Toyota Set to Sell Canadians Car Insurance
Toyota is expanding its car insurance business into the world's second largest country (by area). “If everything goes well, we want to [offer policies] within a year,” Toyota Canada's president and CEO told ReportonBusiness. The automaker already sells auto insurance in Asia, Europe and Australia. University of Calgary prof Ryan Lee is good with the expansion. Ish. “Having the ability to sell insurance through an existing dealership network would give an auto maker a major advantage at the outset; however it is not clear to what extent such a move would shake up the market.” Toyota has also set its sights on the retail banking industry. ToMoCo has a bank in Poland and recently opened ZAO Toyota Bank in Moscow. In the U.S., Toyota Financial Services offers everything from mortgages to savings accounts from its offices in Henderson, NV. The juggernaut rolls on.
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I don't see the branding problem, per se. As noted above, Toyota has had its fingers in a lot of pies for quite some time, and you already automakers involved in financial services, such as GMAC and Toyota Motor Credit. Hasn't been a problem for any of them so far. Still, I question this move, if only because of the nature of the insurance business, particularly in North America. Insurance companies generate profits by lowballing costs, denying claims and stalling out payments, all of which are not exactly the best ways to build goodwill. It would be stupid to lose a $25,000 Camry sale just because you pissed someone off over an $600 auto insurance policy..
It sounds to me like it might provide Toyota with an incentive to design safer automobiles in order to reduce the costs of claims paid out. It might also influence their design in making their products easier and cheaper to repair. Maybe they'll even start building cars with bumpers that can take a low-speed bump from another car without resulting in thousands of dollars in damage.
It'll be fun to see whether an owner of a 5-year-old Camry gets railroaded into accepting a cheaper, non-Toyota aftermarket fender by his 'honorable' Toyota Insurance claims adjuster... Or said Camry owner gets steered to an 'approved' repair shop that just happens not to be a Toyota dealer, but by some strange co-incidence the shop agreed to discount the published labor times by 10%... Yup... should be fun. Our provincial government's insurance regulator is notoriously weak in Ontario. Sludge was small potatoes.