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Toyota Financial Services Reorganization a "Win/Win": Borst

December 1, 2000

Toyota Financial Services U.S.A. is restructuring its field operations a month after separating from Toyota Motor Sales. The primary goal of the reorganization, according to TFS, is to provide enhanced dealer sales and service. “The new structure will mean more field office locations and fewer dealers per sales associate, thus increasing our high-touch dealer service,” said Tamara Sloper, communications manager at TFS.

The current 33 branch offices will be refocused to strengthen sales and dealer service, according to Sloper. These offices will be renamed Dealer Sales and Service Offices (DSSO’s) and will handle field sales for F&I as well as credit, purchasing, and wholesale activities. The DSSO’s will serve only dealer business such as purchasing contracts from dealers, floorplanning, capital improvement loans and consulting on F&I operations.

TFS is currently studying their market coverage to determine where new DSSO’s should be opened, according to Sloper. “In addition, we will also be keypointing some sales associates, having them work from their homes in locations that aren’t covered by a DSSO,” she said. “Once the new organizational structure is in place, there will be more associates servicing dealers from more locations than we do today.” The locations of the new DSSO’s will be announced in late January or early February 2001, according to TFS.

Other branch functions – administration, customer service, data entry/processing, collections and lease terminations – will be assigned to three regional Customer Service Centers (CSC’s). One of the CSC’s will be located in the current Toyota Financial Service Center in Cedar Rapids, Iowa, and will serve the Central Region. Cedar Rapids will also continue to be responsible for all insurance processing activities on a nationwide basis. The Western Region CSC will be located in Phoenix, Ariz. The Eastern Region location will be announced in late January or early February 2001.

The rollout of the new structure will go by regions: The Western Region will lead off in the third quarter of 2001, followed by the Eastern Region in the first quarter of 2002 and the Central Region (Midwest) in the second quarter of 2002.

The three regional offices will handle all customer calls, with a telephone system that rolls over to another region when one region closes for the day, giving finance customers the ability to reach Toyota for 12 hours a day.

According to Sloper, job retention is a priority. “We are committed to retention of our associates,” she said. “All performing associates whose positions will be affected will be offered comparable positions in the new organization, and those who are affected geographically will be given the option and financial support to relocate.”

About 2,000 of Toyota Financial Services' 2,700 U.S. employees are in the field, with about 400 employees already stationed in Cedar Rapids. Toyota is still determining the exact placement of employees.

According to George Borst, president and CEO of TFS, the streamlining will embody Toyota’s “High Tech/High Touch” philosophy, taking advantage of technological improvements while at the same time emphasizing relationships with dealers.

“If you think about Toyota Financial Services, we have today the identical structure we had 15 years ago,” Borst told F&I Management and Technology. “We’ve essentially been booking contracts the same way we did 15 years ago, but there have been enormous amounts of improvement in technology.” According to Borst, the reorganization will allow TFS to take advantage of those improvements.

“At the same time, though, this is a relationship business,” Borst said. “The relationship we have with the dealers is key to our success. What we’ve tried to do in this restructuring is combine the best aspects of High Tech/High Touch.”

Borst said that technological advancements enable TFS to do many repetitive-type processes more economically in centralized environment; the restructuring will thus entail consolidating such functions as customer service, collections, lease terminations and administrative functions to three regional Customer Service Centers. “When you think about it, it’s easier to train people in three locations than in 33 locations," Borst pointed out, “so the people who interact with the dealers’ customers will be better trained and more productive.”

According to Borst, with the DSSO’s focused purely on servicing dealers, dealer service will go up dramatically. “The better we service the dealers, we believe the more volume they’ll give us,” Borst said.

“We have built our reputation and our position in the industry by providing great service to automotive consumers, dealers, and the Toyota companies that we support. Satisfying dealer needs, and those of our customers, remains a top priority and is the principal reason we believe these organizational changes are necessary,” Borst told F&I. “I assure you that we intend to maintain our high-touch, high-quality service as we continue to improve and evolve.”

According to Borst, when dealers route their customers through TFS, brand loyalty to Toyota or Lexus increases from 40 to 50 percent. “That’s not our number; that’s a J.D. Power number,” Borst said. “So by getting the dealers to increase their business with us – the relationship part – down the road, their repeat business will go up as well. It should be a win/win for everybody.

“This is a relationship business,” Borst concluded. “We want to make sure we have the best relationships of any F&I provider out there.”

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