By on December 18, 2009

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Today’s Supra CC is a humbling reminder that Toyota has stumbled before. With all the hoopla about Chrysler’s sales being down 38% this year, its easy to overlook that Scion’s sales are crashing, down 51% this year, and a whopping 66% since its peak in 2006. That year, Scion moved 173k of its youth-oriented cool-mobiles,even if most of them went to the target buyers’ parents. This year, Scion will be lucky to sell even 57k units. Time to prune the family tree?

It’s not exactly a new issue here at TTAC: we’ve editorialized about the intrinsic limitations and pitfalls of Scion’s youth-oriented marketing repeatedly, starting back in 2004. And we haven’t exactly helped either: my review of the current xB was a bit of a shot heard around the internet world. Now the chickens are coming home to roost, but Toyota is still acting oblivious.

In a freep piece, Scion Vice President Jack Hollis speaks but does not hear (or read sales stats):

“My goal is to expand,” Hollis said. “There’s no way to say if it will be four, five or six models. We’ve got to figure out what’s the next type of buyer we want to reach and develop vehicles for them.

“We have the youngest customers in the industry.”Scion’s not about sales totals,” Hollis said. “It’s about getting a new type of customer.”

But Scion’s claims about its (relatively) youthful median buyers’ age is being disputed by Strategic Visions, which claims that the current median age of Scion buyers is a not-so-young 47. And it’s been trending higher ever since 2006. The median age of all car buyers is 54.

“Scion hasn’t been a standout for any product reason,” said Mike Bernacchi, a marketing professor at the University of Detroit Mercy. “There hasn’t been much innovation from Scion vehicles. It made an early splash, but hasn’t shown great legs.”

“They started with a very innovative and aggressive idea,” said Stephanie Brinley of AutoPacific. “When the first vehicles were successful, they got nervous about losing sales and lost the innovation.”

Echoing our repeated Scionic mantra, Rebecca Lindland of IHS Global Insight sums it up:

There’s a disconnect between Scion’s cars and its marketing message. Creating a brand to feed buyers into Toyota and Lexus is risky…If it doesn’t work, you’re committed to a brand that loses money. We’re not sure how many additional vehicles Toyota has sold because of Scion.”Just because a brand has a mission, that doesn’t mean it will succeed.”

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49 Comments on “Scion Dying...”


  • avatar
    dmrdano

    “Time to prune the family tree?”  I want one and my son doesn’t.  I am 50 and he is 26.  Answer your own question.

  • avatar
    Brian Tiemann

    The original xB was interesting, tiny, and audacious. The new xB is a big heavy boring slab.
     
    Trying to follow your customers as they grow up by changing your cars to match is a losing proposition. Keep making the same thing that made you popular to begin with, and market to the same age group, where new potential customers arrive every year. You can worry about keeping the old ones later, especially if you’re Toyota and already have a zillion cars to offer them when they get married and slow down.
     

    • 0 avatar
      gslippy

      I love my 05 xB, but Scion has nothing to interest me today if I were looking again.  I’d probably start with Kia or Hyundai.
       
      And I’m not sure why the tC ever existed.  Other than a pretty face, it has nothing to distinguish it from any other car in its class.

      Don’t forget, however, that one of the best features of Scion is the no-haggle pricing. That is a huge benefit in the purchasing process, and it’s something I think all manufacturers should move toward. I hate the ridiculous and endless string of sales gimmicks put up by everyone else, including Toyota.

    • 0 avatar
      baldheadeddork

      Gslippy – the no haggle pricing is the greatest con in the history of selling cars. Somewhere on the Ten Commandments for Selling Cars is “Stick to the sticker, steal the trade.” It means make your money on new car sales by getting you to pay whatever is on the sticker (locking in the profits built into the MSRP) and boosting their margin by offering as little as possible for your trade.
       
      No haggle effectively disarms the consumer in the most important step of the negotiation.  By the time they take your trade back for an inspection you’ve got at least a couple of hours and a lot of emotion invested in making the deal. You want this car. When they come back and say that because of some unknown problem, past (but thoroughly repaired) damage, or the local market your trade is worth three grand less than what Edmunds and KBB told you. If you can’t haggle on the purchase price, your only choice is to get screwed out of thousands of dollars or get up and walk away.
       
