#scion

Despite struggling with a recall scandal early this year, Toyota has held on for a 10 percent sales increase in the first half of 2010. Of course, that achievement had a cost, namely a huge first-half binge on incentives. Now that Toyota is dialing back the spiffs, its sales are becoming downright flaccid, expanding only 7 percent in a June that saw 11 percent market growth. That means Toyota is slowly falling behind, now that it no longer has either an untouchable reputation or record incentives. Old standbys like the Camry and Corolla may have increased, but only to the tune of single digit growth. Meanwhile, Lexus, Scion and Toyota cars performed worse than June of 2009, leaving trucks to bring Lexus and Toyota sales up into the low double digits. Toyota’s hybrids sold 14,639 units, despite a decline in Prius sales, which still make up the bulk of Toyota’s hybrid sales. Toyota has not published fleet or retail numbers. Full volume numbers after the jump.

Nothing is worse than turning into something you’re not. I am not my father, and yet here I am besmirching his Curbside Classic series with this mystifying find. This Mk1 Scion xB is emphatically not a HUMMER, and yet… well, just look at it.

Agressive cost-cutting and improved sales yielded $1.68b in net profit for Toyota in the three months ending December 31, reports a press release in the WSJ. Sales revenue climbed 10 percent to $58.2b in the October-December quarter, boosting operating profit to about $2b. This quarter alone though, Toyota reckons the recall could cost the company $2b in repair costs and lost sales. For the fiscal year, ending on March 31, Toyota says the final impact should be limited to about $900m in losses on an operating basis, and has revised its fiscal year net profit projection to about $900m (compared to a $2.2b loss projected in November).

Oh how quickly things change! Just weeks ago, if you’d asked the average well-informed consumer what Toyota needed to change with its strategy, you’d have been treated to a treatise on how Toyota’s quest for quality and mass-market appeal had reduced its brand to signifying snooze-inducing appliances. Indeed, Toyota’s new CEO has emphasized enthusiasm as an area for improvement, waxing eloquent about the “splendid flavor” of the sporty vehicles Toyota doesn’t offer. Accordingly, Toyota is launching a sporting sub-brand àlá BMW’s “M” or Volkswagen’s new “R” line of high-performance vehicles according to Inside Line. Thanks to Toyota’s descent into recall hell however, boosting the brand’s sporty credentials is suddenly of highly debatable utility.

Big changes were afoot in the Scion back in the summer of 2007, as the brand’s pioneering crop of Yaris-based funkmobiles gave way to a second generation of models aimed at expanding the brand’s appeal to American consumers. Oddly enough, the biggest changes came for a new model with an unchanged name: in a single generation, the the tiny xB went from freaky, fuel-sipping urban runabout to a bloated, Camry-based beast. In contrast, the less-successful xA underwent a far less radical change as it morphed into the xD, saving it from the initial scorn of Scion purists and keeping the brand’s Yaris-based roots alive. Not that the xD has been in any way rewarded for staying (relatively) faithful to its brand’s mission: like the xA it replaced, the xD has never sold better than its larger, less brand-faithful stablemates. Which begs the question: is the xD a bad car, or was the original vision of a funky, urban micro-car brand a dead-end dream?

Toyota’s head start on hybrid technology is easily the most significant advantage any one automaker holds over any other. It’s next closest competitor in hybrid offerings is Honda which is facing serious challenges as its Prius competitor, the Insight, is off to an incredibly weak start. To capitalize on this advantage, Toyota plans to up annual production of its hybrids to one million units by 2011. Despite reports that Toyota is refocusing on hydrogen fuel cell vehicles as a long-term option, Yoshihiko Tabei, chief analyst at Kazaka Securities believes:

For the foreseeable future, the focus of Toyota’s (low-emission car) strategy will be on hybrids, not electric or fuel-cell cars. Except for Honda, Toyota is facing little competition in hybrids and is set to put distance between itself and other automakers

“Scion is pretty much a North American brand, so that is why it is very natural to think more development, more design work, should be done in North America,” Yoshi Inaba, president of Toyota Motor North America tells Automotive News [sub]. In other words, fans of Scion’s first generation of JDM confections who railed against second-gen bloat are probably out of luck. Sure, model four in the Scion lineup will be the iQ minicar, which is small and weird enough to have been a member of the Scion invasion team, but after that? It’s all bloat and bigger blind spots from here on out. It’s what America wants.

The Scion xD is known in Europe as the “Urban Cruiser,” and with an AWD option it’s sold as a quasi-SUV. According to a Euro NCAP crash test of comact cars though, the Urban Cruiser offers a lot less safety than you might expect in an SUV. NCAP’s latest round of compact testing saw vehicles from the new Opel Astra and Chevy Cruze to the Peugeot 308 and Mazda3 recording perfect five-star scores, indicating just how safe compact cars have become. And even the video of the Urban Cruiser’s three-star performance lacks the drama of earlier compact crash tests: a failure of side airbags and a weak performance in the new side pole crash caused the poor score. Most embarrassing of all, the Chevrolet Spark (neé Daewoo Matiz Creative) came in second to last, scoring four stars to the Urban Cruiser’s three.