Plenty of stories circulating last week about Scion's sales "hitting a wall." For the past 16 months sales have been down, despite more dealers and models than during the brand's initial U.S. launch.
Plenty of theories have been proffered to explain the sales slide. Some are suggesting the lag between the original models (xA and xB) and the new models (redesigned xB and all-new xD) are the cause, as the tC was the only Scion available for several months during the switchover. Others are saying the new models simply aren't as compelling -- too big and too American (how a car can be "too American" to succeed in America makes for an interesting argument...). Finally, it's clear the segment is simply more competitive than it was three years ago. The Honda Fit, Nissan Versa and Saturn Astra are just three examples of sub-$20,000 cars that didn't exist in the U.S. market when Scion launched.
These are all reasonable suggestions, but there's another factor to consider.
For lack of better term, I'll call it the "fickleness of youth." I'm reminded of a toy representative I spoke with back in the late 1990s, after the import tuner scene had taken off. I assumed the tuner scene had opened up an entirely new line of products, and I asked him if it was true.
This gentleman related the challenge of selling Civis, Eclipses and Integras versus selling Camaros, Chargers and Mustangs. According to him, if his company produced a 1:18 scale 1969 Camaro there was a certain, baseline number of models they knew would sale. But producing a toy Subaru Impreza STI was like spinning the roulette wheel. It had the potential to pay off big time, but it had an even greater chance of coming up double 00.
His explanation? "We never know what will resonate with the youth crowd. One week an S2000 will pull sales numbers we could only dream about, the next week that same model has the draw of nuclear waste. The target market is constantly changing its mind about what is 'cool.' Add in the requisite lag time between when we decide to produce a toy model and when it hits store shelves and it's a complete crap shoot."
It may be too simple minded to assume the same situation exists with real cars, but I remember when Scion first entered the market and it seemed the brand's draw was based as much (or more) on its "new, different, cool" mojo as on the specific quality or value it offered. Now the cars are far more "American" and, let's face it, far less "new and different." Today Scion has to stand or fall purely on how it lines up against the competition.
But the bigger question involves the time/expense of creating entirely new brands. If my friend from the toy company is correct, and the youth market's idea of "what's cool" can turn on a dime, than perhaps creating entirely new brands to capture this buyer demographic isn't a good use of corporate resources. Better to go after the youth market with unique models versus creating all new brand logistics (and costs) for a division that can be "out" only a few years after it was considered "in."
By guy1974
on March 10, 2008
07:13 AM
Sounds a reasonable theory - sounds like Toyota made a strategic and potentially costly error. How un-Toyota like!
By estreka
on March 10, 2008
07:30 AM
The xB appealed to a lot of people because it was distinct. To say boxiness was in would be inappropriate. Yes, the xB took a few Element sales, but the xB sold well because it wasn't 'run of the mill'. Personally, I thought the tC looked fantastic and I knew it was going to be a strong seller, which it was.
The problem with Scion, and most car companies, is that they try to make their products 'grow up' and attract new markets. The WRX is the epitome of this process. Now, I'm a guy that states he prefers function over form, but when form is completely thrown out the window, I'm going to shop elsewhere. When niche vehicles lose their defining character, they lose their 'niche status' and the loyal customers along with it.
By opfreak
on March 10, 2008
08:11 AM
except in the case of the new imperza's, their selling better the the ones last year.
But when as a company part of the goal is to be edgy and stand out, to go the other way is a death trap.
By bepperb
on March 10, 2008
08:24 AM
I couldn't agree with estreka more. The Xa/Xb were unique. That made people feel better about buying a $15,000 car. It gave them something to talk about... something special. It is not so true today, even Toyota has the Yaris hatchback competing with the Xd. The looks of the Xb are not as distinct, it's value not as great as the old model. More was not better.
To appeal to a generation taught to be "special" will require more than formulaic application of research from focus groups, that always ends in unacceptable compromise, and seems to be the case here.
By iskch
on March 10, 2008
08:54 AM
Karl, my wife owns a Scion XA and she loves that little car and we are not the typical youth crowd. Three ladies that go to church bought Scion XA's to drive around the city and to take the kids to different places. Myself, I love my wife's Scion XA. I know the car has a few things I don't like but is good to drive around.
The youth movement is something difficult to target. Scion hit a bulls eye with the first generation with "practical cars" but when they try to answer the request of the "OLDER FOLKS" they shoot themselves in the foot.