      Buying my wife’s 2005 xB was the worst car buying experience either of us have ever had. The only good thing that came out of it is that she loves the car and it convinced her to never, ever do another trade-in again.

    • 0 avatar
      gslippy

      @ baldheadeddork:
      I traded a car when I bought my 05 xB, and received a fair trade-in value.  I’m sorry to hear you didn’t.  I bought my car 2 hours from home, so part of my leverage is that I won’t be back – a tactic I have used 3 times.
       
      Remember that not everyone trades a vehicle when they buy a Scion.
       
      New cars are pretty much commodities at this point, and should be priced accordingly.  Mfrs know how much it costs to produce and sell a car, and there is no reason a car can’t be priced in the same way as a cordless drill at Home Depot.  Trade-ins will always be subjective, and the emotional tie to the new car takes place whether you’re purchasing a no-haggle car or not.
       
      Instead, what we have is an ugly maze of meaningless MSRPs, rebates, discounts, sales, and clearances.  “No-haggle” doesn’t mean you have to pay more; it would simply level the comparison field among mfrs.  If there’s any collusional pricing strategy among mfrs, it’s that they don’t do no-haggle pricing, leaving the pricing picture purposefully vague.

    • 0 avatar
      Geotpf

      badheadeddork-You could always not trade in your old car instead of getting a low price from the dealer and then sell it elsewhere.  That’s what I did when I bought my Scion.

    • 0 avatar
      MadHungarian

      @gslippy:  Does that really work?  Buying a car at an out of the way dealer that is.  Service is a profit center for most dealers.  My experience has been that if they know they won’t get any service business from me, they feel like they have to make every dollar they can on the sale.

    • 0 avatar
      DweezilSFV

      Gslippy: The TC has exactly what people here claim they’re all ape s**t to buy: a hatch. But I guess if it’s not obvious that defeats the reason for wanting one, so yes, I agree. What was the point ? Expecially when from 100 yards away it looks like an ION QC

    • 0 avatar
      JuniorMint

      at baldheaded:
      try Carmax next time for your trade.  They want it, because they can ship it to wherever in the country they’re going to get the most for it.
       
      I’ve had three cars appraised at a number of dealerships, and in all cases, Carmax gave me 20-30% more.  The stealerships would only match the CM offer if I left it in the car when they were looking it over.

  • avatar
    midelectric

    The whole feeder brand concept has been tried before and just required a ton of govt money to stay solvent.   Go back to building an efficient, reliable car and let the demographics work out themselves.  When suits try really hard to go after the “young, hip” crowd it usually ends badly.

  • avatar
    FishTank

    So I guess they’re not coming to Canada? ;-)
    Agreed about the xB, Brian. I wonder if anyone at Toyota realizes what a mistake they made, or do they all have GM-syndrome?

  • avatar
    rpol35

    Scion’s not about sales totals,” Hollis said.

    I bet Mr. Toyoda would disagee.

  • avatar
    mjz

    The new xB and xD are real duds. Thankfully they have not yet replaced the tC with that incredibly ugly concept they showed a while back. They should just dump Scion as a brand and market them as Toyotas.

  • avatar
    gsnfan

    Was there ever a reason to call them Scions? Why couldn’t they be Toyotas?

    • 0 avatar
      Geotpf

      Because Toyotas are seen by young people as boring, as opposed to, say, Hondas.  (At least in theory.)

      In any case, I love my 2006 Scion xA and hope the brand survives.  (I’m 35, if that matters.)

  • avatar
    meefer

    They HAD the right product mix when the brand was introduced.  Then they forgot that it was a feeder brand and proceeded to make the cars even bigger, and making smaller Toyotas with no gap in price.  Yaris vs. xA is like a battle of homeliest girl at the prom.
     
    To paraphrase Diddy in Made, Toyota took this Easter Egg hunt and turned it into a butt-hump-a-thon.

