【Text by Observers Network, Pan Yuchen; Editor by Gao Xin】According to a report by the "Nikkei", on November 17, Toyota will extend the sales cycle of its flagship model from 7 years to an average of 9 years, and maintain product value through software updates.

Different from the business model of integrating new features into new cars at once, software-defined vehicles will gain new features through software updates, which can provide better performance without requiring new hardware. This also marks a shift in the current industry's business model. However, Toyota's revenue model of maintaining vehicle value through software updates will still involve changes in functions and appearance for important models.

Toyota RAV4 Nikkei

However, for Toyota, the new length of the car cycle of 9 years is unprecedented. Initially, the full model change of the flagship model was carried out approximately every 5 years; with the improvement of automotive performance in the 21st century, the cycle gradually extended to 7 years, and the exact length varies depending on the model. For example, the RAV4 will undergo its first model change within about 7 years, and it will be released during the 2025 fiscal year (April 2025 - March 2026).

With the extension of the sales cycle, Toyota will also re-evaluate the wholesale prices set for dealers. Generally, after the release of a regular model, its price usually decreases over time. However, Toyota's wholesale prices will be more flexibly set based on the model and sales situation.

Currently, there are about 230 Toyota dealers in Japan alone, most of which are independently operated. However, some dealers have opposed the revision of wholesale prices, believing that it could put pressure on profits. In response, Toyota explained that the average wholesale price will remain unchanged for 9 years.

According to a report by the "Nikkei", Toyota is currently facing a large number of orders, leading to extended delivery times. For example, the Land Cruiser requires several years from order to delivery, and by the time the vehicle is delivered, the next iteration may already be completed. A longer sales cycle means that owners have more opportunities to purchase popular models and are less likely to depreciate.

It is worth noting that for models only available in China, Toyota will continue to maintain development efficiency to adapt to local market conditions. Among Japanese automakers, Honda often carries out complete model changes every 6-7 years, while Nissan sometimes almost every 10 years. As a comparison, Tesla carries out model changes approximately every 3-5 years, and Chinese automakers sometimes even do so annually.

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Original: https://www.toutiao.com/article/7573640903449969167/

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