Toyota is changing the way they do business. Rather than just simply building and selling automobiles to the public, they are transitioning to become a mobility company. This was very much evident during the automaker’s display at the 2019 Tokyo Motor Show, which showcased more mobility solution concepts rather than upcoming models.
As a result of this shift, Toyota Motor Philippines (TMP) will be following this new brand philosophy as well. TMP will soon be reorganizing its business model in the country. Specifically, they want to shift from “car ownership” to “car usership”. Essentially, they will be offering long-term leases of vehicles as another option for customers rather than buying brand new models.
By doing leases, it will be easier for the public to gain access to vehicles. They no longer have to pay for the full price of a new vehicle, and can simply choose different long term leases that will suit their needs and budgets.
Offering long term leases on vehicles might be a new concept in the Philippines considering we’re more familiar with financing schemes. However, a business model based on leases has already been in place in other countries for quite some time.
One example would be in the US, where customers can lease a vehicle for 5 or even 10 years. Rather than coughing up a large down payment and then paying a monthly fee with interest, they only need to pay a monthly fee. That fee then depends on the vehicle they choose. Should they want something a bit fancier, then the monthly fee is higher, and vice versa.
At the moment, TMP has not specified when they will reorganize its business model to focus on leases rather than outright sales. However, it will likely be implemented at the start of the 2020 fiscal year.