  • avatar
    CyCarConsulting

    Having been with Toyota on and off for years, it’s hard to imagine the failure of Scion. Priced fairly, well constructed, and stylish, not to mention reliable, are all the qualities one would expect for success. Updates and improvements would seem to be all the needed punch to continue on the same course with increased sales yearly. It seems something else is going on. With all the theories out there, I don’t think any have really hit the mark, as to the real reason. I would sure like to figure this puzzle out. Changing body styles regularly is not always the anwer. Look at the Bug, and Mercedes years ago.

    • 0 avatar
      rogerthecarnut

      To CyCarConsulting
      We’ve heard from the enthusiasts about all the pluses of Scion products and to be sure they definitely have there good points. I have a practical side myself and can see many advantages offered in these models.
      I’m not, however, in any way shape or form what you could consider a Scion enthusiast. As a matter of fact, there are so few Scion enthusiasts that I would have to come to the conclusion that the available market might well be saturated.
      I come this conclusion by one means only, hearing how the average joe reacts to the sight of a Scion. The overwhelming response is that it is the ugliest thing on the road.
      I tend to agree. I would be slightly interested in investing in one to store and preserve for later sale to a sentimental previous Scion driver who mourns the demise of their favorite make. Might be a buck in it.

    • 0 avatar
      Flipper

      My theory is Toyota isn’t all that interested  in selling Scions. Its better for Toyota , and most likely the dealer to haggle down & sell a Matrix, to the average xD or xB buyer. The buyer gets a car @ a chunk off MSRP .Toyota gets to sell a car from the now, near defunct NUMMI.  And doesn’t have to deal with the dollar to yen ratio problem, that squeezes down profits on the built in japan xD & xB. Even more so a buyer can go to a Pontiac dealer and get the same Toyota technology at GM closeout prices making the scions no dicker policy even worse for these economic times.

      I’ll also say I am an xD driver & I’m 49

  • avatar
    George B

    When I was young I only shopped for used cars.  Not sure if the Scion brand is the right idea.  Maybe Toyota could have a youth oriented no-haggle certified used car program instead.
     
    The original Scion xB was a unique product that brought an adapted JDM vehicle to the US.  Does the right hand drive vs. left hand drive issue make JDM to US product adaptation too expensive for a niche product?
     

  • avatar
    Brian E

    As long as all Scion dealers are also Toyota dealers, it doesn’t matter if they keep it or not since the incremental cost of the extra brand is low. If they feel that they are appealing to a type of customer who otherwise wouldn’t be shopping at a Toyota dealer, it’s worth it to keep it. If any of the models wouldn’t be kept around if it was badged as a Toyota due to low volume, it should be dropped.

    In my mind, what will make or break Scion is the upcoming FT-86. If it’s badged as a Toyota, why does Scion exist? And if it’s badged as a Scion, will they give it the promotional effort it deserves?

  • avatar
    Caraholica

    I dont know that Scion’s feeder Brand strategy is a bad one. It does build traffic and image which helps drive something else out of the showroom. Toyota (and Others -Honda Element, etc) seem to forget who has the money. I do. My kids dont. They’re not buying anything new. They are much more interested in other parts of life (like how good the stereo is) than the car itself. I’m 59 and much more interested in these than they are. I like the young image thing, it’s an approach that has worked forever.
    To be viable Scion has to do what seems to be impossible. Keep the price point down and the cars interesting. The cars have to be cool, the first Xb was, Nissan Cube is, Civic Coupes are, Xa’s arent. Hardly anyone seems to hit twice in a row. I think the older buyer thing is overstated. If you write a full paragraph on facebook, you’re old.  Kids seem to see thru the rest of it and like what they like.
     

    • 0 avatar
      fincar1

      It still seems to be true what Bill Mitchell, the GM stylist, once said: “You can sell a young man’s car to an old man, but you can’t sell an old man’s car to a young man.”

  • avatar
    hwyhobo

    The day Toyota released the beefed up Scion xB, it was clear they lost the plot. The fact that whoever was responsible for that fiasco was not fired, foretold the future of the brand.

