The companion stores would focus on full-sized pickups that rural buyers favor. But the outlets would be full-line vehicle dealers, complete with service and parts operations.
"We need to do something different in Texas," Cabito says. "We think there is some critical mass of volume that we could garner. There are a lot of markets we're not in because we're not in the big-truck business."
SUVs and other trucks represented 65 percent of the state's 1,091,876 light-vehicle sales in 2003, according to R.L. Polk data. Texas' overall vehicle sales are second in the nation, behind only California.
Cabito says Toyota has trouble with market representation compared with domestic brands. Toyota has only 1,200 dealers nationwide, against 5,000 or more for each of the domestics. But Toyota won't flood the market with new stores.
"This is not a wholesale expansion of our channel," Cabito says.
He declined to give an exact number of potential Texas companion stores, though he said it would be "more like 20 than 200." The dealerships would have annual sales of fewer than 500 vehicles, compared with the average U.S. Toyota dealer who sold 1,323 vehicles last year.
Toyota wants to use existing franchised dealers because the dealer can share back-end costs with its larger, established sales outlet. And the dealer's rural sales would probably be dedicated solely to Toyota rather than dualed with a domestic brand, Cabito says. "We would be struggling to find the right sales message on a showroom floor shared with domestics and their incentive programs. A single-line store can be more effective and profitable."
Toyota sells in Texas through its Gulf States Toyota distributor. The two entities have begun to cooperate on the plan. "To really serve the warranty, parts and service requirements of the customers, it is essential to enter underserved markets," says Toby Hynes, Gulf States Toyota's president. "There are a lot of markets that Toyota doesn't reach from a servicing standpoint. Toyota is trying to get closer to the consumer."