We probably saw this one coming.
The story broke this week regarding the closing of Toyota's Scion brand by one of my colleagues. I held back some form of reaction until I received confirmation from Toyota Motor Sales USA.
That confirmation came in an e-mail from Toyota's communications team. It was not the kind of news I wanted to read or analyze. But, there are people in my industry that could say it was bound to happen.
Scion was a brand that had good intentions from the beginning. Toyota had a problem with engaging the youth market, but they needed the right products in doing so. Instead of selling them as Toyotas, they created a new brand. The idea of simplifying the car buying process with no-haggle pricing, special credit terms and specific support mechanisms through the service and parts departments was not exactly new. Yet, Scion wanted a specific demographic to enjoy these benefits.
The reality came on the showroom floor. Initial sales of the 2004 xA and xB went to older customers, not the younger buyer they were targeted. Older customers liked the idea of a small, well-equipped vehicle that had expansive space that was fun to drive. They, too, wanted to be different than anyone else. It was a reality that actually gave Scion its initial success.
It also helped to have the right personnel behind the brand. Jim Farley was a fast rising Toyota Motor Sales USA executive when he took on the task of being Scion's first General Manager. I met him during my first Media Days at the Chicago Auto Show in 2004. My job was to see whether the readership I had at the time would be welcomed at Scion and what they would do to engage with them at the showroom. Farley was great and gave me a good tour of the brand and its products.
I knew Scion was going to be something special for Toyota. Yet, the struggle to get the right customers through the door continued throughout its short history. Even with new product being introduced, the engagement levels Scion needed to survive was fluctuating. It seemed from the brand simply forgot who they were selling to for a while. Towards, they had something that engaged, but it translated at the showroom as "too little, too late."
Where did Scion go wrong? Was it that Jim Press, then head of Toyota Motor Sales USA was grooming Farley for his job, before the both of them ended up in Detroit? Was it the product mix? Was it the dealer network, where Scion's want of attention was overshadowed by a line of Camry, Corolla and RAV4 customers? Rather, was it the sales process itself that prevented customers from getting a better deal than across the street at another brand…or over on the Toyota side of the showroom floor?
Perhaps all of the above?
In regards to product, a lot of these products were already sold as Toyotas either in the Japanese home market or in key export locations. The xA was known as the ist, while the xB was originally the groundbreaking bB. The iQ was a global challenge as a Toyota and a Scion. The FR-S had some pressing problems before it arrived into our showrooms. One was the fact it was being sold as a Subaru worldwide, while succeeding as a Toyota outside of North America.
This last attempt at rebuilding the brand also had good intentions. The iA is simply the best car in its class. Toyota informed us that it was a Mazda built in Mexico for our market – specifically for the Scion brand in the USA. Did it prevent customers from buying them? Sales-wise, it has not garnered the favor of customers who ended up buying from other brands outside of Toyota.
The same problem exists with the iM. It is also a wonderful car. Yes, It is a Corolla hatchback that is very popular outside of North America, which Scion was banking to help it sell. Still, it would not even get ten percent of Corolla's monthly volume with the Scion badge.
In the end, Scion will cease operations as a brand at the end of the 2016 model year run. The tC hatchback coupe will come in a Final Edition to run out the line. For 2017, Toyota badges will replace Scion ones with the model names retained until further notice. I expect that will change after 2017.
However, I will bless this brand with my memories of it. Mostly, they have been based on this work – talking with Farley in 2004 at its beginnings, previewing the iA and iM in Grand Rapids on one of my media trips last year and engaging with a great group of local enthusiasts who were exactly what Scion had in mind for ownership.
Scion was a brand with good intentions by bringing young buyers into the showroom and delivering new vehicles through a no-haggle strategy. Toyota gave a it try. One would hope they would honor what Scion attempted to do by really backing their three latest models for 2017 with excellent marketing and better support. Think about it, Toyota now gains a compact hatchback, a very good subcompact sedan and a sports coupe.
Thank you, Scion, for making affordable automobiles interesting and fun.