  • avatar
    psarhjinian

    Having been with Toyota on and off for years, it’s hard to imagine the failure of Scion. Priced fairly, well constructed, and stylish, not to mention reliable, are all the qualities one would expect for success
     
    And you’d be right, except that you can get those same qualities from a mainstream Toyota.  Scion ought to have been a vehicle for Daihatsu in North America, or an inverse Lexus: cars so small and cheap that they’d drag Toyota down or fail to sell in the volumes that would warrant stewardship of the national brand.  There’s a market for simple, reliable transportation that prioritizes function over form.
     
    What happened is that Toyota got greedy: the second wave of Scions (the tC, xD and 2G xB) were committee cars: someone took a look at what kept people out of Scions (refinement, size, power) and added those to the mix, somehow forgetting that Toyota already sells those cars.  And suddenly, Scion is looking more like a Japanese Saturn than an American Daihatsu.
     
    Scion ought to sell perhaps three to five vehicles: an equivalent to the Yaris hatch (which should disappear from Toyota’s showroom), the Daihatsu Materia or Mira, the Aygo and/or the Copen, and the Avensis.  I wouldn’t object to a Kei truck, but I wouldn’t expect one, either.  I’d also seriously consider dropping the RAV, Highlander or Matrix as it’s getting a little crowded in T-land and the Matrix’s job could be split by a Scion-badged Avensis and Yaris.
     
    If Kat Watanabe’s culture had a fault, it’s that he tended to chase profitable volume wherever possible.  Most of the time this worked, but in the case of Scion I think the brand managers need to resign themselves to the idea that they’re not a profit centre but a gateway, and that their job is to keep new buyers and utilitarians from ever stepping foot in Kia stores.

    • 0 avatar
      MadHungarian

      I think moving some existing lines from Toyota to Scion would not work.  Buyers would see through that charade immediately.

      Toyota needs to spend more time at the all Japanese car meets that are all over the west coast.  Look at the kind of cars those mostly younger collectors are restoring and modifying.  And note the instant cachet for anything JDM.  Imagine Scion building some light, fun cars that give you an experience like the first gen Civic or the ’70 vintage RWD Corolla, without being too PT Cruiser-ish retro.  For retro, something cute-retro similar to the Nissan Figaro.   Then a model with JDM cool.  And something like that 80’s 4WD Corolla tall wagon that is a cult car of sorts.

  • avatar
    carlisimo

    I think the Scion idea can still work, it’s just that the xD and 2nd-gen xB don’t fit the brand.

    It’s not really about youth… I’d say Scion caters to the artsy and edgy. That’s probably a young demographic overall, but it has members of all ages. And if a non-artsy old person buys the car because it’s practical and good, that’s not a bad thing like some people claim. It means someone bought your car without you marketing to them – it means the car is fundamentally good. The first set of Scions were good, but the new ones are nothing special next to Toyota’s equivalents.

    The first xB was great because it was so jarring. It was incongruous enough to <i>offend</i> people and that was awesome! The tC was nice too, with a TT-like look and a good interior for the time. It’s an older model though and the segment’s moved forward quite a bit, so it’s time for a replacement. I don’t mention the xA because it might as well have been a Toyota.

    Scion doesn’t need to sporty. The FT-86 would sell to more Toyota fans as the Celica – it’ll sell to people who remember Toyota’s sporty days, not to young people. The “youth market = sporty” thing is an absolute myth (“sporty-looking” may be accurate though). If they DO make it a Scion, I pray they don’t give it the tC name. The brand needs to keep a practical, comfortable, heavy, big-sunroof car named the tC because a lot of people like that formula. If they come in for their second tC and get a hardcore lightweight RWD car, they’ll get angry and leave, and the older “kids” who want a Celica will never come because they’re not looking for a tC.

    • 0 avatar
      Via Nocturna

      +1
       
      Scion has no reason to exist in the JDM or Europe, as there’s simply too much overlap (or, in the case of the first-gen xB, simply conversion to left-hand drive and some prudent decontenting) with Toyota’s own product. As another commentator mentioned, it would’ve been interesting to see if Scion’s fortunes would’ve been different if Toyota had instead used Scion as a pipeline for bringing JDM vehicles to North America. I agree that Toyota’s decision to brand its FT-86 as a Scion or not will say something about Scion’s future, but I think an even more important car is the iQ.

