Toyota Financial Services' beginnings date to 1983 with a loan for a used Corolla.
The company then began opening full-service branches to handle dealer and customer financial services. A local office would get so big, and a new branch would open.
Over time, there were 34 branches around the country.
But three years ago, the firm began looking at its setup, says George E. Borst, CEO and president of Toyota Financial and Lexus Financial Services, based in Torrance, CA.
It made sense to maintain branches to serve dealers' needs such as credit acquisitions, wholesale financing and insurance. It's important to keep in close contact with local dealers, he says.
But customer-related functions such as sales administration, collections and lease terminations could be done more efficiently through a few centralized offices, according to Borst.
Centralizing customer services made sense, centralizing dealer services didn't.
Says Borst, “Technology makes a lot of things more efficient, but the mistake others have made is forgetting that this is a very high relationship business as well.
“You can have the best rate, but unless you have a good relationship with the dealer, well, there are a lot of choices.”
So, Toyota Financial went with the best of both worlds.
It's keeping those 34 branch offices. They're renamed dealer sales and service offices. They'll exclusively serve dealers.
But the customer loan and lease aspects of the business will be handled by three centers that Toyota Financial is opening in the West, Midwest and Northeast.
The first of those centers just opened in Chandler, AZ, a Phoenix suburb. Toyota Financial occupies 100,000 sq.-ft. of leased office space there and employs about 365 people with an annual payroll of more than $10 million.
It will service about 632,000 loan and lease customers in the West. It expects annually to handle about 4.4 million incoming and outgoing phone calls as well as about 500,000 pieces of mail. Activities include basic account maintenance, account status inquiries, retail and lease payoff inquires and payment processing.
About $6.5 million is invested in its computer room alone. The center uses the latest high-tech equipment. For instance, it's equipped with automatic predictive phone dialers to speed up collection calls. The next phone number comes up, a button is hit and the number automatically dialed.
“It's expensive technology to do at 34 branch locations, but not at three centers,” says Borst.
The other centers will open this year in suburban Baltimore and Cedar Rapids, IW where Toyota Financial already has its customer insurance center.
The centralization aims to increase service and lower costs at the same time. “This is a very competitive business, and we need to make sure to get our costs in line,” says Borst at the first center's grand opening.
Toyota Financial put metro Phoenix on a short list of cities as prospects for the Western service center.
“Why Phoenix? It was a good value but not the cheapest location,” says Borst. “The education of the workforce was high, the housing was affordable and the area had a lot of vitality.”
Two hundred employees of various branch offices relocated to the new center, with Toyota Financial picking up the relocation costs.
“When we had a job fair to recruit for the remaining positions, we had over 1,000 applicants,” says Geri Brewster, Toyota Financial's human resources vice president.
Meanwhile, the company quickly endeared itself to the local community by donating $25,000 and a new Sienna minivan to The San Marcos Family Resource Center. It provides medical, educational and social services to low-income families in Chandler.
Toyota Financial is the third largest captive finance company and seventh largest finance company in the country. Its assets total $34 billion.
From April to November, its contract numbers were up 130,000, a 29% increase.
It set a record by financing 79,000 new and used vehicles and selling 53,000 insurance products in November, says David E. Pelliccioni, vice president of sales, marketing and operations.
“It's a great time to be vice president of sales in this company,” says Pelliccioni.