Crowning Achievement: Crown Motors (皇冠汽車) and 50 years of Toyota in HK

November 18, 2019 York Lo Articles, General, Hong Kong Companies, Non-Hong Kong Companies, People, Transport

York Lo: Crowning Achievement: Crown Motors (皇冠汽車) and 50 years of Toyota in HK

Article about the opening of Crown Motors in 1966 with picture of one of its Toyotas (KSDN, 1966-12-21)

Earlier on the website we covered three auto dealers which primarily focused on British cars that are part of the Inchcape group – Metro, Dodwell and Gilman. The crown jewel of Inchcape’s auto distribution business in HK however is Crown Motors, which has been the exclusive distributor of the Japanese auto brand Toyota since its founding in 1966 over half a century ago. Thanks to the sales and marketing efforts of Crown Motors, Toyota has consistently captured over 25% of the HK overall market (if combined with Inchcape’s distribution of Mazda and Jaguar easily 40%) as the number one brand in the market and over 75% of the taxi market since the mid-1970s and other related brands it distributed such as Lexus, Hino and Daihatsu also have significant market share in its respective segments.

Toyota in Hong Kong Before Crown

Article about the introduction of Toyota Crown in HK by Continental Motors in 1964 (KSDN, 1964-12-16)

Ad for Toyota Crown by Continental Motors in January 1966. Noticed the Chinese name for Toyota. (WKYP, 1966-1-26)

Toyota Motor, the largest auto maker in the world, began as a division of Toyoda Automatic Loom Works in 1933, released its first car in 1936 and was incorporated as a separate company in 1937. The brand was introduced to the HK market before the founding of Crown Motors in 1966 as the obituary for Edward Eu of GM/Buick distributor China International Motors (see article) indicated that he was the sole agent in HK for Toyota at one point (also that of Saab and Subaru). In 1958, Toyota began exporting models such as Toyopet to the US and other overseas markets and a 1961 Far Eastern Economic Review article mentioned that Toyopet Tiara was introduced to the HK market in the autumn of 1960 by Fidelity Motors (發達汽車) in Kowloon, later known as the distributor of Mazda that was acquired by Inchcape in 1976. It stated that the Tiara was “the only Toyopet vehicle kept in stock in Hongkong” and had “an engine capacity of 1500cc and sold for about the same price as the Hillman Minx, which was more or less the same size”. In 1964, the article above mentioned that Continental Motors (大興汽車, incorporated in 1961, dissolved in 1985) as the exclusive distributor of Toyota in HK was introducing Toyota Crown to the market. As a firm, Continental Motors was incorporated in 1961 and dissolved in 1985 and according to a 1969 directory operated out of 79C Waterloo Road. A 1967 Far Eastern Economic Review article revealed that Continental’s distributorship of Toyota in HK was not a successful one as it only managed to sell 93 Toyotas in 1965 and sales dropped to 27 in 1966. It was perhaps due to this poor result that Toyota decided to turn the HK distributorship of its vehicles to Borneo Limited, the distributor of Austin in Malaya which had acquired the highly successful distributor of Austin in HK -Metro Cars in HK in early 1966 and entered the HK market earlier through the acquisition of Gibb Livingston in 1961.

Crown Motors (1966-1980s): From the B Team to the A Team

Article and picture of Crown Motors head Robert Young in 1971 about his 2 months trip to Japan and Europe (KSEN, 1971-6-27)

To distribute Toyota in HK, Borneo Ltd formed Crown Motors in October 1966, which likely took its name from Toyota’s popular luxury sedan Crown which was first introduced in 1955. The first Crown Motors showroom which opened in December 1966 as shown in above article was located at 24 Lan Fong Road in Causeway Bay and at the time Toyota was the sixth largest auto maker in the world based on sales, up from 13th two years before and gaining popularity in markets outside of Japan with its Toyota Corona model, which was launched in 1965 after significant redesign of its less successful Toyopet. The same year, Toyota bought Hino, the maker of buses and trucks.

