Toyota Motor Thailand vice president Sitachai Jeeratunyasakul, who oversees nationwide sales of Toyota vehicles and has recently been appointed to another role as head of the Lexus Division, unveils his plans and focus for the leading Japanese luxury-car band in Thailand to The Nation's Pichaya Changsorn.
The newly appointed head of Toyota's luxury Lexus Division in Thailand, Sitachai Jeeratunyasakul, is a man who is confident in the quality of his product. But he has problems with taxes and prices, and wishes the government would rethink the level of import tariffs on luxury cars driven by hybrid power. All things being equal, he believes Lexus could drive away with half of parent company Toyota's market share in Thailand. But then, there is a need to perfect a different style of marketing.
How much importance has Toyota given to promoting its Lexus cars in the Thai market?
Very much. Because we think there is market potential. In Thailand, there might be some obstacles concerning prices and taxation, which have made the prices of Lexus vehicles slightly higher than their competitors, but our quality is second to none.
Thank to the Japan-Thailand Economic Partnership Agreement, import tariffs on Lexus and other vehicles imported from Japan have been brought down from 80 per cent to 65 per cent this year, and will reaching a final rate of 60 per cent next year. This applies only to cars with engines larger than 3,000cc and the prices will still be more expensive than those for vehicles assembled locally from completely-knocked-down kits.
The government should help by reconsidering whether it can extend tax cuts on hybrid cars with engines larger than 3,000cc.
How is the market situation?
The overall passenger-car market has dropped 18 per cent so far this year. The premium segment has fallen 6 per cent, but we've grown 6 per cent, because we have added to our line-up and improved the efficiency of our dealers.
Some customers feel dissatisfied because they have found their Lexus cars are serviced with Toyota spare parts, which are still in Toyota-brand packages. But they are charged more for the service. How does Lexus differentiate itself from Toyota?
That may be the case for old models. The changes will come gradually as we have introduced model changes. But with regard to branding, there is a clear distinction between Toyota and Lexus.
Except for me, the team that oversees Lexus is separate from Toyota. The dealers are also different; likewise the marketing activities. The separation is needed because Toyota vehicles are for the mass market, while Lexus are for the premium market. Therefore the people behind the two brands must think differently. We choose people who have a positive attitude, are trendy and open-minded and have dreams and activities that match the lifestyles of rich people.
Lexus staff will focus on "personalised relationship building" and one-to-one service provision. They have to find ways of approaching each customer. For Lexus, the relationship can't be built on a mass marketing approach.
Sunchai Trichit (General Manager of Toyota's Lexus Division, who was sitting in on the interview): We have been concentrating on proactive marketing and focusing on a specific target group of consumers. For instance, we have organised test drives at housing estates where "super rich" people live. We have mostly conducted a kind of direct marketing; a "push" rather than "pull" style of marketing. It' rather difficult to produce advertisements to "pull" this group of customers to buy the products]. We also hold activities at golf courses and stage co-events with leading brands such as luxury watches.
Lexus customers are typically not the kind of expressive person who wears thick gold necklaces or big diamond rings. Rather, they are the ones who may wear short trousers, an Audemars Piguet watch - a more contemporary-type guy.
Sitachai: The approaches to customers might be different. For Toyota, you may introduce a marketing campaign to "pull" customers into showrooms and close sales. With "push" marketing, you approach customers one by one, in realisation that each customer will have a different lifestyle.
To do one-to-one marketing, you must find a precise target - say CEOs of leading companies. You need to have a customer database and know their life styles, and set strategies of how to approach them, and send people to meet them. Or we go to where these targeted customers are, such as jewellery fairs.
Actually, nowadays, even in the mass market, competition is fierce and you can't depend solely on "push" tactics. For instance, if you want to sell pickups to teachers, you have to know their incomes and who can afford a pickup; the names of every teacher in the province - you can't cast a net over everyone.
What will your major focuses be?
The market for Lexus must be expanded and the efficiency of dealers improved. I will also focus on ending the concentration of Lexus sales in Bangkok alone. Now we have dealers only in Bangkok, which means most upcountry customers have to come to Bangkok for service] or rely on the channels of Toyota.
We have initiated Lexus "authorised service corners" inside Toyota showrooms at 10 locations in five provinces outside Bangkok: Khon Kaen, Ubon Ratchathani, Phuket, Surat Thani and Chiang Mai.
It's my duty to increase sales and our market share from the present 4 per cent. Toyota now has a 40-per-cent share of the market. Hence, if everything is ready and we have complete line-ups, it is possible for Lexus to achieve half of Toyota's market share, or 20 per cent. There are many factors that are vital for success, including the dealers and the prices, but we think that in terms of products, we are competitive.
Lexus is likely to expand its market to cover more of the small and medium-sized segments which have contributed a majority of BMW an Mercedes-Benz sales - the segments with cars priced from Bt2 million to Bt3 million. This can be accomplished in the medium term.
Can you elaborate on "improving the efficiency of dealers"?
Efficiency in managing everything, like sales, facilities, after-sales, improving customer satisfaction, services and selling more. Or we may have to increase our product variety.
Our surveys show most customers feel we provide better service quality. Prices are not an obstacle for "super rich" customers. There is good awareness of our image as a premium brand, although some Thai consumers may still be stuck with some "old images" of Lexus' competitors. It will take time for us to conduct public relations or educate customers for them to know more about the quality and technologies of our vehicles.
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