Paul Barker grabs a cuppa and a chat with one of fleet’s most influential figures – Coffee with…Stuart Ferma, General Manager, Fleet, Toyota & Lexus GB
Toyota and its premium brand, Lexus, have found themselves in a promising position, being renowned as the leader in hybrid powertrains at a time where fleets are moving away from diesel and towards greater use of electrification.
QHow are you approaching 2021 from a Toyota point of view?
We see it as a year of opportunity, we’ve got some amazing product coming through. Last year ended on a real high for us, we increased our market share and ended up in a very strong position. By the back end of year, we started to see a lot more fleets coming over to us, and these were both user-chooser and also essential-needs fleets.
As such fleets gradually come out of using diesel-powered vehicles, we are almost the natural choice for them. That’s why Corolla is doing particularly well in that space for us at the moment, because of its hybrid credentials. When fleets are looking at alternatives, we seem to absolutely be on the consideration list, so we’re picking up a lot of new customers, which is really positive on the car side.
And the LCV side of the business is performing really well; the figures show we’re up 31% in commercial vehicles, while the market’s up 10%. And that’s driven by Hilux performing extremely well, while Proace, and particularly Proace City, is starting to gain a foothold in the marketplace.
TOYOTA IS SET FOR A BUSY YEAR OF NEW PRODUCTS ACROSS A VARIETY OF SEGMENTS
MARCH 2021 – HIGHLANDER
A large SUV sitting above the RAV4, the Highlander is being sold in the UK for the first time, although it is the fourth generation of a car offered in other parts of the world. The seven-seat hybrid costs from £50,595.
APRIL 2021 – PROACE EV
The electric version of Toyota’s mid-sized van will arrive this spring, with an official range figure of around 186 miles. It will be joined later in the year by an electric Proace City small van.
APRIL 2021 – MIRAI
The second generation of Toyota’s hydrogen fuel-cell car, which the Japanese brand is hoping will achieve a ten-fold increase in sales compared with the first model. As well as increased infrastructure and interest in fuel cell cars, that goal will be helped by a 30% improvement in range thanks to a larger tank, taking it to around 400 miles between fills, plus enhanced driving experience and practicality.
LATE 2021 – YARIS CROSS
Toyota makes an entrance into the baby crossover segment with a sibling to the Yaris hatchback, and a car that shares the 1.5-litre hybrid powertrain. It will sit below the Company Car Today Award-winning C-HR in the Toyota line-up.
QHow come Hilux has grown so strongly, with it being quite well established and you only very recently having launched the revision?
New Hilux with the new 2.8-litre engine is really helping, but it’s fair to say a great many of our core customers are in the construction and utility sectors, and obviously those segments are doing quite well at the moment. Customers have been waiting for the new Hilux and have taken those.
QIs some of your growth down to gaining new customers because people coming out of diesel see switching to hybrid as a sensible mid-term option while they establish how to go electric in the longer term?
We’ve been selling hybrid for many years; we were selling hybrid when the market was diesel, and we persevered with a message around our hybrid credentials.
A lot of customers are seeing it as an absolutely viable alternative when they want to make their fleet more ‘green’. Many businesses are using diesels at the minute and can’t really move to full-on electric vehicles because they’re not really practical for either the staff or for the needs of a business. With plug-ins, there are more and more options out there, but there’s also obviously a price premium on that. Hybrid, however, is a well-established alternative to diesel.
QHow important are things like the new plug-in RAV4 from a company car point of view, especially with the range being good compared with those of your major rivals?
The reviews have been fantastic so far, particularly the performance side. Combine that with the range, and the fact that obviously it becomes just a normal self-charging hybrid once the extra piece of the battery needs to be recharged. That’s one of the key differences for us versus some of the other products we face in the marketplace.
It’s a very welcome addition to our range and enables us to pursue even further in particularly the user-chooser market where people are looking at having the benefits around Benefit-in-Kind taxation, but also without any of the issues around range anxiety that you’d get with a full EV.
QAnd what’s the reaction been so far? What has demand been like in the early stages?
The initial demand has been fantastic and we are actually going to be putting a request in for more supply; we’re still pushing for that because demand is super-high on that at the minute.
QWhat else is going to be of interest to fleets in terms of new product from Toyota this year?
I think for me it’s the breadth of products that’s coming out. We have Highlander, new Mirai, Proace EV and Yaris Cross (see panel, left). In all of those are different technologies. Highlander and Yaris Cross are hybrid, Mirai hydrogen and Proace EV. And then we’ve got the electric Lexus UXe as well. It’s exciting to have such different technologies coming out into the marketplace to service, and to look after, all the different channels in the fleet market at the moment.
This really demonstrates that we’re technology-neutral. All the powertrains have got their own purpose, and it recognises different customer needs and requirements. And then obviously we’ve added in the new RAV4 plug-in hybrid, which has got that performance factor to it as well. In all, we’re really excited about the different technologies that we’re bringing out this year, and the expansion of our range into new segments and to help us get new customers.
QSo what would be your signal of success this year?
We want to increase our market share even further in core fleet channels; that’s what we’ll be focusing our major efforts on. Because you can look at market share in different ways, but we very much look at how we’re progressing in core fleet sales, and historically we’ve done very, very well in that regard. Last year we had a very good year in the true fleet channels and we’d like to see further growth in those channels with our new products.
QWhat else did you do last year to help drive market share growth in fleet?
I think there are a couple of things that have really helped. Undoubtedly, our product range has helped massively, but we’re working very closely with our customers and indeed the leasing industry around localisation, which really helped us last year.
We have very close relationships with a lot of the major leasing companies, and what localisation means is that we take the order from the leasing company and we give it to the local dealer.
That really helped us during lockdown, because in essence when we want one of our dealers to deliver a car, they only have to deliver it around the corner to the customer. And what we found was that if you had to distant-supply, then there were all sorts of factors that cause the problems, such as can you get hold of drivers, can they travel. Sometimes those drivers were of an older age group so therefore were shielding, which caused a lot of delays about getting vehicles out there.
That’s why localisation massively helped us during these lockdown and restricted-trading periods, because we were able to successfully deliver the vehicles to our customers in a Covid-safe way, in a timely manner by the local dealer who’s going to look after that car. That really helped us in 2020 and is still helping us now.
QIs that a benefit that will continue as we move out of lockdown or was it quite a specific thing around Covid-19?
The whole purpose of it was to give a great handover to our fleet customers, to the drivers, and to provide a great level of service and aftercare service by the local dealer to the local fleet, or to the local driver. So that’s a clear part of our strategy. And it just really came into even more benefit during lockdown because of the easier way they could hand over these cars and deliver the vehicles. Some of our dealers do distant-supply for other manufacturers, and they were struggling in a lot of instances to get those cars out.
QIs Toyota on a growth target for the continuation to the point where you get up to where Ford and Volkswagen volumes are, or is there a natural point where you’re at a good level without having to push into other channels?
Toyota is always looking to grow in the market, but to grow the right way. We don’t have any one particular brand, or manufacturer in our sights; we want to make sure we grow in a sustained way, into the right markets and we have a blended portfolio of markets and customers that we deal with.
It will be the amount of products that we’re bringing out, and getting people to experience them this year. Also, getting people to be aware of all our different products. That’s our biggest challenge, as both Toyota and Lexus brands.