To lead Crown Motors, Borneo Ltd hired Robert Anthony Young (楊聿彬), a newcomer to HK and Asia, as general manager of Crown. Born in 1930 in Grantham, Lincolnshire, Young served as sales manager for African Lakes Corporation in Malawi in southeastern Africa from 1955-1959 then branch manager for Automobile Palace in Banger, N. Wales from 1959-1963 before returning to Africa as sales manager for United Africa Corporation at Freetown, Sierra Leone from 1963-1966. According to recollections by Wilson Mok (莫裕生), who was a colleague of Young, when Crown Motors was first launched it primarily relied on the much bigger affiliate Metro Cars for many aspects of its business ranging from after sales service, repairs, accounting and licensing while Young and his team at Crown only handled sales. The market at the time was dominated by British and American brands and Metro as the leading distributor of British auto brands was selling 500 cars a month and hence getting most of the attention of the group while Crown was treated like the B team. In 1967, the Inchcape Group acquired Borneo Ltd and in the Singapore and Malaysia market decided to switch from Austin to Toyota, a decision that would prove to be the right one with the decline of the British auto industry and the rise of the Japanese auto industry in the 1970s. (Today Inchcape represents Toyota in 18 different countries.)

The parts manager of Crown Motors (right) and representative of 3M in 1972 with one of the 3000 new reflective license plates which Crown had just ordered from 3M. (KSEN, 1972-7-20)

Despite his lack of local market expertise and corporate support initially, Young and his small team of 25 employees at Crown managed to capture significant market share for Toyota in HK within a few years through innovative sales and marketing approaches. Before the rise of CRM software, Crown introduced an active custom contact recordkeeping program for leads and follow ups called “Prospecting for Customers” in 1967 and over time built up a large database of over 150,000 customers. Crown was also one of the first companies in HK to place huge emphasis on training, offering technical and sales training to its staff all the time with Betsy Lai as training manager.

In September 1972, Crown Motors opened its headquarters at 1063 King’s Road in Quarry Bay. The new 6-story building cost over HK$10 million to build and housed all departments within the firm ranging from sales, administrative, repairs to parts. The opening ceremony was attended by over 1000 guests including senior executives from Toyota’s head office such as a member of the founding Toyoda family. (KSDN, 1972-9-19)

In 1973, Crown brought Toyota into the taxi market in HK which was first dominated by Mercedes and Austin and then later dominated by Nissan (distributed by Dah Chong Hong’s Honest Motor). Toyota did not compete on price but rather product design – it was the only car with factory-fitted air conditioning for years and overall coverage – it offered guarantee on the rubber drive belt for camshaft and also auto financing through Inchroy Credit (英利信用財務), a joint venture formed between Inchcape and the Royal Bank of Canada in 1973, sold in 2007 and now part of OCBC. Within a few years, Toyota captured over 75% of the taxi market, a lead it maintains to this day.

In 1975, Crown Motors sold 2575 Toyotas in Hong Kong, which represented 30% of total auto sales in the HK market and within the first five months of 1976, it sold 1000 cars and 700 trucks, including 33 large Hino trucks, a big jump from the grand total of 3 for the entire year in 1975.

In May 1976, Crown Motors opened a new 30000 sq ft service center at 161 Ma Tau Wai Road in Kowloon with state-of-the-art repair and maintenance equipment. (TKP, 1976-5-28) By the time the firm celebrated its tenth anniversary in November 1976, it had 600 employees and 8 offices across Hong Kong. (KSEN, 1976-11-2)

Article about the appointment of sales chief Mike Rushworth joining the board of Crown Motors in 1984 (WKYP, 1984-5-3)

In 1981, Crown Motors became the first company in the HK motor trade to establish a market research department and subsequently installed a telemarketing department. Lots of effort was placed in after sales service and client retention including follow up surveys, telemarketing, reminder cards, golden service program and a free magazine for customers of three years’ standing. The firm also marketed heavily in TV, print and outdoor, and that year donated a Toyota Landcruiser to WWF for transportation of a panda in China. (TKP, 1981-1-3)

By 1984, Crown Motors had over 1000 employees, 200 of whom were in sales under Michael J.D. Rushworth (韋詩域), who was part of the original sales team in 1966, promoted to head of sales in 1971 and joined the board of Crown in 1984. Under Crown’s management, Toyota had a close to 40% of the market that year, a new record. Rushworth stayed at Crown until 1996 when he became the general manager of Jebsen Motors, the distributor of Renault, Volvos and Porsche in HK.

