An Eye Towards the Present & Future
Toyota Australia, a wholly-owned subsidiary of Toyota Motor Corporation has been the Australian market leader in terms of vehicle sales in Australia for fifteen years in succession. The company presently holds the most significant market share of the new car market in a highly crowded and competitive market.
Recently, Toyota Australia announced the appointment of Matthew Callachor as its new President and CEO.
He inherits the mantle of an Australian company experiencing its most robust sales for a decade particularly for its iconic brands, HiLux, RAV4 and Kluger.
The RAV4 enjoyed its highest sales for January and February combined in nearly a quarter of a century.
And the records keep falling ………….
In this forward-looking interview, with Toyota’s new chief, we discuss a range of issues facing Toyota – a market of rapidly changing tastes and preferences, sustaining a winning sales formula, the exorable trend towards low /zero emissions vehicles and newly-emerging sales channels.
Considered a seasoned veteran of the fast-changing global automotive scene, Matthew Callachor was recently appointed the President and CEO of Toyota Australia – a zeitgeist of a 36-year career with Toyota. Now 56-years old and at the pinnacle of his career, which includes high-level appointments to the United States and Japan, his entry into the Toyota family over three decades was hardly a dead certainty. During the recession of 1982, Mr Callachor graduated with a Bachelor of Business majoring in marketing. “After university, I originally didn’t think to join a large corporation but this opportunity came my way, and I applied for a position advertised in the papers with a local operation called Test Toyota – a commercial vehicle distributor in Australia. I arrived in my modest car and, and as luck would have it, I tore a tyre riding over a rough section of gutter overgrown by grass immediately in front of the building where the interview was taking place.” The first interview impressed the interviewers enough to propel Matthew to a shortlist. Matthew became aware of possibly more suited people than him for the role but much to his surprise, he won the role against the odds. “There was a valuable lesson to be learnt by that process,” dryly remarks Matthew. “At my first interview, the interviewers witnessed me changing a tyre from their window view and the fact that a university student knew how to change a tyre earned my right to work at an automotive company!”
His early maturity, assured self-confidence, talent and flair for the job led to rapid advancement through the Toyota hierarchy starting from his home state of Queensland. From junior marketing assistant, he rose to the position of regional sales manager, and then to general management roles for national sales and then national marketing itself. A stellar international career followed Mr Callachor over the next few decades which give him a unique perspective on how to run a global group with its eye on regional needs and demands. Commenting on his 36-years with one company, Mr Callachor said, I’ve had the privilege of working in so many places at Toyota both here and abroad, and I feel humbled to be given the opportunity to run the company.”
The position of President and CEO of Toyota Australia followed an 18-month period as its Vice-President overseeing sales, marketing, product planning, corporate services and finance divisions. Toyota Australia is uniquely positioned of being the number one market leader since 2003 and Mr Collachor inherits the mantle of the job of a company in top flight. The obvious question is the secret formula for Toyota’s winning streak. “The paramount thing is creating the product that people want. Toyota has such a great variety of products which suit every need and lifestyle or work situation – that’s the starting point. One of my strengths is not seeing a people as customers but as customer/guests – treating people like guests who visit your home.” Mr Callachor is very familiar with the uniquely Japanese concept of cultural etiquette where loyalty, politeness, personal responsibility and respect is ingrained into the Japanese psyche. In 2014 and for three years, he was the first Australian executive to head a Lexus division in Japan acting in the senior role of General Manager of Global Lexus Planning. This role coupled with other roles gave Mr Callachor rare insight into the root cultural concept and application of “omotenashi” or “hospitality, treatment, reception, service.”
In Australia, Mr Callachor remarks that the guest experience is “what we are committed to,” that we seek to “cut out anything that stands in the way of anything less than complete satisfaction.” Toyota’s famous tagline “Oh, What a Feeling!” originated out of the US and the person jumping in Toyota’s commercials represents in what Mr Callochor says being the “physical manifestation of that sense of satisfaction in owning a Toyota.”
The third aspect of Toyota’s ‘winning formula’ is brand penetration which permeates the broader Australian mass market. The best known of Toyota’s series of sponsorships is the three-year sponsorship agreement (2016 – 2019) with the Australian Football League which is one of the biggest sponsorship deals in Australian sport – an enduring relationship of 16 years. Says Mr Callachor, “The ‘Oh, What a Feeling!’ is possibly the most recognised tagline in Australia. That sense of satisfaction where Australians are going to experience nothing less than quality, dependability, reliability and overall excellent customer purchasing experience.”
With so much consumer products now available for purchase online, we discuss the prospects of online vehicle sales via a dedicated Toyota portal versus the traditional dealership. “That’s true; online purchases are now a part of everybody experience for most people. However, a vehicle purchase is the second most expensive purchase that one tends to make. So what we find is that people do a lot of their information gathering online but will visit a local dealership for the final point of the customer purchase journey. Online purchases are likely to make up a small proportion of total sales only.” Mr Callachor believes that people need a lifetime of customer service for peace of mind and familiarity. “There will always be an emotional element embedded in the purchase of an SUV or a family sedan. The five senses are fully engaged in the purchase decision.” Shopping centre car displays as a subset of the dealership are an increasing part of Toyota’s marketing strategy. “We are experimenting with several shopping centres and find the single biggest factor that works in our favour is the virtue of convenience. People enter our car display with no immediate intention to buy but to satisfy their curiosity ahead of doing some other activity like going to the movies. All these things, in their way, form a useful part of the customer purchase journey.”
