Toyota has seen its production, sales and reputation battered by an earthquake and tsunami and numerous recalls in recent years. The most recent blow came in October when the auto maker announced a callback of 7.4million vehicles worldwide to repair a power-window switch that could pose a fire risk.
But Bob Farlow, general manager of McGeorge Toyota in suburban Richmond, VA, is still bullish on the brand.
“Toyota has been through some ups and downs over the last couple of years, but I can tell you they are focused on one thing, and that is getting back to where they were in terms of market share,” he says.
At a recent national dealer meeting in Las Vegas, Toyota executives announced seven new or updated Toyota and Scion models to be launched in 2013. Toyota sales are on an upswing. The auto maker expects to sell more than 2 million vehicles in the U.S. in 2012, the first time that has happened since 2008.
If that prediction comes true, it will mean good news for McGeorge. “Business has come roaring back for Toyota and us this year, given what we faced last year,” Farlow says. “2012 is shaping up to be a great year for us.”
The original David R. McGeorge Car Co. was founded in downtown Richmond in 1964 and sold BMWs, Fiats and Triumphs until Toyota offered a franchise in 1968.
“Bobby McGeorge, the son of founder David R., had the foresight to pick up the franchise, and he actually sold BMW to get Toyota,” Farlow says. “I wish we had kept BMW now.”
Today, in addition to the Toyota dealership in Henrico, northwest of downtown, the McGeorge family owns two Mercedes stores in the Richmond area.
McGeorge Toyota ranks No. 92 on the 2012 WardsAuto Dealer 500 with $117,298,765 in total revenue. The facility occupies 60,000 sq. ft. (5,574.2 sq. m) on nine acres (3.6 ha).
That includes a new-car facility built in 2005 to Toyota’s brand-identity specifications, a Toyota Certified used-car center and a body shop. McGeorge’s investment in the new-car building was more than $9 million, money well spent as far as Farlow is concerned.
“In our case, it was absolutely the correct thing to do, based on our footprint and the amount of business we’re doing,” he says. “I don’t think anybody likes to spend $5 million or $10 million, but in terms of serving the customer, our new facility absolutely fits the bill.”
The new building offers growth opportunities, Farlow says. “If we were in our previous facility, there’s no way we could do what we’re doing now.”
In addition to the facility upgrades, Farlow’s confidence stems from Toyota’s products, his employees and the dealership’s reputation in the community.
“Our repeat business is very high because of the trust that we’ve established with our customers and employees,” he says. “We’re all proud to work for a dealership where we have full authority to do whatever it takes to satisfy a customer.
“If we do something wrong, we own up to it quickly and fix it even faster so the customer knows that we do care. If you respond rapidly and right the wrong, that customer is actually more loyal than the one that never had a problem.”
Farlow says product will be Toyota’s strong suit going forward. The Camry sedan and Corolla compact both are set to undergo major redesigns for the ’14 model year, and will remain McGeorge Toyota’s volume leaders. But Farlow particularly is excited about the ’14 Avalon fullsize sedan. He says it will set a new standard for luxury, ride and handling.
“I think it’s going to bring BMW, Mercedes and Lexus customers into our showroom, which we’ve never seen,” he says.
He also has nice things to say about the Scion FR-S, a sporty car that debuted this year. “It has sold out since it was introduced,” he says. “We can’t keep those on the lot.”
Following record sales of 4,148 new and used vehicles in 2007, dealership sales fell to 3,063 in 2009. Through September of this year, however, McGeorge has seen deliveries increase 42% and revenue top $100 million. Farlow predicts his store this year will best the 2007 record.
“If there is any cloud on the horizon, it’s that the number of ‘need’ buyers is outpacing the ‘want’ buyers,” he says. “Buyers with 3- to 6-year-old cars are not quite in the market at the level we’re used to seeing.
“People have held onto their cars too long, and their values are much lower. An ideal market would be a customer who’s trading a car every six or seven years.”
McGeorge Toyota is one of only 20 dealers in the country to have received Toyota’s President’s Award for sales and service excellence for 16 consecutive years. The average salesperson has been with the company more than seven years and technicians have an average tenure of more than 10 years.
Sixteen McGeorge salespeople are Toyota Master Certified.
“There's a continuity that comes from having the same very talented folks with you over time,” Farlow says. “Customers see the same faces when they come back in, and for a lot of businesses, not just car dealerships, that’s an oddity.”
In order to keep its talent, McGeorge offers employees a 401K retirement account match. The company was one of the first to offer a high-deductible health insurance plan that can save employees thousands of dollars a year. Owner Rod McGeorge once arranged for an employee to move into a furnished rental property after the worker’s home was destroyed by fire.
“We’re always thinking how we can better serve our employees so that they can better serve our customers,” Farlow says. “We believe the way to true customer satisfaction is to have high employee satisfaction.”
Farlow is leveraging McGeorge’s good-neighbor reputation in its advertising. The dealership launched a series of feel-good TV spots featuring the trusted characters of a mom, fireman and coach. The goal is to associate trust with McGeorge Toyota.”
“We’ve done research to learn what the dealer’s reputation is in the marketplace, and we think there’s an opportunity to stand out in a sea of creative work from other dealers,” says James Setaro, account supervisor at Richmond ad agency Barber Martin, which did the ads.
“You don’t have the ‘Crazy Eddie’ sales messages beating you over the head,” he says. “It’s a more subtle approach. It’s warranted that they have that difference. We felt very comfortable promoting that message of trustworthiness,g because we know it can be backed up.”
