Toyota eyes move into auto insurance

[toyotafanfan]

Toyota eyes move into auto insurance

Company's push into new market is part of aggressive plan to expand Canadian sales

GREG KEENAN
AUTO INDUSTRY REPORTER
September 17, 2007

TORONTO -- Toyota Canada Inc. is considering entering the car insurance market as part of an aggressive expansion plan that includes boosting its annual vehicle sales to 250,000 by 2010.
"If everything goes well, we want to [offer insurance] within a year," Toyota president Yoichi Tomihara said.
"If the hurdle is higher we have to spend more time." He added.
Toyota offers vehicle insurance in several other countries, including Japan, Britain, France, Germany, Australia and Thailand.


The Canadian division of the world's richest auto maker would make sure its insurance operations match the same quality standards as the rest of its business, Mr. Tomihara emphasized. "We are studying this - very positively studying this."
Most vehicle companies in Canada have financial services arms. Toyota would be the first to enter the auto insurance market, although its presence would probably be limited to Ontario, Alberta and Atlantic Canada, where the auto insurance market is private. Publicly run systems are in place in the other provinces, with a hybrid public-private market in Quebec.
The ability to sell insurance through an existing dealership network would give an auto maker a major advantage at the outset; however it is not clear to what extent such a move would shake up the market, said Ryan Lee, a professor in the department of risk management and insurance at the University of Calgary's Haskayne School of Business.
It depends on whether Toyota considers insurance a marketing tool to help sell vehicles or whether the company would get in it to make money, Mr. Lee said.
"A traditional insurance company is not going to be in it to lose money," he noted.
Mr. Tomihara has been on the job eight months in Canada after heading up Toyota's operations in Germany.
He said he is not interested in sales rankings and whether Toyota surpasses Ford Motor Co. of Canada Ltd. or Chrysler Canada Inc. to take over second spot behind General Motors of Canada Ltd.
Generating sales of 250,000 vehicles annually was routine for Ford in the 1990s and Chrysler in the latter part of that decade, but since 2004, neither company has been able to exceed 230,000 in annual sales.
Toyota is on track to sell 205,000 cars and trucks in Canada this year, Mr. Tomihara said, which means a jump to 250,000 by 2010 would be a 22-per-cent increase.
He said he considers it his personal task to increase sales of hybrids so that they represent 10 per cent of the vehicle company's sales by 2010, compared with about 4 per cent this year.
He drives a hybrid version of the company's Lexus RX crossover utility vehicle.
Improving customer satisfaction, better brand communications and stronger relationships in communities will also contribute toward meeting the target, he said.
"When I arrived here, I found the Toyota image is quite good, but very much dependent on quality and durability - rational needs rather than more desirability or emotional reasons," he said during an interview in the boardroom of the company's head office in the east of Toronto.
The target of 250,000 is aggressive, said Richard Cooper, executive director of the Canadian operations of J.D. Power and Associates in Toronto.
"The issue will be the overall growth in the Canadian market," Mr. Cooper said. The consulting firm is not expecting rapid growth in vehicle sales in Canada over the next 2½ years that would allow Toyota to get to 250,000 simply on the basis of an expanding market.
Power forecasts overall sales of 1.68 million vehicles in Canada in 2010, up a little less than 4 per cent from the 1.62 million forecast for 2007.
But Mr. Cooper pointed out new versions of such vehicles as the Tundra pickup truck will help boost sales. Power is forecasting sales of 17,000 Tundras for Toyota by 2010, compared with less than 3,000 last year.
Indeed, Mr. Tomihara said he hopes Toyota's sales of trucks, sport utility vehicles and minivans will equal its car sales by the next decade.
Toyota sells more than two cars in Canada for every truck it sells here.

[rolla-XRS]

Hummm...interesting. Wonder if this article is a "trial balloon" to gauge interest from the public.