An increasing number of Australians are drawn to new technologies. In a 2017 survey released by Roy Morgan Research on the state of the automotive industry several telling points are revealed. The first key point is that a majority of Australians (62%) would pay more for a car with “zero emissions” compared to 38% who wouldn’t. When viewed through the eyes of different generations, 75% of Millennials would be prepared to pay more for such technology compared to 51% of Boomers. Toyota has been at the forefront of new technologies for generations, and more emission-friendly vehicles will rapidly become the more prominent part of the sales mix into the future. Twenty years ago, Toyota heralded the launch of the hugely popular all-electric Prius model and in 2014, launched the first-ever mass-produced fuel cell sedan, the Mirai.
This emerging trend is tempered by the needs of the rural sector. “Our rugged Land Cruiser 70 Series, which is heavily used in the mining industries is perfect for the job it is designed to do. An electric vehicle would not be a suitable replacement for it in those circumstances,” says Mr Callachor. Toyota Motor Corporation (TMC) announced in December last year of a new target for electrified vehicles to account for more than 50% of its new-vehicle sales around 2025. Its plans accelerate the development and launch of electrified vehicles including hybrids, electric battery models and fuel-cell electric vehicles. By this period, TMC would cease developing vehicles without an electrified version. By early 2020s, Toyota will have more than ten battery electric models on the global market starting with China and then to Japan, India, US and Europe. Toyota Australia is one of the original founding members of the Hydrogen Council. “We’ve had three Mirai’s in Australia on trial with impressive results,” says Mr Callachor. “Mirai is a hydrogen fuel cell vehicle whose only emission is water. However, deployment of new infrastructure such as hydrogen refuelling stations is a challenge.” For environmentally conscious Australians today, the practical and readily available choice is hybrid technology. “We intend to expand our range of hybrid models across a few vehicle lines,” says Mr Callachor. “My wife enjoys driving a hybrid. Apart from the savings on fuel cost and environmentally friendly ride, the power torque on our hybrid model is enormous. For a busy person, refuelling every second week is a real time-saver.”
A graduate with a Bachelor of Business majoring in Marketing
Begins a career with Toyota Australia in 1982 as a marketing analyst
The rapid rise to national prominence as general manager for sales and then for marketing
In 2014, Mr Callachor became the first Australian to head a Lexus Division in Japan, a position he held for three years.
Two years with Toyota Motor Sales USA
In 2010, Mr Callachor promoted to Executive Director, Sales and Marketing.
18-month tenure as Toyota Australia Vice-President
At the beginning of 2018, promoted to President and CEO Toyota Australia.
Mr Callachor is married with two children.
As of September 2017, Toyota Australia offers an extensive range of motor vehicles in Australia for private and fleet buyers.
Toyota Camry (mid-size car)
Toyota Corolla (compact car)
Toyota Prius (compact car)
Toyota Tarago (minivan)
Toyota Prius v (minivan)
Toyota Prius c (subcompact car)
Toyota Yaris (subcompact car)
Toyota 86 (sports car)
Toyota Fortuner (mid-size SUV)
Toyota Kluger (mid-size SUV)
Toyota Land Cruiser 200 (full-size SUV)
Toyota Land Cruiser Prado (mid-size SUV)
Toyota RAV4 (compact SUV)
Toyota Land Cruiser 78
(Source: Toyota Australia website)
Best Selling Cars for 2017
- Toyota HiLux 47,093
- Ford Ranger 42,728
- Toyota Corolla 37,353
- Mazda3 32,690
- Hyundai i30 28,780
- Mazda CX-5 25,831
- Hyundai Tucson 23,828
- Holden Commodore 23,676
- Toyota Camry 23,620
- Mitsubishi Triton 23,605
Best Selling Brands in 2017
- Toyota 216,566
- Mazda 116,349
- Hyundai 97,013
- Holden 90,306
- Mitsubishi 80,654
- Ford 78,161
- Volkswagen 58,004
- Nissan 56,594
- Kia 54,737
- Subaru 52,511
(Source: Federal Chamber of Automotive Industries)
Number 1 Ranking Held Since 2003
Year Units sold National Sales Ranking.
2003 186,370 No. 1
2004 201,737 No. 1
2005 202,817 No. 1
2006 213,847 No. 1
2007 Not Available
2008 Not Available
2009 200,991 No. 1
2010 214,718 No. 1
2011 181,624 No. 1
2012 218,176 No. 1
2013 214,630 No. 1
2014 203,501 No. 1
2015 206,236 No. 1
2016 209,610 No. 1
2017 216,566 No. 1