Why So Low In The Sales Ranking?

[RunningInPleasePass]

From another post I learnt that Toyota are not big sellers here in the UK.

Ref.:

Medium size cars

1. VW Golf

2. Ford Focus

3. Opel/Vauxhall Astra

4. Skoda Octavia

5. Renault Megane

6. Toyota Auris

7. Hyundai i30

8. Peugeot 308

9. Kia Ceed

10. Seat Leon

11. Citroen C4

12. Honda Civic

13. VW Beetle

14. Chevrolet Cruze

15. Skoda Rapid

16. Citroen DS4

17. Mazda 3

18. Toyota Prius

19. VW Jetta

20. Seat Toledo

Additionally the Toyota Corolla (saloon) came in at 26.

Small sized cars

1. Ford Fiesta

2. Renault Clio

3. VW Polo

4. Opel/Vauxhall Corsa

5. Peugeot 208

6. Toyota Yaris

7. Dacia Sandero

8. Citroen C3

9. Seat Ibiza

10. Skoda Fabia

11. Fiat Punto

12. Hyundai i20

13. Nissan Micra

14. Kia Rio

15. Citroen DS3

16. Dacia Logan

17. Suzuki Swift

18. Honda Jazz

19. Peugeot 207

20. Mazda 2

Additionally the Toyota Urban Cruiser came in at 26.

From sales so far in 2014, Toyota look set to achieve a 5% market share.

(Thanks Frostyballs for this info)

My thinking for Toyota not selling well is:

They look a bit dated. (even though they sometimes use the most advanced tech)

They look a bit plastic, compared to, say VW. (but they will last longer and break less often)

They are perceived as an 'older persons' car. (perhaps the new yaris will change this)

They are not used much by Driving Schools. (often new drivers buy the same car they learnt in)

The media prefer anything from VAG. (reliability is not an issue for them)

What do you think Toyota could do to alter this?

[stompe]

Hiya Kev,

Pure and simple, The Toyota GB warranty debacle, Customer service, and not so good Dealers. in a Nutshell.

[Grumpy Cabbie]

Toyota are meant to be gaining market share. But as others have picked up on, Volkswagen rule many of the magazines. Now whether that's because VW look after them with free fish n chips and a few pints, or as was the case in Australia, by under hand tactics is debatable.

Throwing their weight around works in the UK, but the Aussies weren't having any of it.

http://mumbrella.com.au/unhappy-brands-told-to-pull-ads-to-alter-behaviour-of-journalists-as-fairfax-removes-claim-that-vw-pulled-advertising-160572

Criticize their product and they'll pull their ads. Sure that must go on, but with the size of VW many magazines can't afford to upset them, so don't. Thankfully someone in Australia had balls and broke the story and now VW are suffering over there. Good.

Just look at WhatCar if you want proof. Virtually all VW and Skoda and Seat products score very highly, yet Mazda or Toyota or anyone else barely do. I remember a survey from them where the Prius came top of ownership from readers, yet WhatCar rated it 3/5. How?

[FROSTYBALLS]

The figures quoted are for Europe, not the UK.

Toyota's figures for the UK, together with market share. are:

2000 101,436 3.76%

2001 98,160 3.90%

2002 104,498 4.07%

2003 117,537 4.55%

2004 121,088 4.72%

2005 122,536 5.02%

2006 117,813 5.02%

2007 118,409 4.92%

2008 106,412 4.99%

2009 102.686 5.10%

2010 87,413 4.30%

2011 73,581 3.80%

2012 84,554 4.18%

2013 83,653 3.90%

2014 76,059 3.90% - YEAR TO DATE TO SEPTEMBER

Cumulative UK sales figures for 1965 to 1999 for all Toyota models - 1,086,272.

What Toyota GB warranty debacle??

For non-hybrids, the new car warranty was 3 years/60,000 miles up to May 2010, and from June 2010 5 years/100,000 miles. Yes they have made changes to the hybrid warranties, but so has Honda. Up to the 2010 model year the IMA warranty was 8 years/100,000 miles, and from 2011 model year was 5 years/90,000 miles

Some manufacturers have also offered five year warranties as short term marketing tools - Chevrolet, Fiat, Honda to name just 3.

As regards use by driving schools, Ford contract with The AA Driving School and Vauxhall contract with BSM, to supply lease cars - both of these are long standing arrangements. The driving school has each car for up to six months - they are then returned to the manufacturer for whatever refurb is needed, and then sold as used cars through Ford Direct and Network Q. The name of the leasing company goes onto the V5 - not the name of the driving school. This provides both Ford and Vauxhall with a ready supply of six month old cars to re-sell.

