Toyota’s Future Bright, Exec Says

Toyota dealers have a lot to celebrate this week as David Christ, group vice president/general manager of Toyota, and other leaders detail the automaker’s recent successes.

The 1,200-plus U.S.-based dealers gathering in Las Vegas from Sept. 10-12 will hear about an array of new proprietary tools and plans to continually support increased profits and strong sales.

“We don’t publish numbers, but dealer profits are very healthy and historically strong,” Christ tells WardsAuto. “Our incentive spend is about half of the industry average and part of the reason for that is our days’ supply is very low."

Cox Automotive reports the average industrywide July incentives were 7.0% of average transaction prices, up from 6.4% in June. That makes incentives 59.1% higher compared to one year ago, when the average incentive package was 4.4% of the average transaction price in July 2023.

Although days’ supplies of cars on dealer lots fluctuate dramatically by brand, Toyota shares numbers with WardsAuto that show Toyota Motors North America arguably has the lowest numbers in the industry: a 29-day supply of trucks and a 21-day supply of cars. Those are the number of days it would take dealers to clear all cars from their lots.

“The reason our inventory remains so low is our brisk sales pace,” says Christ. “We’re basically pre-selling most (vehicles) before they arrive at dealers’ lots. Our products remain in very high demand. It’s not a function of us not being able to build. We actually hit very strong levels of production. Our cars sell very, very well, and that’s a great, great story.”

And Christ says Toyota is determined to continue to lead the pack. One way is with the introduction of a proprietary digital retailing component called SmartPath. The latest element allows dealers and customers to fully complete purchases online.

Although many dealers and other automotive retail partners have struggled with cybersecurity issues this year, Christ is confident SmartPath can withstand all types of potential attacks. The system is composed of various components, including sales, service and F&I so that dealers can choose the elements that make the most sense for their stores.

“We actually feel that our cybersecurity offerings are one of the really compelling reasons to go with SmartPath,” he says. “All of the data policies and procedures we use for SmartPath and data transmissions are the same type of expectations that we would use for internal, proprietary information.”

It took the automaker more than a decade to develop SmartPath, which was born from discussions with dealers. Toyota is currently rolling out the F&I component of the digital tool, and about half of U.S. dealers currently offer it, Christ says.

“We found it to be incredibly helpful in simplifying and speeding the customer experience. So, we’re super excited about it. Our dealers love it, and all of the enhancements to the product come from dealers’ recommendations,” he says. “We're using Toyota (headquarters’ strongest-) level data encryption and data security. When a dealer signs up with SmartPath, we’re really excited to share that their data is as safe as it would be during a communication (with Toyota leadership).”

Other messages leaders plan to share with dealers include what Christ calls a continuing “product renaissance” – a reinventing of the automaker’s products in almost every key segment. Examples include new body-on-frame pickup trucks, all-new body-on-frame SUVs and unibody SUVs. Toyota also has invested almost $14 billion in a North Carolina plant to produce lithium-ion batteries for electric vehicles.

“No matter where government regulations go (following the upcoming elections), we’re going to have capacity to build those batteries for future vehicles,” says Christ. “So overall, I think it’ll be a really, really positive couple of days. Our message is, the future is very bright.”