When it comes to the car business, Toyota is tough to beat. It develops cars faster, builds them better and keeps costs lower than almost any other carmaker. But there’s one glaring exception to Toyota’s supremacy: its dealerships rank near the bottom in surveys of customer sales satisfaction (chart). For years the poor service didn’t much matter, as buyers flocked to Toyota to avoid the rattletraps once sold by Detroit. But since the Big Three’s quality rebound, Toyota has a problem. Too many of its buyers are defecting to rivals to avoid Toyota’s aggressive dealers. To stop customers at the exit ramp, the company has assigned 30 staffers to work giving dealers a crash course in customer service. Says project leader Richard L. Chitty: ““We have to look in the mirror and see if we’re causing salespeople to behave this way.''
A sharp-elbowed sales staff is only part of the problem. No matter how many hot cars like the Camry and RAV4 dealers get, they’re always in short supply, which forces customers to accept compromises. If you wanted green, blue may have to do. Toyota’s distribution system, in which dealers have to sell so many cars this month to get a good supply next month, is also a mixed blessing for consumers. ““At the end of the month I’ll do anything short of standing on my head on Main Street to sell a car,’’ says Lansing, Mich., dealer Rosario Criscuolo. To smart shoppers that’s an opportunity for a great deal; to browsers or hesitant buyers, it feels like high-pressure tactics. But J.D. Power researcher Lorretta Seymour says Toyota customers, who are more likely to read Consumer Reports and drive hard bargains, contribute to the problem. ““You have deal-hunting customers colliding with aggressive salespeople,’’ says Coopers & Lybrand consultant Glenn Pinkus. ““That’s not a recipe for sales satisfaction.''
At Toyota headquarters, finding the right recipe is now job one. Leading the charge is Chitty, who helped set up Lexus’s dealership system in the early 1990s. To tune up Toyota’s sales culture, his team is studying other industries. For telephone manners, they’re taking cues from Citibank and L.L. Bean; to teach appointment scheduling to service techs, they’re mimicking dentists’ offices. A new handbook encourages dealers to teach car buyers about proper maintenance; the classes are modeled after pre-op visits offered to patients at a local hospital. To reduce turnover among the sales staff, the team set up a new 401(k) program. There’s even talk of eliminating slow-selling car lines that dealers may be twisting arms to sell. The team is just months into a multiyear project, but its goal is audacious: to make Toyota’s sales operation equal to its world-class manufacturing system.
There’s reason to be skeptical. Nearly every carmaker is buffing up its dealerships, and getting independent dealers to change their ways is an uphill fight. But in the ancient tug of war between carmakers and their dealers, the factories are pulling harder. After pinching pennies with lean manufacturing in the ’80s and squeezing suppliers in the early ’90s, today’s hot trend is cutting costs out of distribution, which accounts for more than 20 percent of the cost of the average car. Everybody’s experimenting. Ford is negotiating to buy all its Indianapolis dealerships to improve service; Cadillac is exploring new ways to cut delivery times. The changes are ““like the Dark Ages giving way to the space age,’’ says Babson College retailing expert Martin Anderson. Chitty’s goal is more down to earth: hanging on to owners like the Brivics. ““It pains me to know they bought a Ford,’’ he says. Until his team takes the discomfort out of buying a Toyota, he’ll have a tough time winning them back.
Toyota dealers rank low in a survey of car buyers. Maximum posssible score was 160.
DEALERSHIP SCORE Saturn 157 Mercedes-Benz 156 Lexus 153 Cadillac 150 Ford 134 Chevrolet 130 Industry average 128 Honda 127 Chyysler 125 Nissan 115 Toyota 115 Jeep 113 Hyundai 84 Kia 68 SOURCES: J.D. POWER & ASSOCIATES AND AUTOMOTIVE NEWS