    • 0 avatar
      Geotpf

      The xA, first gen xB, and xD are all JDM Toyotas with few changes.  The tC is a coupe version of the European Avensis sedan (which is between a Corolla and Camry in size).  The new xB is based on the Camry.

    • 0 avatar
      JuniorMint

      @geo:
       
      The new xB is sold the Corolla Rumion (i.e. wagon) in Japan.  It does strike me as particularly Camryish however (engine included).

  • avatar
    Ion

    I think a big problem is that Scion is more or less a US only brand designed to hit the youth demograph Toyota lacks in a post Celica market, but Toyota is trying to get youth back into their main brand world wide. So their giving cars like the Corolla and Sienna these awful bodykits to attract a younger demograph and that makes Scion somewhat useless. It also doesn’t help that they let the TC get so old and stale.

  • avatar
    eggsalad

    I’m 45 and I drive an ’05 xB. But so what? Why is it relevant that I’m not 25?

    • 0 avatar
      JuniorMint

      I think people are looking at the formula to determine what is going catastrophically wrong with it.  Once sales start crashing 50% or more people begin to question the original intent.
       
      Frankly, I happen to think the problem with sales extends far beyond purchase demographics.  Even if only folks your age purchased the first-gen Scions, at least Toyota was selling a s–tload of them.

  • avatar
    ponchoman49

    I still talk to people today who don’t know what a Scion is. 90% of the drivers I do see driving one are 50 years old on up. The younger generation don’t seem to care much about them with there tiny underpowered engines, fugly styling and lawn mower sized wheels. It’s the hippy VW Bus/Beetle crowd in there 60’s that seem to connect with these cartoonish looking vehicles. So what does Toyota do? They redesign the box in to a fatter, heavier plainer mess with a higher price tag and make the xD which is just a redundant Yaris 5 door hatch with the same mislocated hard to read center dash. Result- lower sales because even the hippy crowd has lost interest.

    • 0 avatar
      baldheadeddork

      I’ve noticed that, too. By far, the most common question my wife gets about her xB is “Who makes that?” People have no idea that it’s a division of Toyota. It’s one thing for GM to brand Saturn as a “different kind of car company” because they didn’t want the new brand to be associated with all the crap GM was making in their other divisions at the time, but I never understood why Toyota never marketed Scion as their new brand.
       
       

    • 0 avatar
      Flipper

      The xD has a conventional dash layout

  • avatar
    seanx37

    OK, I think Scion has two basic problems.
    #1-The economy. With unemployment or underemployment at great Depression levels for younger people there is no market. For brand designed for young people that is a terminal problem. People under 30 simply cannot afford a new car.
    #2-The cars are effin boring. Why the hell does Toyota not have a small good-looking sports car? And why no performance Scion? Something equivilent to the Civic SI, or Mini Copper S? A small easily customized pick-up would be a good idea as well. As for the xB. A good idea, but they made it too boring and ugly. Nissan Cube and the Kia Soul walked away with that small market.

  • avatar
    mtymsi

    Toyota has completely lost their way with the Scion brand, IMO they may very well be selling more Xb’s today if they were still selling the first gen version. The second gen is a complete failure both as a vehicle and saleswise. Toyota needs to take off their rose colored glasses and market  properly designed Scions to the market demographic that is actually buying them and stop pretending Scion is a youth oriented feeder brand when clearly it isn’t. Scion certainly puts to rest the theory that Toyota can’t make enormous mistakes in both marketing and the product itself. With Scion sales off a mind boggling 66% from their peak only 3 years ago you would think Toyota would wake up and realize they are doing something very wrong with Scion.

  • avatar
    Steven02

    I think the first Scions were good, but the new xB and subsequent models have missed the mark.  They are no longer the efficient quirky cars that they were originally.  I think that if Toyota really wanted to capture the market here, make Toyotas that are exciting and youthful.  Not all of them need to be this way, you can keep the Camry as dull as you want, but everything smaller than a Camry needs to be much more appealing.  Maybe something sport oriented would be good.

  • avatar

    The fact that everyone here knows that the new xB is a disaster except for Toyota tells you everything you need to know about how seriously they take Scion. Having the FT86 come in at 20K and not be the replacement tC will be the end of the line.

