Toyota Aims Expansion In Canada

Anthony Fontanelle
September 18, 2007

Japanese automaker Toyota is on track to become the largest automaker in the world. This distinction is given to the automaker which produces the most number of vehicles in a year. With that tag comes the task of selling huge numbers of vehicles in the global auto market. In the United States auto market, Toyota has already overtaken Chrysler and has beaten Ford for the last two months. Before the end of the year, it is expected that Toyota will become the United States' second largest automaker.

In Canada though, the automaker is still to beat Ford or Chrysler. But Toyota has set out to do just that. As part of the company's expansion in the Canadian auto market, the company announced that they will be entering the Canadian car insurance market.

Toyota President Yoichi Tomihara said that "if everything goes well, we want to (offer insurance) within a year. If the hurdle is higher, we have to spend more time." The automaker is already offering vehicle insurance in other countries. In Japan, Britain, France, Germany, Australia, and Thailand, the automaker offers insurance policies to its consumers without having to involve independent insurance companies.

Mr. Tomihara said that they are studying the prospect properly. This should be the case since their insurance business should have the same quality standards as its vehicles. Toyota has been known for the reliability of its vehicles which can be compared to the durability of radiator Canada. This reliability of Toyota vehicles is considered as one of the keys to the automaker's success not only in Japan but also in the United States auto market.

Automakers usually have financial services arm. But Toyota will be the first automaker that will be entering the auto insurance market in the country. It is expected though that it will only offer insurance policies for consumers in Alberta, Ontario and Atlantic Canada. In these regions, the auto insurance market is in the hands of the private sector.

Offering insurance policies to consumers in a dealership is considered to be one of the ways to attract consumers. With Toyota though, the extent of its insurance operation is not yet known so experts are still in the dark as to what the effect of this move will be in the total operation of the automaker. The effect of this on the whole Canadian auto industry is also not yet known.

ReportBusiness.com reported that Mr. Ryan Lee, a professor in the department of risk management and insurance ay the University of Calgary's Haskayne School of Business, Toyota might enter the insurance market to help it sell more vehicles in Canada or to make more money.

The Japanese automaker recently announced that they are looking to sell a quarter of a million vehicles in Canada by the end of the decade. In the 1990s, both Ford and Chrysler have been able to attain that sales goal. But the current trends saw sales for the two American automaker dropping to just 230,000 vehicles each year. This year, the automaker is on track to sell 205,000 vehicles in Canada this year.

Source:  Amazines.com