By David Undercoffler, Crain News Service
LOS ANGELES (Feb. 3, 2016) — Toyota Motor Corp. is pulling the plug on Scion, the funky upstart brand it launched in 2002 to appeal to the finicky younger buyers it was struggling to connect with on its own.
The reason, according to Toyota: It's no longer struggling to connect with those buyers.
The end will come quickly — and just months after the launch of two vehicles that were seen as critical to reviving the brand.
Scion-brand sales will end in August, the auto maker said, and its model lineup will be folded into the Toyota brand starting with the 2017 model year.
Scion, which sold more than a million small cars over 13 years, was an early hit with young buyers who perceived Toyota's offerings as reliable but utilitarian cars for their parents' generation. From its inception, the brand served as a laboratory for offbeat vehicle, marketing and retail experiments.
But in the aftermath of the global recession and Toyota's unintended-acceleration crisis, investment in the brand dried up and its product lineup thinned. Moreover, Toyota said, young people are different today and are less likely to try to stand apart from their parents.
As a result, the parent brand now commands more respect among today's younger customers than Scion does.
“Youth buyers are in a completely different position than they were 13 years ago,” Bob Carter, senior vice president of operations for Toyota Motor Sales told Automotive News. “That's really what's driving this decision.”
The decision to phase it out may cast it as a historical failure, but Toyota likely will walk away vindicated in its efforts to strengthen its own image among younger shoppers.
“I think when you have to unwind a brand and tell dealers it's over, I don't know how on some level you can't say that's a failure,” said Karl Brauer, senior analyst for Kelley Blue Book.
“But I think it'd be more accurate to call it a learning experience or an experiment that they learned from but in the end proved unsuccessful.”
Toyota is hoping the transition will be as seamless as it will be quick.
The current Scion iA, iM and FR-S cars will be badged as Toyotas for the 2017 model year when they arrive in dealerships this August. The tC coupe was already in line to be discontinued after the 2016 model year.
The Scion CH-R concept that debuted at the 2015 Los Angeles Auto Show will be sold as a Toyota when it hits the U.S. market in 2017. That model already was planned as a Toyota for the rest of the world, and the production version of the subcompact crossover will make its global debut at the Geneva Motor Show in March.
All warranty, financing and service elements will continue to be handled by Toyota, the automaker said. Scion's 1,004 dealerships — all of which are within existing Toyota stores — will continue to sell the vehicles as they have done in the past. Toyota said it would be contacting dealers today to notify them of its decision.
“There's absolutely no change to the consumer. Everything remains the same,” said Mr. Carter said. “We're simply changing the brand and the logos.”