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Toyota Relocation

Toyota Relocation from California to Texas Coming Soon

JKRAdvertising / Uncategorized /

April 28, 2014

A Toyota relocation announcement could come any day. Many major media outlets say Toyota is set to move significant portions of its U.S. operations from their current location of Torrance, CA to suburban Dallas. Toyota employees are expected to be made aware of the move today.

This announcement is a major blow to California, currently the largest auto market in the country – and also the strongest proponent of environmentally friendly vehicles. It is rumored that most of those making the Toyota relocation move would come from the sales and marketing departments.

Those Affected by Toyota Relocation

How many employees will decide to make the move? When Nissan relocated their corporate facilities in 2006 to Tennessee, only 42% opted to relocate with the company. (Of course, this news comes on the heels of an already-announced restructuring of the Torrance facility. Some Toyota employees will be given different jobs within the company, while others will be offered a “voluntary exit program” they can choose to use if they wish. Toyota currently employs more than 5,300 in their California facility, but at this time it isn’t clear how many will be asked to relocate.

Why is the Toyota relocation being made? Mostly because it will save Toyota big dollars in production costs. Texas Governor Rick Perry has made a number of trips to the Golden State in recent years in an attempt to coax major companies to relocate to his state. His theme was to promise them lower taxes and easier regulations … and this time, it appears to have worked.

Toyota first made its way to California in 1957. Last year, it made a record $18.3 billion of income, but this was offset by $1.2 billion in fines it must pay to settle the recent U.S. Justice Department investigation. All told, Toyota sold 2.24 million cars and light trucks last year, not far off the 2007 record of 2.62 million.

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Post-Pandemic Dealer Gross Profits are Down – But They Don’t Have to Stay There!
March 13, 2024
It is no secret that dealer gross profits per vehicle are down sharply in the post-COVID automotive world. According to a recent article in Automotive News, gross profits of the six largest publicly traded dealership groups plunged significantly from Q4 2022 to Q4 2023. One of them was actually down 35% per vehicle!

The article explains: High interest rates, more expensive vehicles and a steadier post-pandemic supply chain continue to soften demand and bring it closer to pre-pandemic levels. Still, new-car buying has remained strong overall …

This means that, while sales volume is similar, overall bottom lines are lower for many dealers due to the reduced gross profits. What about your dealership?

Being Realistic
It’s time to turn the page! The time for dealers to simply be order takers for people willing to pay MSRP for a vehicle (and in some cases more) has passed and dealers have to work hard once again to achieve acceptable gross profits.

Selling a high volume of cars doesn’t control gross profits, no matter how much you wish this was the case. Correct processes and menu pricing – and strict adherence to them – do!

What kind of processes?
∙ Slow down the transaction! Your sales staff has to once again sell the customer on the features and benefits of every new and pre-owned vehicle on your lot.

∙ Your salespeople and managers should devalue the customers’ trade-in value (politely, of course) as much as possible. After all, if the customer expects you to lower your price, shouldn’t you be able to do the same on their trade? Remember, you’ll have to fix it up, put your name on it and resell it to someone else with all the tenacity you would a brand-new car. So make sure you buy it right … because the profit is made when you buy it, not when you sell it!

∙ To that end, management should be ready and willing to leave the desk and do thorough walk-arounds on each trade to ensure the best outcome for the dealership.

The Cure for Low Gross Profits
If you are like a lot of dealers these days, you could use some good news. Here it is: while you may not have the capability to achieve profit margins similar to those you enjoyed during the pandemic, they could likely be improved. JKR’s clients enjoy the benefit of attracting not only more customers, but better ones, too!

If meeting and exceeding your sales goals (and increasing gross profits at the same time) sounds great to you, you need to call us. Don’t settle for reduced gross profits when help is out there to get you closer to where you’d like to be.

Want to know how we do it? Reach out to Senior Partner Richard Brauns (407) 701-4233 or Partner/Vice President Jon Albert (407) 718-2494 today.

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