Crown Motors in the 1990s and beyond

Left: William Tsui, head of Crown Motors in the 1990s and 2000s; Right: two mascots of cleanliness with Toyota Crown taxi in 1995 to promote the Taxi Cleanliness Campaign.

In the 1990s, Bob Young and Mike Rushworth who had been responsible for the success of Crown since its inception had moved on and the leadership of the firm was passed to William Tsui Tsu-kai (崔志凱, 1942-2009) who joined in 1991. A native of Shandong, Tsui was the son of KMT diplomat and journalist Tsui Wan-chiu (崔萬秋, 1903-1992, an early friend of Jiang Qing, Madam Mao in Shanghai about whom he wrote a book about) and brother of Boston book publisher Jill Tsui Cheng (崔志潔) and operated Capital Oldsmobile in Sacramento, California. Under the leadership of Tsui, Crown maintained close to 30% market share in HK and won the Toyota Triple Crown Award for every consecutive years starting in 1991, the only company in the world to achieve this difficult feat. As Toyota introduced Lexus in 1989 and the hybrid Prius in 1997, these were added to Crown’s lineup.

In 1994, Crown Motors became the first car distributor in HK to receive the ISO 9001 certification after a 18 month certification process which involved consultants from Inchcape and 70 employees overseeing the process. At the time, the firm had 1300 employees across 26 divisions and 15-20% of its sales came from fleet customers such as the MTR. After Toyota became the majority shareholder of Daihatsu in 1998, Crown Motors also took over from Tai Fat Hong (founded in 1970, controlled by the family of Wu Hiu-chiu) as the sole distributor of Daihatsu in HK.

As Inchcape as a group became solely focused on autos globally in 1999, William Tsui became head of Inchcape in Asia Pacific. By 2003, Crown’s entire fleet of 18000 Toyota taxis in HK had switched to the more environmentally friendly liquid petroleum gas (LPG) and despite the SARS crisis that year which resulted in the lowest industry auto sales in two decades, Crown maintained 31% market share. By 2006, Crown’s market share in HK was 33.7% and the group was doing sales in HK of 224 million pounds with profits of 24 pounds that year. That year, Patrick S. Lee, a former P&G and Kerry Beverage executive joined as managing director of Crown. In the summer of 2007, Crown opened its first China based business with the opening of a Toyota retail center in Shaoxing in the greater Shanghai area. Sadly, Tsui passed away in February 2009 after 18 years with the group.

In 2017, Crown opened a 20000 sq ft Toyota/Lexus mega showroom in Kowloon Bay and announced its 25th consecutive Triple Crown award win.

Sources (other than what’s cited above):

Keitel, Mary “Toyota’s Penetration into the Taxi Market”, Hong Kong Management: Cases in Marketing, 1996, Chinese University Press

http://news.stheadline.com/dailynews/headline_news_detail_columnist.asp?id=187718&section_name=wtt&kw=16

https://prabook.com/web/robert_anthony.young/378480

https://www.inchcape.com.sg/about/our-heritage

https://www.scmp.com/article/73753/crown-motors-passes-iso-test-first-attempt

https://www.britannica.com/topic/Toyota-Motor-Corporation

http://orientaldaily.on.cc/archive/20040511/fea/fea_k3cnt.html

http://www.thestandard.com.hk/section-news.php?id=182030&story_id=47304438&con_type=1&d_str=20170421&sid=12

This article was first posted on 18th November 2019.