first two weeks in operation, about 30 percent were from shoppers interested in Toyota vehicles.
Toyota Motor Corp. covets these buyers. The automaker has been trying desperately to lure young, computer-savvy buyers to counter its elderly customer base in Japan.
But the giant automaker turned its back on those shoppers.
Toyota's Japan dealers, at the carmaker's direction, did not respond to the requests for a sales price on a new car. They couldn't. No Toyota dealer has signed up with Autobytel Japan or with its rival, CarPoint K.K.
Toyota has decided not to embrace Internet retailing. The opportunity of Web selling comes with an implicit threat to the control that Toyota and other major Japanese carmakers have over the new-car distribution system. And for Toyota, the threat overrides the opportunity.
'We want to protect our distribution chain,' said Toyota spokesman Tetsuo Kitagawa.
'We want to do it the Toyota way,' by sending Web surfers to the company's corporate Web site or its dedicated Gazoo kiosks, which offer computerized information on new cars, options and the location of Toyota dealers.
Internet threatens distribution
Toyota is not alone. No Honda dealers have linked yet with either of the services, which began Japanese operations in November.
Nissan Motor Co., meanwhile, is accepting Internet retailing but trying to control it by deliberately directing its dealers to CarPoint and away from Autobytel.
Call it Web vs. Wa. In Japan - a nation that prizes the wa, or harmony, of existing relationships - the Internet's ability to cut costs by destroying established distribution channels is not welcome.
Auto retailing on the Web faces other problems in Japan as well. When, how and how often Japanese log onto the Internet is not the same as in America, meaning Autobytel and CarPoint have had to customize their approaches for Japan.
Big impact on used cars
Nonetheless, the Web has emerged as a potent force in Japan's market for used cars.
'The used-car market is on the Internet,' said Tadaaki Jagawa, a Toyota executive vice president. But selling new cars 'is different than the used-car market,' he said.
One key difference: manufacturers' control of their new-car dealers. Used-car selling is wide open in Japan, with a healthy and aggressive body of independent dealers competing with factory-linked dealerships with no regard for factory-drawn sales territories.
In new-car sales, though, carmakers want to defend their dealers' carefully drawn sales territories.
To be sure, several Japanese and foreign car companies in Japan have welcomed CarPoint and Autobytel. As a result, CarPoint started operations with the blessing of seven carmakers and aimed to have more than 800 dealership concerns signed up by the end of November.
Autobytel Japan began with 200 dealership concerns representing 10 car companies.
Small players use Internet
The companies willing to try Internet selling, however, all have been the smaller players in Japan, including Mitsubishi Motors Corp., Fuji Heavy Industries Ltd., Mazda Motors Corp. and Ford Japan Ltd.
About half the manufacturers represented by the two services are importers. They also tend to be companies that are restructuring dealer operations, shutting down money-losing dealerships and expanding territories for successful stores.
Changes are coming slowly to an industry where carmakers used to reprimand or even punish a dealer for selling a car to a buyer who lived in another dealer's territory.
Toyota has said that in theory, it will be willing to enlarge the territory of a successful dealer who meets sales and customer-satisfaction targets, even if that means taking territory away from a neighboring, underperforming dealer.
Toyota's tight grip
In theory also, Toyota and Nissan cannot forbid their dealers to sign up with an Autobytel any more than they can forbid their dealers to sign up as a Ford franchisee.
But the theory and reality often differ.
'Legally, there are things (Toyota) can't say or do, but they still have a strong influence' through the Toyota dealers association, said Saburo Kikuchi, president and CEO of CarPoint K.K.
Toyota maintains 'rigid territorial control' over its five distribution channels, said Yoshikuni Kato, executive vice president and COO of Autobytel Japan.
'In the U.S., Autobytel can give a dealer a larger territory than he has been assigned,' Kato said. 'In Japan, we basically need to follow the territorial assignment. We can't tell dealers, `You can get a bigger territory' ' by using Autobytel, he said.
When Toyota dealers are invited to join Autobytel, they demur and say Autobytel needs first to persuade Toyota to endorse the service, Kato said.
So he tried. Last July, Autobytel started its Japan marketing efforts with courtesy visits to the manufacturers.
'Our intention was not to ask the manufacturers to recommend our services to dealers but to position us as a win-win arrangement,' Kato said. 'Our intention is not to break up the existing system but to coexist or co-prosper with the existing system.'
Nissan signs with CarPoint
Web retailing could help make Japan's notoriously inefficient car dealers more profitable, he argued. In the United States, Autobytel has helped dealers raise their sales per salesperson from nine cars a month to 25 to 30 a month.
'If we can increase the sales in Japan from four sales per salesperson to 10, that will be a miraculous job,' said Autobytel.com's vice president for international development, Josh McCarter.
CarPoint made the same work-within-the-system pitch and came up with the bigger trophy: Nissan.
Nissan signed a pact with CarPoint to train its dealers in the ways of the Internet, whether or not they also subscribed to the CarPoint service. About that time, alleges Autobytel, Nissan also sent a memo to its dealers strongly requesting them to sign up with CarPoint.
The result: 184 of Nissan's 200 sales companies, or 92 percent, have signed with CarPoint.
The implication was that if they participated in Autobytel, it would be against the manufacturer's policy, Kato said. CarPoint's Kikuchi declined to discuss the specifics of the CarPoint-Nissan pact.
Toyota prefers kiosks
Nobody, however, has been able to get in the door at Toyota. And without Toyota, 55 percent of Japan's 2,500 dealer companies will be beyond any Web retailer's reach.
Perhaps most telling is Toyota's response to the Web retailing services' argument that a shopper who stopped at an independent, one-stop Internet site could compare other brands to Toyota's models and then might decide to buy a Toyota car.
Toyota didn't buy that argument. 'Toyota's strategy is to attract brand-loyal customers,' said Autobytel's Kato.
Indeed, Toyota spokesman Kitagawa said the automaker would prefer that comparison shoppers first log on to Nissan's Web site and gather information on their car of choice, then log on to Toyota's site and do likewise. Or, he said, they can go to Toyota's special Gazoo kiosks to check out Toyota models.
The Gazoo kiosks are inside Toyota dealerships, at the Lawson and Thanks chains of convenience stores and the Tsutaya video-rental chain, Japan's version of Blockbuster. Excluding those inside dealerships, Toyota has 3,057 Gazoo terminals available.
But the returns have been negligible. Only about 1 percent of Toyota's sales last year came from Gazoo-generated leads, said Toyota's Jagawa.
Putting kiosks in stores appears to help consumers because it solves the problem of costly Internet access in Japan for customers. However, it also prevents true comparison shopping, because Gazoo is linked to a Toyota network, not to the Internet.
'From my personal point of view, they don't understand the Internet. The concept of the Internet is open,' said CarPoint's Kikuchi.
Noting that Gazoo's links go to dealers via Toyota, he said, 'Manufacturers even want to control the e-mail communications between the dealer and customer.'
Still, Kikuchi is hopeful.
'Once several dealers have some success by taking advantage of the Internet, the other dealers will look on and change,' he said.