Facing Downturn, Scion Turns To Metal To Move Metal

How is Scion adapting? According to AN [sub]:

Responding to its multiyear sales slump, Scion is adding two all-new vehicles, including a sporty, $20,000-plus coupe… Scion also is making its retail sales approach a little less laid-back. And Toyota may build Scions in the United States to negate the currency disadvantage hitting its current Japan-built lineup.

Those two new products are the FR-S (FT-86/Toyobaru) sports coupe, which will expand the Scion brand into a performance-oriented niche it has never played in before, and the Scion iQ, a European-style premium city car. Neither will offer the low-cost, high-value positioning that defined Scion’s relatively successful first generation of products, although the iQ does seem to be the relatively better fit for the brand, offering high efficiency and urban utility in a tiny package. The FR-S, in particular, will be priced out of Scion’s traditional entry-level market, and will offer a level of performance and enthusiast-orientation that has never been a key part of the brand. Meanwhile, does that sales chart at the top of this story indicate that Scion should be expanded upmarket, or return to its roots?

But Scion is returning to its roots… in its least-compelling venue, namely marketing. Though niche-oriented marketing has been the one constant amid Scion’s fluctuating product mix and positioning, it’s largely been overly niche-oriented to the point of self-parody. Not that deviants don’t need cars too, but the real fuel economy and practicality value propositions offered by Scion’s first generation (in particular) often attracted a much-older consumer, creating a strange disconnect between Scion’s image and its reality. But don’t look for any of that to change, as Scion is doubling down on its too-cool-for-school positioning.

It is expanding its underground cultural reach into areas such as the “death metal” music scene. The rise of social media means Scion is loosening up the way it talks with Gen Y.

This gets back to the central myth of the Scion brand that Hollis points to, namely thatToyota has always viewed Scion as more of a mad-scientist laboratory than a profit center. It was intended to attract young buyers to the Toyota family in a way that mainstream Toyota compact cars never could.To understand how deeply self-deluded this perspective is, one must only look at the collapse of Scion’s sales and compare them to the competition’s movement towards offering ever-more-Scion-like products as part of their mainstream brands. From the Mazda2 to the Hyundai Veloster, from the Ford Fiesta to the Kia Soul, mainstream brands are adding fresh, funky, fuel-efficient cars to their lineups which are eating Scion’s lunch in sales, while directly refuting Toyota’s absurd perception that younger buyers will avoid cars aimed at them if they’re presented as part of a mainstream brand. After all, the Hyundai brand is expanding down into Scion territory with its Accent and Veloster, while simultaneously moving up into the luxury segment with its Genesis and Equus models.

Perhaps then, Toyota over-emphasized the importance of unique, youth-oriented brands. But, more tragically, Toyota also did its own mainstream brand a huge disservice by splitting off a youth brand, thereby signaling that Toyotas were, in fact, boring, utilitarian, unexciting vehicles. Why weaken a mainstream (and therefore, inherently flexible) brand in order to create a mediocre, over-marketed, under-delivering brand (according to a mystery shopper survey, Scion’s sales practices are third-worst in the industry, while Toyota ranks at about the industry average)? The sooner Toyota sees the light and pulls the plug on its failed Scion experiment, or at least return it to its original vision, the better.