    These amalgated brands need to decide how to segment the market and actually segment it.

  • avatar

    I found that tC was a better car than it looked, but it’s far too sophisticated for a Scion. Seriously, 2.4L and IRS? But it’s too late. As for the amazing failure of the xB 2, not much can be added to the linked review (my only beef with it is the unexplicable love of soft plastics, a disease of all reviewers). But it’s not just xB. Yarris has smaller engines then Scions, for crying out loud. Their little eggmobile is adorable, and cheap — if you have the heart to fight the sales staff. And it brings us to the next point.
    Aside from the product failure, Scion was supposed to sell with no-haggle service. The vast majority of customers absolutely hate the experience of bargaining, are inevitably ripped off, and what’s worse, they know it. But idiots at Toyota established Scion sections in Toyota dealerships!! So, the same people who rip you off are also asked to treat customers well on the other side of their facility. Like it ever was going to work! Scion’s sales model could only work in completely separate sales centers. As it is, Scion is impeded by the Toyota franchizee sales staff at every turn. Heck, in my town, we have 3 locations, and it’s next to impossible to buy a Scion. They simply would not stock the cars, and ask you come later when they might have a shipment.

  • avatar
    mtymsi

    Anybody that thinks no haggle pricing is a consumer benefit must think overpaying is somehow a good thing. This logic isn’t the least bit logical. Especially with cars except from time to time a select few where supply and demand freely dictates the vehicle will sell at MSRP or above why would anyone pay MSRP for a car and on top of it view that as beneficial?

    • 0 avatar
      JuniorMint

      I would rather overpay by 20% than worry for the entire life of the car that I might have overpaid by 50% because the salesman fucked me over.
       
      Buying a car from a slimebag salesman, whose only goal in the transaction is LITERALLY to make as much as he can at my expense, was one of the most heinous experiences of my life.  I would rather make a few extra payments and get a reliable car for what I consider fair value than go through that again.
       
      Besides, have you looked at the prices of Scions lately?  I got a car I expect to get an easy 150,000 miles out of for $15,500.  That’s a hell of a deal however you end up with it – I really don’t think you’re going to do much better with the power of negotiation.

  • avatar
    redrum

    Anybody that thinks no haggle pricing is a consumer benefit must think overpaying is somehow a good thing.

    Only if you assume MSRP = an inflated price.  Nowadays the MSRP has mostly become a marketing tool to make people think they’re getting a “deal”, but there are also examples like the iphone/ipod where the sticker price is enforced and meaningful.
     
    Admittedly the car MSRP has been traditionally inflated in anticipation of rebates and haggling (especially for domestics), but the whole idea of a no-haggle price is that you get a reasonable, fair MSRP and thus dealers can concentrate on winning customers by providing the best SERVICE instead of promising the best price (which is unknowable anyway).
     

  • avatar
    geozinger

    Scion was an experiment that seems to have failed. IMO, Kia has done a fantastic job of stealing the youth market for new cars. The Soul, the new Koup and even the upcoming SUV Sorrento has my eye wandering their way.
    I think one of the problems chasing the youth market is that they’re rather fickle, moving from one fad to another. It seems to me there were similar thoughts when the wizards of the auto mall all thought young people wanted sporty coupes. There were lots of them (Ford Probe, Mitsu Eclipse, Mazda MX-6, V6 Camaros and Firebirds etc.), but they were old hat in a very short time, probably before most of the tooling was amortized.
    The original xB was funky enough for people to notice. Mostly grayhairs like me, not our kids. There’s been plenty written about the new one, no reason to beat that horse. The xD and xA are largely forgettable and the tC is the Pontiac Sunfire of Toyota’s line up.
    My kids don’t want Scions, they want tricked out VW’s, Hondas, even Jeeps. The new Kias are starting to show up on their radars, especially since they have jobs of their own and are looking for something they can afford with out a co-signer.  Maybe Toyota should quietly end the Scion experiment and just bolster the bottom end of their lineup with a car that can compete against the Koreans. Or put HSD in the whole line up. That’ll fix everything…

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