Before GM went into bankruptcy protection, Vauxhall used to supply cars to BSM at no cost, and the thinking behind this was that new drivers commonly buy the same make/model car they learnt to drive in.

In Australia VW have had problems with their cars suddenly losing power, the DSG gearboxes, and electrical and fuelling issues. As regards the DSG problems, VAG left much of the issue to VW Australia to handle. Over 33,000 cars were recalled in November 2013, with some owners being told that the issues wouldn't be sorted until February/March 2014.

[korat102]

Toyota's are pretty pricey considering the equipment level as well. Equivalent priced Ford's for instance have far more equipment (toys!) on board. I seriously considered a Ford when changing my car last time, it was only the appalling reputation of the local Ford dealerships that put me off.

[Heidfirst]

It's a bit more complicated than you may think at first.

First of all how many do Toyota want to sell? Iirc their target is only to get to 7% (plus Lexus but that will be even a lower target). That's because they want to maximise profit & not turnover.

They don't have a lot of factories in Europe & they have relatively few models (either Autocar or Autoexpress the other day said that Audi alone has 50 models & is looking at going to 60).

Volume alone isn't everything if you look at VAG group the most profitable bit by margin by far is Porsche (low volume) & Audi is considerably more profitable by margin than mainstream VW. The most profitable European car company atm is possibly Land Rover which isn't exactly a mainstrean volume manufacturer. The Opel/Vauxhall boss said that he would love to have Toyota's margins. That's because if you have big fixed overheads (big factories & several of them) you have to keep those running at high utilisation & that often means selling volumes at big discounts to fleet/rental companies etc.

[Grumpy Cabbie]

Sounds like an excuse from Toyota. Factories going unutilised eh? Nah, they want an easy life selling fewer models for higher prices.

They sell a few tens of thousands of cars in the UK and sell hundreds and hundreds of thousands in the US and Japan. So it's nothing to do with factories and more to do with an easy life.

Volume isn't everything, but neither is sitting around twiddling your thumbs.

[FROSTYBALLS]

Toyota Motor Manufacturing has four car plants within Europe - Burnaston making the Auris and Avensis, Onnaing (France) making the Yaris, Turkey making the Corolla saloon and Verso, and the Joint Venture with PSA in the Czech Republic making the Aygo/C1/108.

Burnaston exports 85% of its production to other European countries, and have been exporting versions of the Avensis to Japan. I would imagine the other three plants have a similar percentage of production that they export. Toyota France as well as exporting the Yaris to European countries, also exports the Yaris to North America - although when the Mazda 2 based (and Mazda built) Yaris for North America starts production mid-2015, the exports from France to North America will probably cease

[Heidfirst]

Sounds like an excuse from Toyota. Factories going unutilised eh? Nah, they want an easy life selling fewer models for higher prices.

They sell a few tens of thousands of cars in the UK and sell hundreds and hundreds of thousands in the US and Japan. So it's nothing to do with factories and more to do with an easy life.

Volume isn't everything, but neither is sitting around twiddling your thumbs.

Well, you will believe whatever you want.

However, my 30 years in sales & marketing says to me that there are essentially 2 ways to make money in a mature market in a developed country i.e. the UK - 1. massive volumes at low (commodity) prices or 2. small volumes at premium prices. The middle market is dead/dying.

Look at all the volume European manufacturers:

Ford Europe only just moved back into profit this year. Same for PSA

Opel/Vauxhall still loss-making.

What have they all been doing - shutting factories.

As I said before mainstream VW isn't that profitable (SEAT is still loss-making), it is Audi & particularly Porsche providing group profits.

Toyota's European factories all run at fairly high utilisation meaning that adding another volume model would need another factory here (Japanese built cars transported are too dear & I don't think that US models would work here). Toyota have previously said that they wouldn't build a factory in Europe just to make 80,000 cars hence why they collaborated on Aygo so they would need a model that they could guarantee to shift in the 100,000+ to keep the factory efficient. That would probably mean price-cutting to find a market for another 100,000 cars & if you have ever done the exercise it's amazing to see how apparently small extra discounts can really eat into profits.

Also, Toyota's reluctance (like Honda & Mazda) to go for diesel wholesale no doubt has had an effect in a market that is 50% diesel.

[Grumpy Cabbie]

So that explains why the PIP is way overpriced? Sell 300 a year rather than 600 for a few grand less.

