Heres an article from edmund's inside line about the future for scion:

http://www.edmunds.com/insideline/do...hotopanel..2.*







130,000 Sales = Cult Car?
By Jim Henry, Contributor Email


Date posted: 05-21-2008


In the beginning the music pumped from giant subwoofers, cans of spray paint clattered and hissed and hyper-sexed kids crowded closer. Stodgy old Toyota had introduced a car that seemed to be more art than transportation, a radical statement of cool simplicity, anti-consumerism and plain old American cheapness. You know — Scion.

You remember Scion, don't you? That initial exhilarating burst of discovery, as if a car had been designed expressly for anyone who had ever been to Hot Import Nights. Those first Scion-sponsored owner gatherings, the wildly modified concept cars and the row of sales tents by aftermarket manufacturers.

Then Scion became a success. Every Toyota dealer wanted a Scion outlet. Scion sales climbed from 10,898 cars for a few months in 2003 to 99,259 in 2004. By 2006 the total had reached 173,034.

Yet there's a sense that the party is over. The lights at Hot Import Nights have gone dark and there's the nagging suspicion that this whole party might have simply been the ultimate branding exercise, low-rent goods dressed up in snappy T-shirts.

Is this it for Scion's 15 minutes of fame?

Definitive Demographics
Who buys a Scion? Is it the young hipsters it was designed to attract, or gray-haired baby boomers?

The answer is both, depending on which Scion model. A single model, the tC coupe, is mostly responsible for Scion's young buyer demographics, on average the youngest in the auto industry. The boxy Scion xB model is also younger than the industry average, but not as young as the tC.

Overall, the median age of the Scion driver is 30, the youngest in the industry. And 72 percent of Scion drivers are new to Toyota.

These demographics are a central reason Toyota Motor Sales U.S.A., Inc. launched Scion in 2003, hoping to offset the graying of the mainstream Toyota brand and the upscale Lexus division.

The problem for Scion isn't whether the right people are buying Scions; it's that fewer people are.

Missing a Rising Tide
Scion sales fell almost 25 percent last year, from 173,034 in 2006 to 130,181 in 2007. Meanwhile, Scion's overall competitive segment, which also includes cars as diverse as the Mini Cooper and the Nissan Versa, gained 3.5 percent to almost 300,000 vehicles in 2007, according to AutoData Corporation, in Woodcliff Lake, New Jersey.

Dawn Ahmed, Scion corporate manager, blames most of the drop on the fact that 2007 was a rebuilding year for Scion. With only a three-model lineup, Scion was technically without 2007 models of the xB and xA. It didn't introduce the new, second-generation xB until May 2007, and the xA gave way to the xD in August 2007.

In the interim, Scion offered the tC and leftover examples of the xB and the xA. The company says it planned this transition in order to sell down the previous-generation models. Yet this ploy seems to suggest awfully weak demand, considering 2007 was a bull market for small, affordable, fuel-efficient cars.

Tough Sales in Tough Times
In the first quarter of 2008, total Scion sales fell more slowly but were still behind the same quarter in 2007. At the same time, the competitive segment gained even more. Scion sales 39,146 in the first quarter, while AutoData's "small specialty" segment gained 10 percent.

As data from Edmunds.com shows, when Scions were hot in 2005 and 2006, they spent fewer than 20 days on dealer lots between delivery and sale, but the interval stretched to about 40 days in 2007 and the overall economic slowdown in 2008 produced a 57-day turnover in April.

The new xB and xD are outselling the lame-duck models they replaced, but they haven't been enough to offset a continuing drop in tC sales. And it could be another year before Scion gives its stylish coupe (originally conceived by Toyota as a Celica replacement with a cheaper price) a worthwhile makeover.

Meanwhile, Scion showed the xB-based Hako Concept car at the New York International Auto Show in March 2008, perhaps anticipating an additional two-door model in the boxy style that made the first-generation xB successful.

Stealth Brand
"We're hoping it will recover," says Marty Collins, Western region vice president for Houston-based Group 1 Automotive, one of the nation's biggest publicly traded dealer chains. His territory, based in Van Nuys, California, includes three Scion franchises.

Collins says Scion had so many unsold cars in 2007 that Toyota gave dealers a break by holding cars at its port facilities, so as not to burden dealers with too much inventory. Because dealerships borrow money to finance their inventory, it's expensive for them to have unsold cars sitting on their lots.

Collins also says dealers have given Toyota an earful, asking for more spending on Scion advertising and marketing, but he says Toyota is sticking to its strategy to purposely keep Scion small. "Toyota has been very clear they are not going to devote a lot to it," Collins notes. "The plan was always for it to be 100,000-150,000; it was never going to be a half million.

"There's no doubt, it's a unique business model," Collins concludes.

Toyota Motor Sales U.S.A., Inc. launched Scion in June of 2003 with a slow rollout of vehicles to build anticipation, a highly unusual strategy. Sales began exclusively in California, with only two models, the xA and the xB. By February 2004, Scion had been introduced in only 25 states. Scion's eventual nationwide rollout in July 2004 coincided with the introduction of the tC. From the beginning the company has avoided expensive, mass-market advertising in favor of Internet ads and promotions and a network of owner clubs, an effort to build credibility by generating word-of-mouth buzz.

