Toyota NZ introduce 'haggle free' fixed pricing model
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The days of haggling over the price of a new car may be over if New Zealand’s largest distributor, Toyota, has its way.
From Tuesday it introduces a “haggle free” fixed pricing policy where it reveals to the customer the drive-away price of the vehicle.
Toyota dealers will not be allowed to discount new vehicles to beat their colleagues at other Toyota dealers.
Nor will they have a stock of vehicles on their lots to sell customers, but instead Toyota will provide them with demonstrator vehicles only.
Once a customer has decided what to buy, their vehicle will be sourced from three large Toyota hubs, in Auckland, Wellington and Christchurch.
Toyota New Zealand chief executive officer Alistair Davis says as a result customers will save time and money, and have more choice.
The changes could reduce current recommended retail price levels by thousands of dollars on some models.
The aim was to eliminate the ‘hard sell’ showroom experience which customers disliked so much, along with what had become for some customers a “stress test” rather than a pleasurable road test of the new vehicle.“We want to put the pleasure back into buying a brand-new vehicle,” he said.
“We are taking a more customer-centric approach to car buying and the entire ownership experience.”
Alistair Davis, Managing Director and CEO of Toyota New Zealand. Photo / Supplied
Toyota research had found the selling process had not changed much in the last 50 years, but now most customers were going online to research options before buying.
“We’re not alone in having made new vehicle purchases a drawn-out affair that takes the gloss of the experience,” he said.
Research showed the most common problem buyers had was the negotiation over the price, and not being sure if they got the best deal./ The research also found the right vehicle for the buyer’s needs was more important than the best price.
Dealerships would now be called stores, and prices would be the same throughout the more than 50 operations selling new Toyotas.
“Prices will now be haggle-free and will represent a significant reduction form previous ‘Recommended Retail Price’ prices,” he said.
Toyota would also offer a wider selection of vehicles form the three hubs to remove any pressure to buy from a limited selection of available vehicles at the dealership.
“Our research has told us people want product specialists and not just ocmmission focussed sales people,” he said.
“We are putting considerable focus on training our people to offer hospitality and a great customer experience.”
Sales people had been re-training as vehicle consultants, product experrts of the store concierge to help customers select the best vehicle for their needs.
Mr Davis said traditionally test drives were a 10-minute drive around thge block without the chance to properly evaluate the vehicle before buying.
But Toyota would now be offering more flexible opportunities, such as taking the vehicle home for the night, before deciding on a purchase.
Mr Davis said the new pricing would be called the “Toyota Driveaway Price (TDP), and would include the cost of the vehicle, registration, a full tank of fuel, a service package, floor mats, and 1000kms of pre-paid Road User Charges on diesel vehicles.
Vehicles would be delivered from the three hubs, through the local Toyota store where consultants would be paid based on how happy customers were at the end of the process, by way of customer satisfaction surveys.
Mr Davis said an online build-your-own tool would allow customers to customise the vehicle, in their own time. Customers could then take a copy fo their personalised vehicle to the Toyota store to order the vehicle.
Toyota would be removing uncertainty over the future costs of servicing by offering a capped price servicing for four years or 60,000kms.
The Toyota “Drive Happy Project” would begin operating on Tuesday next week.
Toyota is the largest vehicle distributor in New Zealand, claiming almost 21 per cent of the market last year. One in four new vehicles sold in New Zealand is a Toyota.