The new XB is plain ugly. Looks the same as a Chevrolet HHR. The new XD I hate the front (Camry nose) and rear (bland). No more sexy back ! (a la Renault 5 turbo). The new XD has more power (no problem hitting 90 w/4 adults) and a few items are already included like cruise control when it used to be extra.
The TC never caught my attention. Now if Nissan saw what happened with Scion they are going to try to target that same crowd with the Cube.
By opfreak
on March 10, 2008
09:03 AM
^woot another xa family member, my finace bought her xa last year.
The xd is a bit more comfy, and alot bigger, but its not what the xa was... a small affordable car, that works good. Heck it started somewhere around 12.5k, the xd is somewhere around 15, or about 2.5k more. While not a 'big' difference, its still 20% more.
And the xa looked different the then xa and tc back then, now the xd is a smaller version of the xb.
By blackadder5639
on March 10, 2008
09:10 AM
I agree fully with estraka and bepperb. I haven't seen the new xD "in person" yet but from the the photos it just looks too generic.....it's lost the coolness the original box had. I also think Toyota shot themselves in the foot by using the Camry 2.4L engine.......I believe they should have used the Corolla's 1.8L engine instead! That engine would still have offered more power while still remaining very economical.
The xB is ugly.
Opfreak has a point with the Impreza/WRX/STI, but I'd say that car has a much higher price point and people who spend between $25k and $40k on a car are those who tend to value conformity and comfort.
By cowbell
on March 10, 2008
09:25 AM
Karl, as a 28-year-old, I think you nailed it. My idea for why Scion is possibly floundering matches pretty well with yours.
People my age are, like you said, fickle about what is "cool". What is "cool" changes quickly, and for usually no logical reason. With 5-year development times, it would be nearly impossible for a car company to keep the product in high demand if its appeal was based completely on its cool factor.
Some companies that have succeeded pretty well in keeping the youth crowds interested are Apple and Volkswagon. Apple does it by brining out new products annually, and also by having the big, stodgy corporation (microsoft) to play off of.
As for Volkswagon, I think they have succeeded with the youth market for two reasons. One is that they don't try too hard. Scion is trying SO PAINFULLY HARD to be hip, and I know it's rubbed me the wrong way, as I'm sure it's started to annoy other people my age. The other reason Volkswagon is able to keep it's young image is that older people tend to know better than to buy a VW if they don't want to be in the shop to often. If someone's first VW is their last VW, it keeps the average age down. :) (Only partially joking with that last point)
By roar02ram
on March 10, 2008
09:35 AM
I think you nailed it, too, Karl. Do you think that Scion should've expanded in the interm? I think if Toyota had given Scion a roughly Jetta-sized sedan from Europe in the past year or two, and then the Venza in the fall, maybe they'd be doing better (expand their base). What do you think?
By chevy598
on March 10, 2008
10:01 AM
Toyota scion division was trying to be GM of yester year. Drive a Scion when you are young, and then move on to a Toyota or Lexus later in life. That's a failed buisness model.
I've got two cousins that are both nearing 30, and neither one bought the same brand for their second car purchase. People Want something different when their dropping down $20k+ every 5 years.
Iskch and his wife are part of the reason why Scion is loosing buisness. When you see as many older people driving Scions as young people it's cool factor drops to zero.
By jstandefer
on March 10, 2008
10:06 AM
My better half also has an xA. Did we get it because it was "cool"? No. We were actually looking at a Yaris as a commuter. We wanted the hatchback because of its versatility, but we also wanted four doors, and some creature comforts that couldn't be had with the Yaris. The salesman directed us over to their last '06 xA, a Series Release 3.0 model. It had nearly the same fuel mileage as the Yaris (it was going to be a commuter... 100 miles/day), had four doors, a hatchback, and the creature comforts we were looking for. We did the calculations and found that the xA would pay for itself by using it to make that commute instead of the S60 R. Nearly double the fuel economy, regular gas, and significantly cheaper maintenance and tires (replacing one tire on the S60 R was equal to two monthly payments on the Scion).
While we were there, we also looked at the new xB and xD. They completely turned us off because of their fuel mileage (too little) and styling (too, um, wierd). I think the xA and original xB sold well because they had large interiors with small exteriors, achieved excellent fuel economy, styling that was radically different than the norm, and excellent prices. The new xB and xD became bland, lost their fuel economy, and climbed up in price. I think Toyota forgot that Scion was supposed to be their youth brand, and Toyota-ized the cars, making them less affordable and less economical... two traits very important to their target audience; an audience that typically doesn't have an abundance of cash.
