Toyota Mirai offers service lesson

The industry's race toward alternative powertrains raises a key question for dealers, far beyond the standard chicken-and-egg conundrum of fueling infrastructure: What's required of those who must service and repair the vehicles?

In the case of Toyota's ongoing experiment with the Mirai — for now, limited to portions of California and Hawaii — the answer is becoming clearer to nine local dealers who have agreed to sell the hydrogen fuel cell vehicles and service them in specially designed bays.

Those nine include Longo Toyota in the Los Angeles suburb of El Monte. Longo has invested nearly $1 million to sell, service and repair the 20 Mirais it delivers in an average month. That's a drop in the bucket compared with Longo's total sales. The dealership sold about 19,000 new and used vehicles in 2018, including 14,500 new Toyotas.

"It's been a good product for us," says Doug Eroh, the 45-year-old general manager of Longo, the top-selling Toyota dealership in the United States for 52 consecutive years.

Eroh, who drives a Mirai for his 74-mile daily round-trip commute, is a true believer, albeit a practical one. "The technology is great; it's as good as can be, as long as there's infrastructure available to fuel it. But we try to be very transparent up front — it might be the only car that we try to talk somebody out of if their routine drive is not near a refueling point."

Because of the unique properties of hydrogen (see Hindenburg, 1937), working on the Mirai involves extra safety precautions. Some of them require a dealership to modify a bay in the service area and collision shop for added safety. Modifications include a dedicated hydrogen bay with weighted pull-curtain walls and pressurized venting near the floor — hydrogen is heavier than air — that can safely vent any leaked hydrogen to the roof.

"It has its own ventilation system, so that if you needed to service the hydrogen tanks, you could exhaust the hydrogen gas out of the building in that bay," Eroh said. "There's an exhaust system on the roof that accomplishes that, but in three and a half years, we have not had to utilize that system a whole lot."

At January's National Automobile Dealers Association Show in San Francisco, Toyota Motor North America showed a newly built architect's model of its ideal 68,000-square-foot, nine-acre dealership. The model contained a hydrogen service bay.

Perhaps because of the Mirai itself or perhaps because of ToyotaCare — the program that covers basic maintenance on newly purchased Toyota vehicles — Eroh said a high percentage of Longo's Mirai customers have returned for regular service. But "the surprise has been on the collision side. We've seen a lot more of the cars through here than we expected."

Some specialized tooling is also required, Eroh said, and service technicians have to receive special training to work safely on the Mirai and its pressurized hydrogen fuel tank. Yet, the return on investment has materialized.

Last year, Toyota sold 1,700 Mirais in the United States, down 7.5 percent from 2017. But the Mirai also comes with other challenges — from the sales floor to the delivery truck.

One example: taking delivery.

"When the cars come off the truck, they have just a little bit of hydrogen in the tank," Eroh said. The dealership doesn't have a hydrogen fueling point, which means the Mirais have to be fueled before they can be sold. One hydrogen fueling station is 12 miles northwest in South Pasadena; another is 15 miles east, in Diamond Bar, Eroh said.

"It would be great if we had one closer," he said. "Local government doesn't always understand the technology" and has limited development of hydrogen fueling stations. Eroh said having to take the new Marais to one of the stations is "an extra step in the process."

He said that, because of Longo's long and close relationship with Toyota in Japan and its U.S. sales subsidiary, it "always wants to participate" in whatever the brand and the automaker are doing, so the question of whether to invest in Mirai was an easy one. The dealership's location in Southern California also helped.

"Being located in Los Angeles and in California, there's always been a higher acceptance among customers for alternative-fuel vehicles," Eroh said, adding that Longo has been the leading Prius dealership in the United States since 2010.

But to justify the modifications in Longo's service area and Toyota-certified collision center, the dealership needed to build Mirai sales. To do that, Longo created a showroom display. Eroh calls it "the Mirai wall," where shoppers can see how a fuel cell converts hydrogen to electricity and water.

Since Longo began selling the Mirai in October 2015, the dealership has sold about 750, including 235 in 2018. Most of the deals involve leases.

"There have not been a lot of [service] problems with the car, but we've had a fair amount of work on accidents with the Mirai. We always seem to have a couple in our pipeline at any given time," Eroh said.

"If we think about it in terms of return on investment, just the service infrastructure and related service equipment, it's probably 100 cars" before the dealership saw a return, he said. "We're comfortably past that point now, and that is allowing us to invest in marketing and training to sell and maintain the Mirais."

Longo has 20 sales consultants "trained and capable of selling this car."

The first Mirais that Longo sold are starting to come off lease, allowing Toyota and Longo to see how customers respond when it comes time to pick a new vehicle.

"We'd love to have them all come back, and we have already seen some people come back to get their second Mirai," Eroh said, adding that he'll be joining them. "My lease is up in June."