Toyota Dealers Lament Tough Times

Special Coverage

NADA Convention & Exposition

SAN FRANCISCO – It’s bad out there when Toyota dealers complain about slow sales.

That’s what is happening, demonstrating even the strongest automotive brands aren’t immune to the nation’s economic slowdown.

It’s a situation that prompts James Lentz, president of Toyota Motor Sales U.S.A. Inc. to try to rally the troops at an event during the National Automobile Dealers Assn.’s 2008 convention here.

“When good Toyota dealers say some sales are off 60%, I know things are out of kilter,” he tells a meeting of the American International Automobile Dealers Assn.

But Lentz remains optimistic, saying, “We’ll get through this year, and the challenges will make us stronger.”

He cites a growing population and Baby Boomers living and driving longer as reasons for declaring good times are not gone forever.

“By 2011, we’ll be selling to five generations at the same time,” he says. “That has never happened before in the U.S,” noting annual U.S. sales could reach 18 million sometime in the next decade.

James Lentz

Meanwhile, Lentz forecasts 2008 sales at 16 million units, a number that is more hopeful than some predictions.

Paul Taylor, NADA’s chief economist, earlier told conference attendees he sees sales dropping to 15.7 million units this year, compared with 16.1 million in 2007.

“Not long ago, 16 million units was seen as a great year, not just an industry birthright,” Lentz says.

Given that customer traffic will be “a touch down this year,” he sees it as a perfect time for dealers to streamline processes and speed up the buying experience so it is more convenient.

It’s also a good time to focus on the service department, a strong profit center and where customer satisfaction is crucial, Lentz says. “If we make a great impression in the service lane, we increase the chances of a vehicle purchase in the showroom.”

“So hang in there,” he says. “Skies will be clear. Things will be better.”

Listening to those exhortations is Charles Dean, general sales manager at Roseville (CA) Toyota, north of Sacramento. “There was a time when people were lined up asking us to sell them a Toyota,” he says.

But that’s changed. The nation’s economic slowdown has hit his area hard, particularly the real-estate downturn, leading to softer dealership sales and more customers keeping their cars longer.

Dean wonders if all dealers will make it through the tough times. “The proactive and creative dealers will survive, but there are others who might not,” he says.

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