Toyota targets a 25 per cent market share

THE message from ever-ambitious Toyota Australia executive chairman John Conomosis blunt: 200,000 sales in one year is a laudable achievement but now the aim is for 250,000 sales and a 25 per cent new-vehicle market share.

Do the maths and you can see that Mr Conomos has not only set the bar much higher for Toyota Australia, but is also forecasting the coming of the one-million car market.

He expects the magic million to arrive in 2006/07 along with the next generation of locally manufactured cars – the VE Holden Commodore, the next Ford Falcon, Toyota’s own Camry and Avalon and Mitsubishi’s Magna replacement, which is the first of the LMs to arrive in October 2005.

And Toyota Australia’s 25 per cent share? That might take a little longer – more like the turn of the decade.

"Our plans require us to take a greater market share, so in the long-term in a million units we would have hopefully around 25 per cent market share," Mr Conomos said. "That’s a hell of a challenge."It’s a challenge that Holden set itself several years ago and has failed to reach. But this sort of forecasting is typical of Mr Conomos, who often publicly announces demanding targets as much for internal as external consumption.

But such is his and Toyota Australia’s track record very few would be prepared to bet against the objective being achieved.

After all, Toyota’s 2004 results are pretty strong supporting evidence. In selling 201,737 vehicles, it became the first single brand to break the annual200,000 sales barrier in Australia.

It won the market for the second year running, increased its share (while second-placed Holden dropped), grew faster than a record market and hit the 200,000 target a year ahead of schedule despite shortening supply of the big-selling Corolla and Hi-Lux.

And it did all that without launching a single significant product update or all-new model. How?"Many people ask me about that and privately a lot of competitors do off therecord," Mr Conomos said. "First of all, it is very careful planning, consideration and commitment to ambitious goals.

"Once we determine our target, no matter what it is, we just ruthlessly pursue it to ensure that those ends are met in a good business manner.

"Secondly, you have got to have a parent which has got the commitment to really first-class product. You have to build the best cars, you’ve got to have a very good business outfit that can market, sell and distribute. We have a very goodnetwork.

"These sorts of successes are 'overnight 10 year successes' if you know what I mean."Toyota started planning seriously for 2004 three years ago, the company realising then that it wouldn’t have new product to keep its sales momentum up.

But there’s no more product pauses in sight, with the launch of new-generation Hi-Lux, HiAce, Echo light car and Rav4 compact off-roader (plus other updates) just a precursor to a serious model flood over the next few years.

That constant supply of new metal, which will be in the form of new-generation replacements for existing model ranges, as well as vehicles which take Toyota into new niches is vital if the 250,000 sales target is to be achieved.

"It (250,000 sales p/a) comes from freeing up of production capacity of existing models, it comes from the introduction of additional models andhopefully the third locally manufactured model we have been talking about for some time," Mr Conomos explained.

"Emerging markets, improvements in existing markets and capturing of youth markets sums it up in a general sense.

"Despite the new product tap being turned back on in 2005, Mr Conomos is predicting only incremental growth for Toyota to about 210,000 units and a virtually static market at 960,000, compared to this year’s 955,229 result.

"Timing and supply means there is no real opportunity for us to up the volume of our new cars," Mr Conomos said.

Australian sales targets part of an international vision

TOYOTA Australia didn’t just dream up the goal of selling 200,000vehicles in a single year, just as the new 250,000 target hasn’t beenplucked out of thin air. Both link back to Toyota Motor Corporation’sglobal sales vision.

TMC set Toyota Australia the 200,000 target as part of ‘Global 10’,where the Japanese giant would achieve 10 per cent of global newvehicles sales by 2005.

The 250,000 local target is part of Global 15, in which TMC aims fora 15 per cent share by 2010 and almost certainly the number oneranking in terms of sales ahead of current leader General Motors(although Toyota is already far more profitable).

Mr Conomos says the successes of 2004 adds to the Australiandistributor’s credibility with head office, and therefore its share ofvoice.

"In almost every market it participates in these days, Toyota is tryingto make the cars it can sell the most of in that country with reexportpotential," he explained. "So the demand on resources fromour parent by overseas affiliates is huge. It is far, far beyond theircapacity to meet those requirements."Mr Conomos pointed to the establishment of a TMC R&D centre inMelbourne and the development of a more Australian-specific Avalonreplacement as evidence of Toyota Australia’s high credibility.