If we were in the market for the same type of vehicle today, Scion would not even be on our radar. No way. No how. We would probably have a Honda Fit, which is kind of like the original xB and xA combined into the same car. And if we were looking for a car that the traits of the new xB and xD fit, we wouldn't hesitate to run immediately to a Mazda dealership and buy a Mazda3 hatchback.
By norcalplanner
on March 10, 2008
10:20 AM
Karl,
I think that the niche market Scion carved out for itself was small to begin with, and isn't increasing in any appreciable way. The small cheap funky car market now has plenty of competitors at various price points, and additional competition from gently used cars (which seem to be getting more reliable all the time) available for the same price as new Scions would seem to pose trouble for the brand. Add in the fact that econoboxes are generally low-profit endeavors for the manufacturer, and I see a world 10 years from now where Scion has gone the way of Plymouth.
By 1487
on March 10, 2008
10:46 AM
lets not forget that Scion's are mediocre vehicles that were praised the press and initially adopted by buyers due to being part of Toyota and cool marketing. The cars arent anything special and the novelty has worn off.
By aspade
on March 10, 2008
11:28 AM
The elephant in the room is the economy.
25 year olds with fat student loans frankly shouldn't be shopping new cars in the first place. In 03-06, anyone with a pulse could get all the low rate credit they wanted. That was a once in a lifetime aberration, and it's over and done. The broke young person demographic is no longer in the market for new cars no matter how good (or bad) they are.
By clace
on March 10, 2008
11:41 AM
I'm 25, and of an urban inner city demographic that they weren't targeting but... nobody I know ever thought that the scion's were cool. The Xa was "what", the XB was a bread box with wheels, and the tc was feminine. Add the blistering acceleration abilities that they had and they didn't make me or any of my freinds take notice. Is there proof that any younger people bought these at all?
By texases
on March 10, 2008
01:17 PM
Some of all the above
1-Competition is 10X more than it was at Scion's start
2-Fickle market, regardless of the car's quality
3-Move to bigger/blander turned off faithful
4-My addition - poor marketing/product planning on the new ones - have you looked at the available colors? All quite bland, nothing eye catching, nothing you'd see on the street and notice. Not that I'd buy one, but someone would, and it would be good advertising.
By bepperb
on March 10, 2008
02:00 PM
I think when Scion started out, it was entry level high-value cars. The "youth oriented" ness was purely marketing, and perhaps an afterthought. I wish that the company would go back to that focus... instead of chasing their target market. The Mazda 5 is a perfect example of a unique vehicle focused on value that could have been produced instead of the new Xb. If instead of following a marketing plan... find value nitches.
By editor_karl
on March 10, 2008
02:37 PM
VERY good point aspade. The economy element had occurred to me, but I forgot about the "No Credit for Young Men" world we've entered recently. Probably had as big of an effect on Scion sales as these other points.
By mnorm1
on March 10, 2008
02:49 PM
Anyone else think the grill looks very Mitsu. Lancer-ish?
By vbhoo
on March 10, 2008
02:56 PM
As someone in the target demographic, I can say that people my age are more apt to buy a used BMW than a new Japanese economy car. The gen-x crowd grew up wanting civics, celicas, ect, but we grew up wanting GTI's, M3's, Audis, and basically anything European. That is what was "cool" in the 1997-2003 period when we began to drive and think about cars. The concept of democratization of luxury goods is a huge issue that the automakers haven't really seen before. We're the children of aging yuppies, not a hippies (at least the ones with any sort of purchasing power). The automakers have to compete with apple, dell, ect for the dollars of those who 20 years ago would have bought a car a their big ticket purchase. Scion has this to contend with, as well being a "hip toyota," which is like trying to be a hip Oldsmobile in the late 1970's. I personally have only seen a Scion being driven by older people, but isn't Saturn supposed to be a youth brand as well?
By moparbad
on March 10, 2008
05:43 PM
How can a car be "too American" for America? We may be about to find out when the new Mazda6 is introduced. Also, VW is said to be "Americanizing" their product plan.
What reason is their to buy a Japanese or German or British car when they are homegenized to remove their character?
Anyone know what a Corolla Rumion is? It is the current xB, and a Corolla is not youthful or "in".
At list the IST is an improvement of the xA.
My advice to Toyota would be to use Scion as the channel for Japanese manufactured and designed models that would not otherwise be sold in North America, and don't remove the "Japanese-ness" when they federalize them.
