Toyota defies the critics

Toyota Australia is on course to defy critics who predicted a senior executive ‘brain drain’ would impact its 2018 sales performance.

While Australia’s total new-vehicle market is down 0.2 per cent to July this year and the last two months have been slow, Toyota remains the dominant market leader with an 18.6 per cent share and its sales are up 1.4 per cent.

With 128,769 registrations to the end of July it could end the year pipping its third highest annual figure of 218,176 sales, set in 2012.

More importantly in some ways, it should also top its 2017 sales tally of 216,566.

The brain drain commentary arose after Toyota announced it was moving its marketing and sales organisation to Melbourne from its decades-old home in the Sydney shire of Sutherland as part of the consolidation prompted by the late 2017 closure of local manufacturing.

A bevy of senior executives elected not to make the move to Melbourne, prompting concern that Toyota could not maintain its market dominance with so much expertise out the door. Melbourne-based executives also elected to call it quits at the end of 2017.

The concerns and the measures Toyota was taking to solve the issue were reported by motoring.com.au here.

Marketing and media website Mumbrella picked up on the ‘brain drain’ theme in 2017, quoting several former executives, including Toyota sales and marketing legend John Conomos, who were critical of the restructure.

“I would have totally opposed the move to the south,” Conomos told Mumbrella.

“It was always going to be a huge wrench. The DNA of the sales and marketing operations are in Sydney and you cannot transfer that DNA.”

Among the lost executives was Dave Buttner, who retired from the presidency and was replaced by Matthew Callachor. In the last few weeks Buttner has been appointed the new boss of Holden.

Toyota Australia marketing and sales vice-president Sean Hanley, one employee who made the move south, said the new executive team was conscious of the criticism surrounding the Melbourne move.

“I am not angry about those comments — they were realistic. They were what people looking in from the outside would think,” Hanley said.

“But here we are today, it’s August, and our sales are growing, our share is growing, we have a wonderfully strong and good company led by our president Matthew [Callachor], who is doing a marvelous job.

“So, when I look at that you understand Toyota is not about one single person, it is about a lot of people who contribute.”

Hanley revealed the new Toyota Australia executive team set itself a specific sales goal for 2018.

“We said if we can sell one more car in year one than what we sold in 2017, we will be happy,” he explained.

“So, if we can sell a few thousand more than what we sold in 2017, we will be ecstatic.”

Despite the recent softening of the market, Hanley predicted the year would finish at 1.195 to 1.2 million sales, which would top the 1,189,116 million record set in 2017.

“I think the market will recover pretty quick and I expect we will have a stable market,” Hanley said. “Generally, Australia’s market is in good shape.”

However, he tempered that adding he wanted to see another couple of months’ data. Current economic concerns he cited were the declining housing market, tighter lending practices and the severe drought gripping much of Australia. Conversely, he was encouraged by low unemployment rates.

“We are not approaching it in a pessimistic way, we are approaching it optimistically,” he said. “But we are certainly watching it closely.

“We are acutely aware of the impact of the drought conditions in the next summer. We sell a lot of our vehicles to regional farmers.

“We are working very closely with our dealers to understand the impact and what types of initiatives we can enact to support the farming community, which have been so loyal to us forever and a day.”