Bells and Whistles
The ability to customize the cars has been another centerpiece of the Scion brand strategy, which got a lot of hype when Scion was launched. This aspect of the Scion brand also appears to be a success, at least in terms of buzz. It's hard to come by figures on how widespread customization is, but there's no denying there are enthusiastic owners.

Scion owners spend an average of $1,000 on accessories that are installed either by Toyota at the port of entry for the cars or at Scion dealerships, says Allison Takahashi, a Scion spokeswoman. Scion offers almost no factory-installed options. "Many customers heavily accessorize their vehicles using aftermarket shops. We have no figures for the number of people who do this," she says.

At the Mini brand, which has a higher price point for its cars to begin with, owners spend an average of $5,000 on optional equipment and/or dealer-installed accessories, says Mini spokesman Andrew Cutler. Mini has a more extensive menu of factory and dealer-installed accessories, while Scion owners must rely on the aftermarket for anything beyond the basics.

Positive Buzz
Rob Winterkorn is a Scion enthusiast, president of an owner group called Scikotics as well as another group called Scion Evolution. Both Scion clubs have Web sites and blogs.

Winterkorn, who owns three xBs and is considering a fourth one, said it was a "no-brainer" to buy his first Scion. "Let's see, this car is a Toyota, it's $14,000 and it gets 30 mpg. Let's buy it!" he says.

Winterkorn, 43, said he's generally happy with Scion's practice of inviting owners to events and car shows, often including free tickets and a free hospitality area. He is concerned that Scion takes its over-40 owners for granted and courts 20-something owners and prospects extra hard when it hands out invitations to events.

He would also like to see more dealers installing high-performance options. "If somebody wants a 300-horsepower Scion, they should help them do that," Winterkorn says. Scion dealers offer a factory-authorized supercharger kit, but most other options are strictly for appearance only.

Tougher (In-House) Competition
Besides the timeout while the company reloaded with the xB and the new xD, Scion is suffering from a higher level of competition that didn't exist when it was launched. "There are a lot of other choices right now," says Scion's Ahmed.

Inspired by Scion's success, a number of basic, entry-level cars have entered the marketplace over the past year. The Honda Fit has become a sensation, and its success has led Honda to double up the number of cars being imported into the country to 70,000. The Smart car from Mercedes-Benz has attracted lots of attention this year, while even the tired old Ford Focus has generated lots of sales thanks to its cheap price and sophisticated Sync audio system. Moreover, Toyota has several models in the same segment, including the refreshed Corolla and Matrix as well as the Scion-style Yaris.

"Toyota overall has done really well with Corolla, Matrix and Tacoma, and a lot of younger buyers are buying those products. For Gen X — and Gen Y behind them — we knew we needed to do something unique to attract those buyers," Ahmed says.

"The people who choose Scion choose our brand because the products have distinctive styling, and because they want to be a part of the brand," she says.

Qualified Success
As Toyota has told us from the beginning, the Scion brand is a low-risk, low-cost experiment to see what flies with young buyers. From this point of view, the brand has done what it set out to do.

The open question is what Toyota does next. If Scion is going to continue as a separate brand, it needs more product, and soon. "We're hoping to add to our lineup; it's something we've been talking about for quite some time. We're exploring how much, how many, body styles, everything. But we don't have anything to announce," Ahmed says.

Because Toyota is involved, there are plenty of pundits willing to second-guess the company's Scion strategy. Younger buyers with an alternative mindset want a simple vehicle like the first xB. Older, practical buyers like the larger second-generation xB. Enthusiasts like the glossy style of the tC, although such coupes go in and out of fashion very quickly. And there are plenty of clueless traditionalists who want Scion to be anything but different, and resent the cheap, boxy ethic.

It might all be a matter of timing. Toyota launched the Prius hybrid for the U.S. in 2000 in a similar low-key way, and it was rarely seen outside California. But then when the second-generation Prius arrived in 2004, there was more buzz about hybrids, not to mention lots of people who wanted them just for access to the carpool lanes on the freeway. And now there's some discussion that Prius might be a brand onto itself.

Maybe you can see the same evolution in Scion, with the slow rollout, the sales surge and the inevitable return to a steady volume. When you consider the volume of 130,000 cars, Scion certainly has something going for it that no other small-car nameplate does.

The only challenge lies in keeping the self-styled experts from plundering Scion for a quick sales success and then ruining its chances for long-term success. And this is an issue both within the automotive industry and within Scion itself. Now that cheap, basic cars are suddenly fashionable, Scion might be in the right place at the right time, just as Prius was in 2004.

The question is, can Scion capitalize on its good fortune? So far, Scion is still only an idea and a process — not a car. It's only a cult car because Toyota says it is.