And please, get rid of the Yaris or get serious about improving it and bring your A game.
By blackadder5639
on March 10, 2008
07:53 PM
"As someone in the target demographic, I can say that people my age are more apt to buy a used BMW than a new Japanese economy car. The gen-x crowd grew up wanting civics, celicas, ect, but we grew up wanting GTI's, M3's, Audis, and basically anything European. That is what was "cool" in the 1997-2003 period when we began to drive and think about cars. "
Vbhoo, true to a large extent! But I'd say that while those who'd opt for a used BMW are many within this demographic are plenty, the majority still buy new or used Japanese cars. (I would guess 60% or more buy Hondas and Toyotas.) In fact, of all my friends (younger than age 30) who have recently bought new cars, only six have bought a luxury/premium cars: GTI, Volvo S60, Acura TSX, Acura MDX, and two Intfiniti G35 coupes. The remainder, by far the majority, have bought Hondas or Toyotas.
I have noticed that Americans in general, while they may fantasize about German cars, usually have a sort of reality-check when it's time to buy and buy Japanese or American cars.
I cannot say the same for my South African friends: all of them are driving Audis, Mercedes, BMWs, GTIs and Minis. (Recently, one of them asked me for car advice.....I recommended a Civic or Mazda 3 since he said he didn't have a lot of money. Guess what he got: A3!)
Personally, as much as I love BMW and other German cars, at this point in my life I just don't see them as worth the money. I'd rather buy a new $25k Mazda 3 or 6 than buy a used 3-series with that money.....when I'm rich enough to spend $40k plus on a new car, the 335i would be my choice.
By opfreak
on March 10, 2008
08:14 PM
i'm with black, the 25-30 year old hot shot out of school that wants to end up defaulting on the loan 3 years from now, will be driving the BMW.
the responsible people will price out a bmw, look at used ones. sleep out it, and come to the conclusion that what we NEED, is not a 30k-40k lux toy. But good, dependable transporation, thats AFFORDABLE, and we'll go back to the bread and butter, after dearming of fantasy land.
By technetium99
on March 11, 2008
05:32 AM
Since when did "Skee-ons" ever appeal to young people outside of So-Cal? I have seen maybe 4 xAs on the road, ever. There are lots of xBs, but I have never seen a young person driving one. The appeal of the xB was utility and gas mileage. The new one has neither. It should come as no surprise that Toyota still doesn't get it. The first generation of Scions were a success IN SPITE of how they were marketed, not because of it. Toyota knows how to make automotive appliances that appeal to the great unwashed masses, but they don't know cool.
By bbechtel16
on March 11, 2008
07:51 AM
"the responsible people will price out a bmw, look at used ones. sleep out it, and come to the conclusion that what we NEED, is not a 30k-40k lux toy. But good, dependable transporation, thats AFFORDABLE, and we'll go back to the bread and butter, after dearming of fantasy land."
This is a scenario that plays in my head all the time. (I'm 22 and finagled my way into full time professional employment in IT with minimal post-secondary education, and have managed to move from "the slums" to decency rather quickly.) Except my reality check tells me to keep driving the Sentra with 196k on the clock. I'm going for a quarter million! I would like to replace it with a 128i 5-door, if BMW USA will allow such a thing, but I might have to talk myself into the coupe instead.
I've had some older people tell me to get the toys while I still can (you know, before you're married and "it's all over"). But to be honest most of them tell me to restrain myself. But those weren't car guys either...what do they know?! :-)
edit: Regarding the actual subject...the only Scion we ever thought was truly "cool" [looking] was the tc. As mentioned though, it is very much a chick car. Too slow to consider over the RSX or similar, and not enough fuel economy to distract you from something more sensible. A friend of mine purchasing an Element has warmed me up to the whole box-on-wheels concept. That along with time has warmed me somewhat to the original xb design, so I am disappointed to see it rounded off. The xa is truly the ugly retard of the bunch. I could never own such a vehicle.
By mnorm1
on March 11, 2008
08:49 AM
"Except my reality check..."
My reality check shows up every Friday.
By genius163
on March 11, 2008
09:56 AM
Makes sense to me. I just bought a 2008 Scion xD (I posted about it on the Driving Woman blog here) and I am 33 years old. Once someone my age thinks something is cool, it is well past the cool stage with younger people.
-Michelle
By bbechtel16
on March 11, 2008
10:42 AM
"My reality check shows up every Friday."
Bummer man. I only have to see my reality check every other week!
