Published in Automotive

Toyota Motor Europe: Challenges and the Customer Experience

At the recent Frankfurt Motor Show I had a chance to sit down with Karl Schlicht, EVP Toyota Motor Europe – Sales & Marketing, Product Management and After Sales for both Toyota and Lexus.  He had just finished launching the new Prius to a packed Toyota booth numbering about 1,000 people. 

It’s no small wonder that Karl has risen to the top of the Toyota organization. He’s an amazing guy. Editorial integrity requires that I declare potential conflicts. Karl was my boss when I was at Toyota so perhaps I’m a little biased. He was the kind of leader that I, and everybody who  worked for him, would go over the top for.  Now he’s exhibiting the same leadership aptitude as when I worked for him. The difference? He’s now doing it on a world stage. 

Here’s a few excerpts from our conversation.

What are the biggest challenges facing European car makers in the next 12 months?

Two factors. We’re faced with a two speed Europe. Western Europe is growing again but from low levels but the Russian market, which is a big portion of our business and is a very big market out of our total Europe business, is down 35%.  The question is when will that recover? Our forecasters are telling us it will take most of 2016 to recover or at least to track back up. We don’t see that Eastern situation clearing very quickly. In the West we see some small growth and we see an 18.5 million market growing maybe 1 or 2 percentage points.  That’s the best case we can see at this point.

How are Toyota and Lexus attempting to deliver a better CX in Europe?

We are looking at the whole customer sales and service process. We are trying to integrate the two and, of course, digitalize the process to make it a more meaningful experience for the customer. We want to integrate the touch points and also the home experience, the walk in experience, and the showroom experience. It sounds simple to summarize it like that but it’s very complex because we have so many dealers running different systems, we have our own IT solutions to be upgraded, and behind all that should be a logical customized-to-Toyota unique best customer sales process and we’re trying to do that. We’ve created a group called Consumer One and we’re working our way through that with IT, with aftersales, with sales functions, and it’s probably one of the biggest cross-functional projects we have going right now.

Kaizen is an integral part of Toyota.  Do you apply Kaizen principles to improving the CX?

We do, but I would say in Japan where Kaizen was born and the Japanese do a better job than we’ve done so far so maybe we need to go back to Kaizen sometimes.  What I mean by that is that we are more of a stop / start on Kaizen rather than an integral part of the process. There’s a risk of falling off of kaizen and then re-activating it whereas in Japan it’s continual, it’s automatic, and it’s in people’s mind and processes so we can probably further improve. But currently, we are doing that in the whole process I just described where we are going through it rigorously to prepare for a new selling process. So I can say we’re doing it, but not enough.

Kaizen on the world stage

You’ve worked all over the world, what do you see are the biggest differences in customer expectations in different markets around the world?

I would say the whole customer delivery expectation is different but merging. For example, in the US you expect to buy a car off a dealer’s lot. In Europe, you’re willing to wait. You’re not expecting to buy that car the same day. That is different when I travel around the world, especially in Europe vs. North America. But I would say expectations are changing because of the internet age and the smartphone so things are starting to merge. When you get a package in your home from Amazon in one or two days whether you’re in Europe or the US, younger customers are now expecting the same experience so maybe older customers are used to different experiences but younger customers want everything immediately and delivered, so I think we have to change.

Until next time.

@christravell