I don't pretend to understand marketing but sometimes it gets too clever for its own good and it backfires. I'm sure there's a critical point where it becomes less cost effective to sell cars, but also just being happy to sell a handful doesn't seem right either. Why not sell more at a higher price? Your argument is that it's better to run the car plants efficiently than over produce. But if Toyota cars are priced at such a premium and profitable way, then why not just divert some capacity from the cars that would have gone to America where they demand lower prices? Ten thousands less cars sold in the US could be sold in the UK surely (obviously allowing for compliance etc)?

And if what you suggest is the way Toyota want to go (less sales at higher return), then why do Toyota Worldwide want to be the Worlds number one selling car company? Or is Toyota Europe a 'special' case?

[Heidfirst]

So that explains why the PIP is way overpriced? Sell 300 a year rather than 600 for a few grand less.

I don't pretend to understand marketing but sometimes it gets too clever for its own good and it backfires. I'm sure there's a critical point where it becomes less cost effective to sell cars, but also just being happy to sell a handful doesn't seem right either. Why not sell more at a higher price? Your argument is that it's better to run the car plants efficiently than over produce. But if Toyota cars are priced at such a premium and profitable way, then why not just divert some capacity from the cars that would have gone to America where they demand lower prices? Ten thousands less cars sold in the US could be sold in the UK surely (obviously allowing for compliance etc)?

And if what you suggest is the way Toyota want to go (less sales at higher return), then why do Toyota Worldwide want to be the Worlds number one selling car company? Or is Toyota Europe a 'special' case?

Yup, it's very complicated e.g. see http://www.reuters.com/article/2014/05/21/chrsyelr-ceo-evs-idUSL1N0O71MS20140521

It's all about balancing product mix, production efficiency etc.

As for diverting cars that would have gone to the US to Europe what cars are those? The bulk of Toyota's US sales are produced in America or Mexico & are different products than for Europe.

There is obvious kudos in being able to say that you are the world's no.1 but I'm sure that if you gave the board the choice of being a profitable no.2 or a loss-making no.1 they would settle for no.2 .

[korat102]

You can be sure they've done the sums. The Japanese are very well known in financial circles for taking the long term view...

[cuius]

"In 2013, the world’s largest automaker [Toyota] earned about as much as what analysts estimate to be the combined profits at the next two biggest automakers, Volkswagen AG and General Motors Co" Bloomberg

[PeteB]

Hmmm, maybe that explains their strategy toward their loyal customers - they actually want to put some of them off buying more of their products!!!

For example:

In mid 2003 (about six months before the Gen 2 Prius was launched),

Toyota invited about 20 members of the Yahoo Prius-UK group to a preview of the new

model in Wimbledon. I was mightily impressed that they were so interested in our opinions.

Many of the group very forcefully said that we would be really unhappy with a space saver spare tyre (the left hand drive, pre production model they showed us had no spare at all, just a can of gunge). A couple of people virtually dismantled the boot to prove they could make space for a 'proper' spare.

We also mentioned heated mirrors, and when one of the Toyota people mentioned they were considering fitting a reversing camera (just a camera - no self park at that time, although the Japanese model had park assist from day one) and many of us said we would kill for such a feature.

I also pointed out that adaptive cruise control had been available on the luxury end of the market about 15 years and it was high time it permeated toward cars like the 2nd generation Prius - it didn't.

So imagine our disappointment when the car was launched with:

• a toy spare wheel (but at least it had one!)
• no heated mirrors (by this time even humble Fiesta were getting electric folding mirrors as well!)
• no reversing camera, but an annoying beep instead!

They got 5 brownie points for asking our opinion, then lost 30 for ignoring everything we told them!

[Duffryn]

A cynic might say that the less cars with less toys you sell + therefore the less warranty claims you'll get = the better reliability record you'll get to enjoy!

[Grumpy Cabbie]

Don't the JDM Prii get folding side mirrors but they're not heated?

Maybe it's one or the other due to wiring etc. Heated side mirrors are absolutely required in winter up here. Also, auto folding mirrors would be a pig if they jammed or broke and expensive to fix out of warranty.

[PeteB]

...auto folding mirrors would be a pig if they jammed or broke and expensive to fix out of warranty....

true, but getting ordinary (heated only) ones knocked and broken can be expensive too - at over £300 a time - at least when folded away they're less likely to get knocked by passing traffic!

[Grumpy Cabbie]

Just fold them in manually on the side nearest the road. I've found the gen3 wing mirrors to be quite hardy :)

[PeteB]

not a problem, my Gen 3½ has electric folding mirrors and I make a point of always using them when I park - love them apart from the fact they stop working as soon as you power off!

