Ultimately, three factors led to a breakthrough with retailers: Toyota Motor Credit stopped tying retail finance to wholesale finance. In 1986, it introduced attractive leasing programs. Finally, large, respected dealers such as Lloyd Chavez Sr., who owns Burt Automotive Network in Denver, took a chance on the upstart captive.
"Our relationship with Toyota was so good and we thought so much of them," Chavez says. "I think we were instrumental in getting Toyota dealers in Colorado to sign up with Toyota Motor Credit."
Pitts, now 59, left the captive for a different job with Toyota in 1993. At that time, the captive had 2,200 employees and $10 billion in assets.
Over the past decade, CEO George Borst has led the company, now called Toyota Financial Services, to dramatic growth. The captive includes credit and insurance units.
"Because of the previous job I had as division manager of Lexus, and two years before in strategic planning and product planning, I had insight into Toyota's growth plans in the United States," says Borst, 59. "We had to at least grow in lockstep with the sales side, and perhaps even quicker."
In the fiscal year that ended March 31, Toyota Financial Services reported $69.36 billion in assets. In that time, the company financed 1.3 million vehicle loans and leases. It has more than 3,000 employees, three regional headquarters, three call centers for retail customers, and 30 dealer sales and service offices.
In 2002, Borst streamlined Toyota Financial's field offices. Then the company had 625 retail accounts per employee. Today it has 1,050.
At the same time, Borst expanded the staff that works directly with dealers. "We needed to focus on building a relationship with the dealer," he says.
In 2004, the company created Toyota Financial Savings Bank, in a move Borst calls a "loyalty strategy."
Although the bank offers a credit card to Lexus owners, its primary mission is broadening business with dealers, Borst says. This year the bank has 275 accounts with dealers for such things as mortgages on homes, vacation property and yachts, and personal lines of credit.
"The last 10 years have been about growth," Borst says. "We recognize our business comes through the dealership. We need to be essential to the dealers. We can become irrelevant very quickly."-