By andrew717
on March 11, 2008
11:13 AM
I hear ya Bechtel. My fiance doesn't understand why I would possibly want anything other than a used 4-banger Camry, unless maybe I wanted a Corolla. In vain do i point out GTIs or Cooper S. Hell, in vain do I point at non-Si Civics or Rabbits with a manual. Shoulda got the car and then the ring, rather than vice versa. You live and you learn, eh?
So there is something to selling souless, wretched driiving appliances to people who don't like cars. It's what made Toyota what they are today.
By 1487
on March 11, 2008
11:18 AM
Toyota's marketing scheme and reality are not connected. I havent noticed Scion drivers being all that young and like Clace said no one I know thinks they are that cool. I know one person that owned one and that was likely because it was one of the cheapest new cars on the market. Scions are not great cars and never have been. They were different, they were cheap, they were efficient, etc. Toyota didnt have a long term game plan for success and now they have been exposed. Scion sales SHOULD be booming due to gas prices but they arent because the folks that wanted them already have them and few young people actually aspire to own them. furthermore, Scion makes no performance models with is beyond stupid for a brand that wants to appeal to young folks.
By cruiserhead1
on March 11, 2008
12:06 PM
Karl,
It's very simple. The original Scion xB was cool. It was so different and had a "JDM" flavor. Everyone knew they were already modding xB's in Japan. It was cheap, it was 'exotic' and it was practical.
The new xB looks like a Toyota warmed over design. It isn't a box, it isn't round.. it's "meh". Designed by committee and apparently so.
The big thing Scion missed was that what made them popular was sheer entertainment value. If they are coming out with a new xB, it's gotta be MORE square, MORE crazy... something that made you look and go, "Whoa!" or at least, "WTF?"
The new xB is a yawn, plain and simple. You can't build a brand based on "cool" and then give them a Camry.
I don't understand Toyota. They have a "toyota" brand to sell the mundane Corolla, etc. They have Lexus to sell the bling. They have Scion to sell... more mundane Corollas?
No, they need to be taking risks with Scion. TC is a boring styling exercise, imo. I think it got the xB overflow enthusiasm for the brand- but there is nothing cool at Scion anymore.
By classicjetta
on March 11, 2008
03:07 PM
Scion has yet to produce a product that is competitive. You can't sell a car to a large audience based solely on its "aura" if you will. Let's face it, the xA and xB are wretched products based on the uninspiring Echo platform, and the tC is merely average in every way. Scions are really like the toy cars that Karl mentioned. They're flashy looking and seemingly fun, but they have no substance behind them. As a 24 year old male, I can tell you that the thought of buying one when I was in the market a while back never crossed my mind. I wanted a real car, so I bought a MkV Jetta.
By yankeez
on March 11, 2008
05:44 PM
This shouldn't be much of a surprise to anyone - they made an ugly car even uglier. It's as simple as that. Not exactly rocket science, folks.
By autoboy16
on March 15, 2008
05:43 AM
I'm with classic jetta. I want a jetta MKV sooo much!!!
In 2006, I was addicted to the tC! Then I saw the jetta. I thought: For $20k why would I get a 4AT hatch thats heavy, average looking with cloth seats and not so fun to drive? Sure the sunroof and reclining rear seats are nice...
But the jetta is just better! Cooled glovebox and armrest (Great since I always leave a bottle water in my car cold and come back and its on the verge of evaporating), a bigger trunk, leatherette (or real leather both with heated front seats; even the cloth!!), 6AT, and that uber sexy 5cyl sound!!!!
Give me hella headlights and euro taillightsand I will be at the jetta faster than people on the autobahn! Did i mention the great VW key fob vs that decade old scion one, nighttime amient lighting, and that super soild German(though built in mexico) drive? ARE YOU CRAZY!!
Almost forgot, those "S(afe) happens" commericals are more attractive than those customizing commercials that have been out since scions intro... MKV/A5 all the way!
~JETTA~JETTA~
-Cj
By bbechtel16
on March 17, 2008
12:49 PM
That 5 cylinder is a piece of junk. They should make some sort of a detuned 2.0T to replace it.
By moparbad
on March 21, 2008
10:06 AM
Scion is now too American for America.
The xB was popular because it was different.
Scion must not dilute and remove the Japanese from Japan cars.
Just as Lexus is too Japanase for Japan ...
http://www.businessweek.com/magazine/content/08_13/b4077072420049.htm?chan=top+news_top+news+index_global+business
...Scion is too American for America.