Icing on the cake would be if they stayed active for a while as the windows do (or better still, worked with the door locks like so many cheap cars seem to) - I often fold them, switch off, then try to look in the mirror that's now folded to check if its' ok to open the door!

Possibly another example of the people who design these things not actually using them themselves?

[cuius]

Worldwide Sales of Toyota Hybrids Top 6 Million Units ...15th January 2014 Toyota Global Hybrid Sales Crest 7 Million Units... 14th October 2014

Seem to be doing something right

[Grumpy Cabbie]

Worldwide Sales of Toyota Hybrids Top 6 Million Units ...15th January 2014

Toyota Global Hybrid Sales Crest 7 Million Units... 14th October 2014

Seem to be doing something right

They do ABROAD.

Read the full thread :)

We're saying that Toyota 'UK' don't want to sell more cars and are happy to sell less with more profit than Toyota USA say. So whilst Toyota worldwide are selling lots of hybrid cars, Toyota UK don't really want to.

[Heidfirst]

I think that you will find that sales of Toyota hybrids in the UK & Europe are up. What I think that you will find is down here & there is Prius sales. Why would that be?

1. there is a certain amount of cannibalisation where given a choice people are opting for an Auris/Yaris hybrid as better suiting their needs.

2. there is more competition achieving similar mpg than there was a few years ago

3. the European car market in total has not yet fully recovered

4. iirc the Prius is built in Japan whereas the others are built in UK/Europe. This affects pricing & profitability.

1 of my other interests is photography & there is a well known industry observer called Thom Hogan who within the last week has published an article including this:

"One of the things on every Japanese consumer electronics company financial report that’s up front and center is the role of currency on profits. Because these companies are primarily exporters, they’ve learned to game the currency fluctuation situations pretty well. Indeed, it’s not unusual to see much of their actual profits generated by currency differential that was played correctly. So Nikon, et.al., won’t give all that yen decline back in savings to US customers, but they’ll certainly use some of it to keep sales up.

You can already see some of the “play” going on. If you look at August’s DSLR shipments to Europe, it’s 47% of last year’s number, while it’s 88% for the Americas. Even though mirrorless is said to be doing better in Europe than the US, the same thing plays out: 100% of last year’s shipments to Europe, 132% of last year to the Americas. In other words, more inventory is coming into the area with the bigger currency gain against the yen/bhat and less into the one with the flatter currency rates." (my bolding)

[Grumpy Cabbie]

Toyota UK will do what they do. Whether I or other loyal owners continue buying their cars remains to be seen. I know there's a balance between gaining new customers whilst keeping existing ones, but I think they're erring more onto the wrong side.

Back to your comment about selling less cars for more money. Is that why I can buy a Lexus CT200h for LESS than a Prius? Doesn't that show that something is wrong somewhere.

But in five years of owning my Prius I've seen Toyota change, and not overall in a good way.

[Heidfirst]

"Back to your comment about selling less cars for more money. Is that why I can buy a Lexus CT200h for LESS than a Prius? Doesn't that show that something is wrong somewhere."

No, because a CT200h isn't a Prius but is more akin to an Auris Hybrid (which is cheaper still, albeit based on a 2012 revamped platform rather than an older one as the CT200h is).

The price differential in the UK between an Auris Hybrid & the Prius has certainly grown over the years though (do you think that they might want you to buy the locally produced, more profitable product? ;)).

btw, I never said "selling less cars for more money". What they are doing is balancing available supply & demand to maximise profitability (as do most well run businesses). Yes, they could provide more cars (additional models etc.) but only with increased cost/investment & probably at the cost of increased discounting to find homes for those extra hundreds of thousands of cars in a constrained market so lower margins. The business case for return on investment simply is not there for them to do that in Europe at the moment. I'm sure that if the case was there for an extra factory/model in Europe they would do so.

[Parts-King]

So it's nothing to do with factories and more to do with an easy life.

Volume isn't everything, but neither is sitting around twiddling your thumbs

Sorry but that is totally incorrect. Toyota desperately want a 5% market share not 7%, they would love 7% but there is no chance of that for quite a long time. Whilst some high value marques and the German marques have increased their market share, Toyota have struggled for a number of reasons, some of which was due to high demand and low supply on Aygo but they also lost focus on some areas of marketing which has seen them slip back a bit. They fully expect to be at 4% by the year end as the stock situation has improved vastly and so has some of the marketing focus. If ANY manufacturer could improve their market share by a few percentage points they would take it in a flash, no car manufacturer would sit around twiddling their thumbs, it would just not happen, especially if they had the stock or capacity