 

Hmm...Every company has it's ups and downs especially with our economical situation in the U.S. Some newspapers/websites just like to over-exaggerate it more for the sake of a good story.

 

summary, anyone?

 

i like this quote from the article:

"
He would also like to see more dealers installing high-performance options. "If somebody wants a 300-horsepower Scion, they should help them do that," Winterkorn says. Scion dealers offer a factory-authorized supercharger kit, but most other options are strictly for appearance only."

"...they should help them do that." >yes they should!

 

umm here to scion making a new tC or to replace tC if it just as good that is and not a box

and "Younger buyers with an alternative mindset want a simple vehicle like the first xB"

 

That article is a waste of space. It is a car, a ton of people like it. some people dont.. they will come out with new models.. or not. Who really cares ? I have one, and I like it Too many writers like to see thier own articles and think they have to over analyze everything IMO.

 

Scion is not going anywhere, its here to stay, allot of us will trade in our old Scion for a new eventually, I plan on getting a second Scion soon, I love the brand and what it stands for. Like someone above said, all car manufactures have their ups and downs, its a different market now form when Scion first started, so its really not fair to compare, thats my .02.........

 

this guy just wants to turn heads scion isnt going anywhere

 

YEP

 

Scion is doing fine, the fact that they are releasing new concept cars is definitely a good thing

 

I love how every naysayer out there never realizes that Toyota capped the production of Scions this year, PLUS, there were no '07 xA and xB models. Once the run of '06 xA's and xB's ran out in the 3rd/4th quarter of '07, that was it until summer of '08 when the new xB and xD were released. The tC was the sole carrier for Scion sales for a good 6 months.

Honestly, let the idiots talk. Scion isn't going anywhere for a while.

 

time for tc to get a face lift,

so many tc's on the road that its probably now negatively affecting sales.
tc's are nice cars but than if you see the same car on the road 20 times a day, you'll consider into other alternative cars.

its time that the tc goes over an aesthetic overhaul, not minor tweaks.

 

^^^ I don't think Toyota is terribly concerned at this point. The tC has sold somewhere in the neighborhood of 300,000 units so far... and Toyota sells that many Camrys every single year. I think they're quite content to keep Scion as the "boutique" brand.

So the tC is nowhere near glutting the compact market. Pretty much every other brand puts more cars in the same segment on the street every year.

 

This article misses a HUGE point.
Most people purchase a car for say the 4 years it takes to pay it off. SCION IS NEW. If people love Scion so much and want to continue purchasing them, of course 4-5 years after its initial introduction it will have a drop in sales, the potential repeat buyers need to use the car before they buy another.



Its like having a cell phone business. You sell 100 to all 100 of your friends the first day of your business. yeah tomorrow you wont sell anymore. but a year down the road when they want a new cellphone or they break theirs, they will be back.
Edmunds is looking at short term sales, they need to look at the long term of it all.

 

well there is one thing to consider,

the tc caters to a different age group than the camry's do.
i.e. a lot of high school and college students are targeted for the tc, these are the ones that want more individuality and focused on hip/trend factors more than the camry crowd which are more along the lines of 30's+ age group, which care less about individuality and more about practicality.

 

I think it's funny that they wrote this article during gas crisis and yet Scion's numbers increase by 41%???

Did you guys know? Anyone with tC...can have better gas mileage than the Smart????? Reason why I'm saying that is, there was front page article in my city's newspaper about this couple who own one. They admitted out loud, they only get 30 MPG. I get 31 (city & highway) highway I get 33, all city I get 29.

If you're bored one early, early morning. Try this. Drive your tC 5 under each speed limit with somewhat heavy foot at stop lights and signs. I did; I got 370-ish miles on one tank! I drove about half tank.

-----------------------------------
By the way, I also read & post the forums on edmunds.com. I have won arguments with people about our Scions. I actually stated what I just said about the Smart and my tC's numbers. It's amazing how people who own Smarts or driven one took it to their heart. I posted this "I'm sorry but I'm not going to drive something that is 1,500 pounds that is sharing roads mostly with SUVs. My work forklift batteries are heavier than that. So I'm not going to drive something that light with no safety acceleration power." The rest of the people were like "Yeah I agree with her all the way!"

 

Scion has been great for Toyota and has quickly established a formidable base in the key 18 - 35 male/female demographic. I don't think they put a huge amount of money into the brand but they don't need to - the marketing strategy campaign for Scion is huge within that demographic and not just at 'HIN but MTV, concerts, music fests, etc.

Toyota is not gonna jeopardize a brand which I feel they look at as a good feeder program to eventually pull towards the toyota and lexus lines.

 

I woul think as soon as the tC gets a makeover or replaced the sales of the new car will be very high..........

If they release the Hako it also would do well.........as it is differant and actually looks pretty good.

Scion should also look into that Truck idea that was going around..........it would sell a lot .

 

If only this was true, and not "minor unnoticeable tweaks"

 

that was such a boring article. scion isn't going anywhere! i saw some really nice concept car pictures at SU. they were really hott, way better than the hako and fuse.