The following are notes from our FaceTime with Mr. Riffee.
Notes:
Jim Moran largest Ford dealership network. Relocated to Florida after he got cancer. Recovered, Pontiac dealership developed. Toyota contacted him and he started partnership with them. Largest Toyota dealership in the world… 12.5 billion revenue last year. Mostly southern states. 176 dealers in 5 states. Just under 400k units last year.
Approach the game differently- Instead of wholesaling vehicles they bring marketing solutions to the distributors.They HELP them sell cars. This explains their success. The distributor to retailer chain is much more beneficial.
Q&A:
Q: What is the difference? Why are you better?
A: Toyotathon. Incremental incentive support out of our own coffers. Service revenues is the highest in the US. Most profitable dealers. Customer satisfaction is amazing.
Q: Concrete example of how SET is different from a nissan dealer.
A: Extremely targeted marketing. Very good service system. Deliver real time parts rather than two days they deliver in one. Call center that supports dealerships, reminding customers of their meetings.
Q: Why is it more effective to sell through distributors than to sell directly?
A: Franchise laws hold back companies like Tesla. Retailers can do things manufacturers can’t.
Q: Was Jim Moran just great at selling stuff or is the product great. If he was selling Teslas would they be flying off of the shelf?
A: No. They are too expensive and there isn’t enough electric vehicle infrastructure.
Q: Ford is changing the way they make pickups (Aluminum f-150), do you see Toyota changing as well?
A: Tundra is growing but f-150 has staggering market share. We are a distant fourth. We focus on our more fuel efficient cars.
Q: How does TRD stack up against Ford Raptor?
A: TDR components are pieces you can equip your car with not a whole different car.
Q: Is there room for middle men (Online dealerships)?
A: Truecar aren’t necessarily representing all information about the cars. The intent is good for the consumer but it is cancerous because it isn’t transparent enough.
Quotes are not direct. And may not represent the ideas and opinions of those described.
I found it interesting that Rifee gave a very conservative outlook into Toyota’s pick up truck sales and development going forward. Although, Toyota is known for its fuel efficient smaller cars and smaller SUV’s, the Tundra and Tacoma both experienced around 10% growth in sales numbers from 2012 to 2013. This fairly large increase in sales shows that there is definite growth in the sales of Toyota’s new pick up trucks. Although Ford, Chevy, and Dodge are definitely the Big 3 when it comes to pick up trucks, Toyota has surpassed GM in total sales.
The reason Toyota may not be that excited about their growth in the pick up truck market is because trucks can only really be marketed in North America rather then globally. Also trucks are the hardest cars to get to comply with the 2025 CAFE standards, and it’s going to be hard to take any market share from Ford in the future, especially with the new release of the aluminum F 150 a very well designed and innovative automobile.
I hadn’t thought about how the middlemen might make false promises and make the dealers look bad. The middlemen market themselves as promoting sales at the dealership, but he’s right, I would be upset with my dealer if I had heard that I could get this certain deal or whatnot and I wasn’t able to.
Yes, the TrueCar model has lots of … issues. My co-blogger at Autos and Economics gained a share of notoreity by pointing that out, how the initial TrueCar model was in effect asking dealers to give away the store, and that dealers shouldn’t be taken in by a promise of better internet marketing (at which many dealers, er, suck). Of course such issues aren’t absent in franchise systems, one reason why there are state-level legal restrictions.