Is it the end of Scion? Brand loses sales as 2nd-generation models struggle
01-14-11, 08:19 AM
#106
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Some good info
http://www.autoblog.com/2011/01/14/s...tomer-we-want/
http://www.autoblog.com/2011/01/14/s...tomer-we-want/
A chat with Scion Vice President Jack Hollis was probably the biggest 'Let's get something straight' moment we had at the 2011 Detroit Auto Show. Sales were down 20 percent in 2010, the new 2011 tC didn't get the warmest reception from its former proponents, and the perception is that Scion is losing a grip on its youth-oriented message. Hollis sought to address those points and more:
- "Some people have the impression that we've lost youth... but it's about identical: the median age for the tC was 28 last year, now it's up to 29. It's still the youngest in the market." As a brand, Scion has a median age of 41.5 years, up from 40.
- Scion's sales were down 20 percent last year, but Hollis says that's only the point "if volume is your goal." He went on to say, "We could double sales, but we don't rely on traditional incentives." Sale prices remained non-negotiable throughout the recession and the only two cash incentives – $1,000 off for college students and military personnel – are handled through Toyota Financial Services. Hollis is more focused on "Who is the buyer you're capturing? The average age of our buyer in a recession was under 30. We have exactly the buyer we want." That means that "we lost numbers, not youth. That's not a Scion problem, that's an industry problem."
- "The key tenet of Scion is to sell to people who have never purchased a Lexus, Toyota or Scion before." Seventy percent of buyers of the first xA and xB had never bought into the Toyota group before, and Hollis says that although the second generations of both models were very different, they achieved the same percentage of first-time buyers. "It's not my intent to have loyalty retention, but Toyota brand retention," to get the buyer started on an investment in Toyota's products.
- Still, volume is on his mind. "My goal is to increase sales." The 2011 Scion tC had an 80 percent increase in Q4 last year compared to 2009, and "I have the tC all year this year." Hollis expects sales better than last year, "absolutely," and even to make gains on 2009 numbers.
- On keeping up the momentum, he's admits that "Scion has got to find new ways to attract youth," adding "I think Scion will take the lead."
- If you have your eye on a Scion iQ, it's "coming out in summer," and you'll be able to tweak it as you would any other Scion. There will be less customization possible than on a tC "on a percentage basis," but the ethos remains, "when you bring out a Scion you need to have personalization."
01-14-11, 08:39 AM
#107
I like that "Let's get something straight" kinda talk.
Businesses run with a strategy that encompass not only number of cars sold, but all those factors mentioned above.
It's a plan. May not be the kind of plan people are willing to play, but it's a Mission Statement. Scion has a goal to address a niche market. Compare that to other brands such as Volvo or Saab or Buick or Acura: do you think they have a Mission Statement worth fighting for?
Businesses run with a strategy that encompass not only number of cars sold, but all those factors mentioned above.
It's a plan. May not be the kind of plan people are willing to play, but it's a Mission Statement. Scion has a goal to address a niche market. Compare that to other brands such as Volvo or Saab or Buick or Acura: do you think they have a Mission Statement worth fighting for?
01-14-11, 10:08 AM
#108
xD is real Toyota... xD is what people reffer to as good ol Toyota.
So when people ***** about xD, i reckon they never drove one. Or dont have clue what they are talking about when they say they want toyota of old.
It is high quality small vehicle, a lot more expensive than Yaris, and you can see where they had to cheapen the Yaris from xD, in order to get to competitive price point.
I drove Euro xD - Toyota Urban Cruiser, Diesel with AWD, and that car had better bump absorption than the damn Rav4... It is built like a vault. If not for hard plastic (another true Toyota JDM feature), you would think you were going around in well done Lexus. Of course, it is way too expensive and its interiors perceived quality is not up to Germans, like real Toyota of 90s.
So when people ***** about xD, i reckon they never drove one. Or dont have clue what they are talking about when they say they want toyota of old.
It is high quality small vehicle, a lot more expensive than Yaris, and you can see where they had to cheapen the Yaris from xD, in order to get to competitive price point.
I drove Euro xD - Toyota Urban Cruiser, Diesel with AWD, and that car had better bump absorption than the damn Rav4... It is built like a vault. If not for hard plastic (another true Toyota JDM feature), you would think you were going around in well done Lexus. Of course, it is way too expensive and its interiors perceived quality is not up to Germans, like real Toyota of 90s.
I was at a Toyota dealer yesterday and saw the xD.
That car is tiny.Looked up the length at 154.7" and width a 67.9.
Though,it didn't feel as small sitting in the car.
01-14-11, 11:43 AM
#109
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Some very good points there, I agree with them. Point is, Scion as a brand is doing EXACTLY what Toyota intended it to do. Sales volume was never a top priority for the brand.
01-14-11, 01:57 PM
#110
Lexus Fanatic
Scion volume with new products can be enhanced. Separate branding of Scion in US is not overly expensive for a company like Toyota.
The top selling model continues to be the Xb (both 1st and 2nd gen) as expected.
