Toyota Tundra rocks Western Canada

Now that they both have big pickup trucks on the market, Toyota Canada Inc. and Honda Canada Inc. intend to open new dealerships in Western Canada, senior executives of both companies say.

Without full-size pickup trucks to sell until recently, both companies have felt shut out of farming communities and other rural territories where such vehicles are considered an essential tool of working and living.

With full-size pickups accounting for up to two-thirds of all vehicle sales in some areas of British Columbia, Alberta, Saskatchewan and Manitoba, there was little sense for Toyota to set up shop offering only its 2006 Tundra to truck buyers, even if it was almost as large as a Detroit-designed truck, said Stephen Beatty, managing director.

In a logging or farming community or even in an oilsands boomtown flush with cash, Toyota’s popular small urban cars and luxury vehicles would probably not sell well enough to carry a dealership.

But the arrival of the full-size 2007 Tundra changes that calculus, Beatty said in an interview in Windsor. “That opens up opportunities in areas of the country that were formerly closed to us.

“Until now, if you didn’t have a fullsize pickup truck . . . in some areas of the country you wouldn’t bother trying to sell vehicles there,” Beatty said. Virtually all of those regions are west of the Ontario border.

Most North American critics agree the new V-8 powered Toyota Tundra is every bit the match of the trucks turned out by Detroit, and better in some respects.

It looks and sounds like an American truck, and handles better than some of them. It’s also built in a new Toyota factory in Texas, self-appointed home of the pickup.

Toyota has 260 dealers in Canada, a fraction of the size of the dealer networks built up by the Detroit companies.

Ford has 800 dealers, GM 758, Chrysler 457.

Ford and GM have been reducing their dealer body. Chrysler, which has been enjoying rising market share in Canada despite its sales woes in the U.S., has been increasing their dealer body, also in Western Canada.

Toyota has consciously kept the number of its dealers in check to drive more vehicle sales per store. Higher “throughput” raises profi tability and reduces a dealer’s reliance on after-sales service to make enough to cover operational costs.

Toyota dealers sold an average of 779 vehicles per store in 2006, the highest in the Canadian industry, according to Des- Rosiers Automotive Consultants.

Honda had the second-highest throughput at 681 per store, followed by GM’s 552, BMW’s 513, Mazda’s 503, Ford’s 500 sales per store, and the Chrysler Group’s sales of 483 units per store.

Toyota’s cap on dealerships will be raised during the next few years, Beatty said, although he would not speculate on how many new stores would be added, or when. Honda Canada is looking at taking exactly the same step this year, for the same reason — its new pickup truck — and probably in some of the same communities.

“Now that we have the Ridgeline we’re looking at going into more of those markets,” said Jim Miller, executive vice-president of Honda Canada, who was also in Windsor speaking at the university.

Honda’s new Western Canadian dealers probably won’t be just automotive dealerships, however. As the world’s largest producer of engines, Honda is also a world leader in power landscaping equipment, generators, pumps and small off-road vehicles.

(Windsor Star)