1 Nov 18

Toyota launches subscription model in Japan

After a similar service was launched by a major second-hand dealer in October, offering MINI subscriptions for JPY 80,000 (USD 710), Toyota has announced that, from January 2019 onwards, the public can subscribe to pick up a Toyota from any of the brand’s 5000 dealerships across the country.

Booking and payment need to be done on a mobile phone application and offers access to about 40,000 test cars, both Toyota and Lexus. Users can take a Prius as a weekly drive and a Lexus for the weekend, if they wish to.

New customer

The number of car sales has been decreasing gradually since the 90s of the previous century. Not only due to Japan’s ageing population, but also due to the fact that the younger population is less interested in registering an owned vehicle (which includes renting an expensive parking lot) and prefers a sharing model.

About 1.3 million people are today using some form of car sharing, the most popular supplier being “Times Car”, that allows the user to book a car for 15 minutes up to 48 hours. Times Car includes all services, even fuel, in the very short term rental offering.

Price and Service

Toyota has not yet specified the service scope, nor the pricing. However, the cost of the subscription model is expected to exceed that of the capital cost of an owned car, but would include insurance and maintenance (not fuel).

The subscription model will be called simply "Subscription" and it has been confirmed that the service will launch in Tokyo and will be rolled out across Japan, before being offered in other Asian countries.

Revamping the dealer model

Unlike the European or US dealer model, Toyota Japan sells cars through 4 different channel networks, “Toyota”, “Corolla”, “Toyotpet” and “Netz”. Each of the channels only sells a segment of the total Toyota offering.

Moving forward, Toyota has decided that each outlet will sell all models, easing customer access to the brand but also allowing the outlets to move into Mobility as a Service. Part of the simplification exercise is also the brand’s intention to reduce the number of models on the Japanese market to about 30, versus 60 today. The Lexus brand will be kept separate from Toyota.

Progressive dealers are embracing the new strategy and the additional service offering. Even if it sounds common to the EU/US customer, it was big news in Japan that a Toyopet Nagoya dealer has installed a small café facility offering hot drinks and snacks in the showroom. Japan is finally catching up with the Western car dealer standards.

Authored by: Yves Helven