The top selling model continues to be the Xb (both 1st and 2nd gen) as expected.
04-01-13, 04:20 AM
#111
Entry Lux
Toyota is weighing a major shift in positioning for its struggling Scion brand: moving upscale to target entry-level luxury models coming from European makes.
The new lower-luxury niche includes Mini, the front-wheel-drive Mercedes-Benz CLA arriving this fall and Audi's compact A3 sedan shown last week on the eve of the New York auto show. Scion has gone after young entry-level buyers since its inception 10 years ago but has lost its early momentum.
"Everybody is looking at what direction Scion should go," said Jim Lentz, CEO of Toyota's North America Region. "We have to take a real hard look at what the future of the industry looks like strategically, and where we want Scion to play."
Scion, not Lexus, may be the way Toyota meets the new premium competition typified by the CLA, which will start at under $30,000, not including shipping. The Toyota brand, which has 18 nameplates, may be too product-heavy to compete in the mass market and join the entry-luxury fight as well.
And Lexus has refused to drop below the $30,000 price point.
"There's a cost to provide that outstanding Lexus customer service," Lentz said. "We don't want to lose that, and we don't want to cheapen our cars."
No decision has been made about Scion's future, but Scion Vice President Doug Murtha says: "If we stand still, we're going to be in trouble."
Lentz, who was Scion's 1st boss, said that when Toyota executives discussed strategy at the brand's birth they split on whether it should be a Korea-fighter or an entry-luxury brand.
"We were torn at what direction to go," he said. "We could go any of those directions."
Lentz cautioned that the idea of Scion moving upscale "is not a widely held view in the company." For 1 thing, the overall size of the segment for entry-luxury cars starting between $25,000 and $30,000 has not been demonstrated.
But Scion could move up the price ladder because it's already part of the way there. When the brand launched, entry-level cars were in the $13,000 range.
"Today it's hard to find much value below $18,000 to $20,000," Lentz said. "There's going to be a big need in the $25,000 range for a fun-to-drive, nice-looking, value-oriented product."
Scion also could compete against the German luxury brands that insist true luxury means rear-wheel-drive but also have developed less expensive fwd platforms for the entry-luxury segment. The Scion FR-S is rwd, and Toyota executives have said the platform is flexible and could spawn variants.
"As we look at Europeans coming downmarket, the FR-S fits into that position," Lentz said.
Staying put
Moving up the price ladder could expand Scion's lineup. The FR-S coupe starts at $25,255, but a Toyota-badged convertible version unveiled at the Geneva auto show last month likely would be several thousand dollars more -- making it a stretch for the current target Scion buyer.
"The same body can't do a coupe for Scion and a convertible for Toyota," Lentz said.
Still, Lentz feels there is cause for Scion to remain in its current econobox niche.
"The Corolla is a great car, but it's a Corolla," Lentz admits about the dowdy but perennially strong-selling compact. Toyota hopes the 2014 Corolla's styling, seen in the Furia concept, will increase the Corolla's cool factor among Gen Y buyers. Plus, a new low-priced segment could be erupting with Honda entering the subcompact crossover segment in 2014.
There's another possibility cited by some insiders: Fold entry-level Scion products back into the Toyota brand. With the Corolla aiming for younger buyers, it's starting to play in Scion's original sandbox. Lentz discounted that possibility.
Scion has sold 900,000 vehicles in its short history. The recession took a huge bite of out of sales, which fell from a peak of 173,034 units in 2006 to 45,678 in 2010, as young buyers couldn't get steady jobs or good credit. Scion has rebounded slightly, selling 73,505 vehicles last year.
But the brand has room to grow. Among the age group it targets, "60% weren't in the market when we launched," Murtha said.
Many Scion buyers have moved up in the world, and are ready to buy a more expensive vehicle. Murtha says part of Toyota's study involves whether Scion should follow them up-market, or await the next round of entry-level buyers.
Stale product
For nearly a year, Toyota executives said last week's New York auto show would display a new direction for the brand. Instead, there were several minor mid-cycle freshenings.
That's odd because the xB and xD hatchbacks are 6 years old -- ancient for a brand that promised quick-turn product cadences.
Lentz declined to comment on the future of the xB and xD. Part of the reason for the slow product cadence is global. Scion must struggle for engineering and product development resources. As the parent company invests heavily in emerging markets such as China and South America, funding and staff for low-volume niche products only sold in the United States and Canada has a low priority, Lentz said.
The bottom line is that Toyota can't stand still.
Said Lentz: "If the market is coming to you, do you do it with Toyota or do you do it with Scion?"
04-01-13, 05:21 PM
#113
Lentz, who was Scion's 1st boss, said that when Toyota executives discussed strategy at the brand's birth they split on whether it should be a Korea-fighter or an entry-luxury brand.
"We were torn at what direction to go," he said. "We could go any of those directions."
Lentz cautioned that the idea of Scion moving upscale "is not a widely held view in the company.
"We were torn at what direction to go," he said. "We could go any of those directions."
Lentz cautioned that the idea of Scion moving upscale "is not a widely held view in the company.
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