Toyota sales drop, following switch to fixed prices

Wednesday, 9 May 2018

Toyota sold 1771 cars in April last year, and just 1310 in April this year.

Toyota New Zealand has suffered a slump in sales, a month into its new 'haggle-free' policy.

During April, the company sold 1310 vehicles, down 26 per cent from the same month last year, Motor Industry Association figures show.

Toyota New Zealand chief executive Alistair Davis said he had expected a 'significant dip' in sales for April.

'Transitioning to a new way of doing business is not going to happen overnight, or even in one month.'

* Toyota NZ retail revamp cuts up to $10k off new-car prices, permanently

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'There's a transition period for us as our network of stores and customers to get used to the improvements we're making.'

Customers had to get used to the idea of no haggling, Davis said.

The drop in sales also reflected a usually slower period for fleet, rental and lease business, he said.

'This has allowed us to fine tune some of our system changes without the pressure of the usual larger sales volumes.'

While sales had decreased, there was a 10 per cent increase in visitors to the company's website, with 15 per cent of those people using the online 'car builder' software, Davis said.

According to the Motor Industry Association, Toyota remained the overall market leader in April with a 13 per cent market share, followed by Ford with 11 per cent.

In late March, Toyota announced car dealerships would become agents for the company rather than being the middleman, in turn cutting the price of all new vehicles by up to $10,000.

As a result, there would no longer be any negotiation over what customers pay.

On Tuesday, AA motoring services general manager Stella Stocks said it was early days, and people were probably still trying to get their head around the new policy.

Toyota New Zealand chief executive Alistair Davis says the drop in sales was expected.

'It's only been going a month. I think [we'll have to] wait and see. See what people are doing, and what people are thinking.'

In April, Dr James Richard, of Victoria University of Wellington's school of marketing and international business, warned the company could face some backlash from potential car buyers over its 'no haggle' policy.

Toyota's 51 dealerships around the country now stock demonstration cars, not sale stock.

Customers must order online, or through the dealership. The vehicle will then be delivered to the customer from one of three warehouse hubs in Auckland, Wellington, and Christchurch.