Toyota to merge Tokyo Sales Companies to form new company in April 2019
OREANDA-NEWS. Toyota Motor Corporation (Toyota) announces plans to merge its Tokyo sales companies on April 1, 2019. The companies to be merged are TOYOTA Tokyo Sales Holdings Inc. (TSH), a wholly-owned subsidiary of Toyota, and the four TSH subsidiaries, Tokyo Toyota Motor Co., Ltd., Tokyo Toyopet Motor Sales Co., Ltd., Toyota Tokyo Corolla Co., Ltd., and Netz Toyota Tokyo Co., Ltd. Management intends to examine the details of this merger over the next year. The auto manufacturer also disclosed plans to sell Toyota Nishi-Tokyo Corolla Co., Ltd., also a wholly-owned subsidiary of TSH, to Netz Toyota Tokyo in or around September 2018.
This merger is in accordance with the J-ReBORN plan Toyota launched in 2016. Under this plan, Toyota and its domestic sales companies aim to revitalize Japan and individual regions throughout the country, and in line with this, the company is transforming its business model. To this end, Toyota is shifting its focus from sales channels to sales regions and is looking to revise its structure and work style to reinforce cooperation with customers, local government, and other companies in each sales region, and ultimately aims to provide new mobility services.
In central Tokyo in particular, where public transportation is firmly established, there is a shift from car ownership to car usage. Central Tokyo is also an area noted for brisk competition in the premium market, which boasts a high share of imported automobiles. Meanwhile, private car ownership remains the steadfast trend among consumers in suburban areas, including people living a car-centric lifestyle. Toyota believes that the way cars are used in Tokyo varies depending on what part of Tokyo a consumer resides. Through the integration process, Toyota will examine how to develop a structure to promote Tokyo ReBORN, which aims to undertake regional issues that are unique to the Tokyo area.
Specifically, the new company is to be primarily comprised of a Toyota business unit, and a Lexus business unit. For the time being the four sales channels of the Toyota business will be maintained as an in-house company within the Toyota business unit. In addition, the Lexus business, whose sales companies are currently under separate management, is to be concentrated under the auspices of the Lexus business unit in the new company. Toyota's aim is to expand its share of the premium market chiefly by efficiently expanding its dealer network and by concentrating its resources. Also, by selling Toyota Nishi-Tokyo Corolla to a local company, Toyota aims to provide more localized services.
According to Yasuhiko Sato, senior managing officer and chief officer of the Japan Sales Business Group at Toyota, "Tokyo cannot be summed up in one word, as it consists of various regions, lifestyles, and car usage." Sato believes that, "In addition to it being the largest car market in Japan, Tokyo is likely where we will see the first changes in customer needs in Japan ahead of the Olympic and Paralympic Games Tokyo 2020. Consequently, under Tokyo ReBORN, Tokyo's directly-managed dealers aim to take the lead in tackling anticipated changes in consumer demand in Japan. Under this plan, we aim to develop the best dealers in a region that is able to swiftly undertake local issues. This includes developing new dealers that make full-fledged use of the latest IT, creating joint dealers that manage cars from all channels, the launch of ride-sharing services, the provision of mobility services that will delight senior customers, and a lineup of new services that will be valued by our corporate clients."
Sato went on to state that, "Tokyo ReBORN represents Toyota's commitment to the ongoing challenge of contributing to a car business that is both ideal and captivating."