Toyota is undergoing a massive generational shift. And, of course, it’s been planning for this for years.
The Japanese giant — known for crafting 100-year business plans — has enjoyed decades of success in the U.S. driven by baby boomers and rallied by a crew of longtime executives who are boomers themselves.
“Clearly the boomers have been the disposable income behind the automobile industry through my entire career,” Bob Carter, Toyota Motor North America’s executive vice president for sales, told me last week. “But now we’re entering a phase that in the second half of this decade, we’re going to see disposable income really be almost split in thirds between boomers, Gen X and Gen Y. So it’s a fantastic, fascinating time — and as an automotive company, we’ve got to prepare for that.”
Carter, a 39-year Toyota veteran, is losing his steady right-hand man, Bill Fay, 64, who is retiring after 38 years at the company. That led to a series of promotions for executives from Generation X — Jack Hollis, David Christ, Andrew Gilleland — and very little expected change in the relationship between Toyota’s U.S. sales operations and its dealers.
That’s the product of a deliberate strategy. This generational transition was pretty well in place five years ago, Carter said, before the company’s North American headquarters moved from Torrance, Calif., to Plano, Texas.
Rising executives are moved among Toyota and Lexus and other key roles — Hollis has been marketing chief, Christ worked at Toyota Financial Services — so that they are well-versed in the operations as well as with key business partners, especially dealers.
“There’s no magic: The more successful the dealers are, the more successful we are,” Carter said. “And they’ve proved time and time again that when they’re successful and they’re profitable, they organically keep investing back into the business, whether it be facilities or people.”
For his part, Carter said he isn’t close to retirement: “I’m only 61, and I got lots of gas in my tank.”
Usually Carter and the leadership team host Toyota-brand dealers for a product preview and celebration in Las Vegas each September. With COVID-19 still widespread through much of the country, the brand is having to take its annual event online, perhaps over a number of days, Carter said. Details are still being nailed down.
“In this pandemic environment, we just have to communicate in a little different fashion,” he said.
Communication, trust and earned confidence in each other provide the basis for Toyota’s strong dealer relations, highlighted by many years of Lexus and Toyota leading NADA’s Dealer Attitude Survey and the most-liked brands in the industry.
It’s that strong relationship and the company’s core culture that has allowed Toyota to bounce back after previous crises — be they natural (tsunami), economic (financial collapse) or self-inflicted (unintended acceleration).
“Granted, this pandemic is a different crisis than any of us have seen, but having a strong culture and a strong vision of who we are and how we fit into the market, I believe, positions us to not only weather the crisis, but to recover the quickest,” Carter said.