Toyota's Scion: A Siren to Young Buyers?
By Larry Armstrong
Toyota Motor (TM ), which now has the oldest customer base of any Japanese manufacturer in the U.S., has been struggling for years to figure out a way to appeal to a younger generation of car buyers. Its latest strategy: a family of highly styled cars aimed at youthful buyers under another brand name. It was all set to unveil that name and a few concept cars that illustrate the strategy at the New York Auto Show in late March. But on Feb. 28, the name leaked out: Scion.
Scion? I have to agree with Joseph H. Langley of AutoHorizon, the Massapequa Park (N.Y.) auto consultant who unearthed Toyota's plans at the U.S. Patent & Trademark Office: "An heir, a descendant? Seems like an odd choice to me."
Sure, it sounds like it came right out of some Sony Playstation shoot-'em-up space game. But, first, there's the matter of pronunciation. Is it SI-on, or SKY-on? If it's SI-on, as I suspect, then there's the matter of connotation. To me, a scion is a wealthy heir, a wealthy male heir at that. Ford Motor CEO Bill Ford comes to mind. Or Akio Toyoda (grandson of Toyota Motors' founder Kiichiro Toyoda) who built the company's Gazoo.com into one of the most popular Web sites in Japan.
No self-respecting, spikey-haired, multiply-pierced Gen-Y'er or Millennial I know is ever going to admit to the privileged upbringing that Scion implies. Come to think of it, Gazoo would have been a better name if Toyota wanted to express the exuberance and irreverence of today's youth.
A first look at the new marque's logo
Toyota got into this predicament because of its success with the baby-boomer generation. The children of the '60s and '70s loved their first Celicas and Corollas. They were durable, fuel-efficient -- and so very unlike the American freeway cruisers that their parents drove. As these customers grew up, Toyota was there with bigger, more expensive, and more luxurious models that fit their changing lifestyles. The Camry sedan for young families. The Sienna minivan for soccer moms. Then the whole line of Lexus luxury models to aspire to when you've finally made it.
To duplicate that success, Toyota needs a new car -- not a new brand name -- that captures the fancy of newer generations. Not that it hasn't tried. Four years ago, it handed over the marketing of three cars to a group of twenty- and thirtysomethings who set up camp across the parking lot from Toyota's Torrance (Calif.) headquarters. In late '99, the so-called genesis group (note the voguish lower-case g) launched the sporty Celica coupe, the MR2 Spyder open-top roadster, and the peculiar-looking Echo.
Alas, these cars haven't captured young imaginations. Last year, sales of all three were off by double-digits, with the Celica down a telltale 32%. The genesis group, now to be renamed Scion, will be responsible for the new line when the cars start arriving in about three years. Come to think of it, Genesis -- whoops, genesis -- would have made a better brand if Toyota wanted to suggest a fresh beginning.
Toyota confirms the Scion name, but it's saving the details for its official unveiling in late March. However, the strategy is already pretty clear: Scion will start with a pair of radically styled, inexpensive models that appeal to a narrowly focused segment of future car buyers. "We're looking at a very trendy niche," Yoshimi Inaba, CEO of Toyota Motor Sales USA, told me in December. "There's a big spectrum among youth today, but we're trying to focus on the trendsetters, those who Toyota would never be able to capture with the Toyota brand."
The cars will be priced around $15,000 with no extras, perhaps not even a radio. Scion buyers instead will start from scratch and customize their cars by picking an MP3 player, say, and snazzier wheels.
The problem with this scheme is that Scions will still be sold in Toyota dealerships, presumably in a boutique off to one side of the showroom. So the trendsetters will still have to make their way through the over-chromed Avalon sedans and denim-blue Sienna minivans to find the hip cars.
And while they're walking back there, younger car buyers will be strolling past high-volume youth models that still wear the Toyota badge. That includes the just-introduced $15,000 Matrix sport-utility, which analysts think has strong prospects for being a bona fide hit with the new generation. (Actually, Matrix wouldn't be a bad name for a new car line, either.) But where does this segmentation of the Toyota-Scion line leave vehicles like these?
So call me a skeptic. It just seems to me that the tried-and-true hot cars with today's younger buyers -- the Volkswagen Jetta, the Nissan Xterra, the Ford Focus hatchback -- were the product of smart design and a willingness by the suits in the corner office to take a chance, rather than a convoluted marketing plan buttressing what has be at least a million dollars worth of new name.
But, hey, I'm willing to be convinced otherwise. So bring it on, Scion, Son of Toyota. First, though, tell me how to pronounce the name.
Armstrong covers the import car market for BusinessWeek from Los Angeles