LOS ANGELES - Toyota is putting its U.S. credit and insurance arms under the umbrella name of Toyota Financial Services.
The new unit will be a marketing identity for Toyota Motor Credit Corp. and Toyota Motor Insurance Services, not an actual company. The credit and insurance arms will remain legally distinct corporations.
So why bother?
George Borst, senior vice president of Toyota Motor Credit and Toyota Motor Insurance Services, said Toyota has never presented itself as a brand on the finance and insurance side of the business and has never run a consumer advertisement to hawk its wares. All of that will change.
'There are new competitors, new challenges,' Borst said. 'There is information available everywhere instantly, and consumers' expectations have increased. Creating a brand allows us to bundle items, so the consumer can access all the information in one shot.'
Borst noted that a customer who finances through Toyota Motor Credit has a 20 percentage point higher loyalty rate to the Toyota family than someone who went to an outside provider.
'We need to leverage that,' he said. 'We have to be quick, nimble and less conservative.'
Giving the finance and insurance arm an identity is one of several initiatives that Toyota will roll out in the next year. Borst outlined the other goals:
1. Give Toyota Financial Services a one-stop e-commerce site, where a consumer can file a credit application, electronically pay bills and track and make account changes.
2. Embrace new computer technologies that will replace the company's separate retail, wholesale and lease systems.
3. Ally with other businesses in areas Toyota does not now touch, such as subprime or near-prime finance.
4. Create a new account group that deals solely with the needs of megadealers and publicly held dealers.
5. Streamline the processes and structures of Toyota Motor Credit and Toyota Motor Insurance Services without reducing head count.
6. Break out of Toyota's stodgy culture to move faster and aggressively, using pay-for-performance packages as incentive.
Said Borst: 'We'll never be the lowest-cost leader because we can't borrow as cheaply as the banks. But we can be value-added by bundling our resources and giving better customer satisfaction.'
In 1998, Toyota Motor Credit hit a milestone by booking an average of $1 billion a month. This year, business is off slightly, mostly because Toyota changed the way it set its residual values.