Toyota Encourages Dealers to Add Service Bays

Washington DC May 22, 2007; The AIADA newsletter reported that Toyota is asking dealers to make big investments in service bays, even though some say their service areas are underused.

It's part of the company's growing pains as more Toyota vehicles in operation demand more service. "Some guys are having to triple the size of their service departments because it's 50 percent of what it should be," said Mark Johnson, a Seattle-based dealership mergers and acquisitions consultant.

"There is a lot of angst and pressure to spend money." Toyota usually renews franchises for six years, but one dealer told Automotive News he has been given a two-year renewal because he is out of compliance with service requirements.

Nancy Davies, vice president of retail market development at Toyota Motor Sales U.S.A., says the extra capacity is desperately needed because the number of Toyota vehicles on the road has risen dramatically. In the past five years, annual sales have grown from 1.5 million to 2.2 million. In that time Toyota added just 25 dealers.

The average U.S. Toyota dealer has 23 service bays. The company expects that to grow to 30 by 2012.