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http://www.usatoday.com/money/autos/2010-10-07-scion06_CV_N.htm?loc=interstitialskip
This is partially why Scion is hurting:
I totally agree...the first xB was quirky enough that it worked beautifully for our market.![]()
LONG BEACH, Calif. — Willowy models wander around in short shorts, Katy Perry's summer anthem California Gurls blasts from a DJ's stereo, and a nice turnout of Scion devotees wolf down free tacos.
As successful promotions go, this one had all the right stuff. There was just one problem. Though they'd come to see the new tC sports car that went on sale Friday, most members of the Scion Evolution car club invited to the recent event at a Toyota dealership here waxed nostalgic for the 7-year-old brand's first generation of vehicles, especially the boxy xB crossover. Some said they aren't as excited by the current lineup.
"When they came out, they had the quirkiness," explained Matt Sixt, 24, of La Habra Heights, Calif., who drives a bright orange original xB. "People wondered what happened to the weirdness, the unusualness."
Toyota created Scion to try to bring a little fun and fashion to the auto world. The goal was to attract young buyers with edgy, crazy designs and make them buy Toyota brands for life.
But after peaking in 2006, Scion has endured slipping sales, a second generation of products perceived as less edgy and a lack of buzz that leads to the inevitable question: Has Scion lost its cool factor?
Scion executives and its fans are quick to argue no, that the brand's troubles are merely a lull. A freshening of the lineup is underway. The aggressively styled tC is now out, and an iQ minicar, which is sure to be compared with the Smart Fortwo, is on the way — products they believe can resurrect the patina of cool. Inevitable improvements in the nation's economy, they predict, also will help turn around flagging sales.
Industry observers aren't as sure. "The brand has lost its quirky, youthful exuberance," says James Bell, analyst for Kelley Blue Book. "You can't manufacture trendiness."
Says George Peterson of consultant AutoPacific: "Scion can be considered a noble experiment that possibly failed."
Sales still sliding
Sales of each of the three Scion models so far this year have seen more dramatic drops from the same period last year than any Toyota-brand vehicle except the small, cheap Yaris. Collectively, Scion's three models sold 3,562 vehicles in September, less than half the sales of just one Toyota model, the Prius.
In the same month in 2006, Scion sold five times as many vehicles, Autodata reports.
Back then, Scion sold the tC, a subcompact sedan called the xA and the vehicle that put it on the automotive map, the xB crossover. The xB's squared-off look was considered so odd that it was described as looking like a microwave oven on wheels. No one was more surprised than Toyota executives when it proved to be the image maker for the brand.
But when the xB was redesigned for model year 2008, it was given a more powerful engine, grew by a foot, put on 600 pounds, gobbled 14% more gas and cost about $2,000 more. And the edgy box became a little more conventional. Likewise, the xA was followed by a larger xD sedan that never quite caught on.
Overnight, xB went from being "trendy even beyond Scion's expectation" to being dismissed as just a "small SUV crossover," Bell says. The xD was "stillborn." Shrinking sales have been a drag on the 996 of 1,233 Toyota dealers that sell Scions. The dealers had to buy signage, tools and parts, and train sales workers for the Scion brand; now, they don't have the sales to show for it.
Interestingly, while sales of Toyota products and the company's Lexus vehicles have been zapped by a succession of safety-related recalls this year — 15 so far between them — Scion hasn't had a single recall.
Just as its creators intended, Scion has one of the lowest average ages of buyers of any brand. Buyers of the current tC, for instance, are age 26, on average. But catering to the youth market presents its own unique challenges for Scion, including:
•Credit. The credit crunch was hard enough on average Americans, but it was even tougher on twentysomethings. Scion was having trouble getting many of its buyers qualified for credit to buy new cars even when the economy was robust. Now, the "biggest challenge" is the tightening of credit, says Owen Peacock, marketing communications manager.
•Joblessness. While the national unemployment rate stood at 9.6% as of August — the latest figures until September's are released Friday — workers in the prime Scion-buying ages of 20 to 24 had a 14.9% jobless rate, according to the Bureau of Labor Statistics. For that age group in August 2006, the jobless rate was 8.1%.
Potential young buyers "have been hit hardest by the recession," says Jack Hollis, who heads Scion in the U.S. "They would love to get in a car, but they just can't right now."
•Social networking. Flashy wheels don't mean as much to young adults in the digital age. More are keeping up with friends on Facebook, MySpace or via other online tools instead of driving over to visit them. Hollis says they take the attitude: "You don't need a car anymore because you have a computer."
•Choice. When Scion began, it didn't have much competition for small, cheap, urban commuter cars. BMW's Mini was still getting a foothold, and Smart hadn't yet come to the USA. Now, a raft of small, edgy vehicles are aiming for the same youth market — Ford's Fiesta subcompact, Kia's Soul crossover and others.
Scion can't even leverage its previous advantage of being more Web-savvy than the competition. "Every company is on Facebook," Peacock says. "It makes it more of a challenge to stay ahead."
Looking ahead
If Scion is going to stage a comeback, a redesigned tC is the place to start. The inexpensive sportster is Scion's biggest seller, making up about 40% of sales volume.
Priced starting at $18,275, the new 2011 tC has a bigger engine that pumps out 180 horsepower, 19 more than the 2010 model it replaces. Yet, it gets slightly better gas mileage.
But it's the styling changes that Scion executives tout most. The sporty model has more aggressive looks designed to appeal to young men. Walking around the car in a San Diego garage for a recent press preview, product planning manager Thomas Crahan pointed to the headlights, which he described as looking like "cunning eyes," and a side profile meant to emulate an auto racing helmet.
Crahan says Scion wanted the car to feel like "a middle-weight boxer in a Sean John suit," referring to the clothing line from taste-making entertainer Diddy. No wimps allowed. The new tC says, "I'm here. Get out of my way," Crahan says.
Next will come the iQ, a little car that wowed the 2009 New York International Auto Show when it was lowered from the ceiling in a blaze of music and lights. While appearing like the stubby Smart, it's actually larger, with a back seat that can fit at least one more adult.
Though Smart Fortwo sales now are dragging in the U.S., Crahan says the iQ will succeed because it performs better.
Market mania
Scion's vehicles will change, but one thing that hasn't is the marketing formula. The brand sponsors gallery openings for underground artists and helps plug up-and-coming pop music acts. It hypes its cars online, where buyers can design their own with lots of high-value options. The brand, Hollis says, has to remain "authentic."
That's a quality that seems to appeal to Scion owners gathered Saturday for "Scion Reconnect" at Cabe Toyota Scion in Long Beach, Calif., just the kind of ethnically mixed, youthful community that should make it the perfect target area for the brand.
Though the lot was crowded with tricked-out versions of the original xB, Shawna Enders, 21, of Bellflower, Calif., came in her new-generation 2009 xB. She says she loves it because the baby carrier fits perfectly in the back seat and her Great Dane, Bentley, goes in the rear. Plus, she says, "it looks great."
Others would beg to differ.
"The original xB is still the hottest car," said Nilo Miranda, 42, of Anaheim Hills, Calif. His is tricked out in an olive-drab vinyl wrap. "Scion is trying to get back to the original concept."
Miranda says he knows the brand is on the mend because he says he's gotten sneak peeks of some of the models on the way. And, he adds, they are edgy and cool.
Likewise, original xB owner Sixt is optimistic, as well. Though he misses the quirks that made the Scion tops for the cool factor, he says, "I think they are going to get it back with the new models."
This is partially why Scion is hurting:
Focus groups are usually filled with idiots. Toyota seems to be listening to A LOT of them.
