Toyota explores long-term leasing business model

MANILA: Toyota is making major changes to their business model. In addition to manufacturing and selling automobiles, the Japanese automaker is making way for mobility solution products.  Toyota gave hints about the transition at the recent 2019 Tokyo Motor Show where they showcased a number of mobility solution concepts instead of upcoming models.

The shift is expected to affect to influence the company’s chapters worldwide, including Toyota Motor Philippines (TMP). According to reports, TMP will soon be following this business model and brand philosophy.

They mentioned that they intend to shift from “car ownership” to “car usership.” This means that the company will be concentrating on offering long-term leases on vehicles instead of just selling brand new models.

This method is believed to allow the public to have better access to vehicles. Since they no longer need to pay for the full price of a new vehicle, they can instead select long-term leases suited to their needs and budgets.

The concept of long-term leases on vehicles is relatively new to the Philippines. Financing schemes are the most common here in the country. However, this isn’t a completely new concept as lease-based business models are known to be quite common in other countries for a while now. The most common is in the United States.

Instead of instantly shelling out a large down payment and paying monthly fees (plus interest), customers will only need to pay a monthly fee. Customers in the US can lease a vehicle for up to five and even up to ten years. Of course,

the fee still depends on the make and model of the chosen vehicle. Monthly fees for more top-of-the-line vehicles still tend to be more expensive. Likewise, low-end vehicles will be more affordable.

At this time of reporting, TMP has not yet revealed anything specific on how or when they will be enacting the new changes. So far, industry insiders are speculating that the new business model will most likely be implemented at the beginning of the 2020 fiscal year.

Keep checking in with us to stay updated.

Also read: Toyota shows off hydrogen-powered Mirai at Greenbelt, Makati