By Christopher A. Sawyer
The Virtual Driver

(February 15, 2016) Scion started as an attempt to interest younger buyers in the Toyota brand. When it launched in 2003, the average age of a Toyota buyer was 54 years old. No surprise, really, as Japan’s (and now the world’s) largest automaker built solidly dependable, boring cars. Without a change in attitude and product, it would miss out on engaging a generation — Gen Z, a.k.a. Millennials — that is larger than the Baby Boom generation, and will have a long-term effect on the market. This age gap was a dagger pointed at Toyota’s heart.

Luring young buyers to Toyota wasn’t going to be easy. A form of arteriolosclerosis common to large companies had set it, and complacency ruled the day. The company was flush with cash, had among the highest quality ratings in the business, and people returned like clockwork to Toyota dealerships to buy new cars.


Original Scion xB

It was the automotive equivalent of buying bonds or a Blue Chip stocks; it was just something that you did. Also, studies showed that young buyers wouldn’t be caught dead in a Toyota store, and — no surprise here — they didn’t trust dealers to give them a fair deal. So Scion became a way to engage these buyers with sales and promotional schemes too risky for the Toyota brand, and with vehicles aimed at their needs and desires.

Despite that many may think, it was the sales and marketing side of the equation that was most important to Toyota as it would have the greatest effect on the company and how it did business. The vehicles really didn’t matter.

Original Scion xA

he tiny box-on-wheels xB and sporty tC coupe were the mainstays of the brand. The U.S. market had never seen anything like the aggressively homely xB, while the tC entered the market just as Honda dropped the ball with the Civic Coupe. They were a good base on which to build, but already signaled that Toyota wasn’t going to pump resources it could spend more profitably elsewhere into the Scion brand.

The xB was a federalized version of the home market bB, while the tC was based on the Toyota Avensis. They were joined by the xA, an export version of the Toyota ist hatchback, and that model was replaced by the xD, which was the next generation ist, in 2007-2008. Neither  did nearly as well as the xB and tC.

As the years went on, the xB was replaced by a larger and more stylish version of the home market bB, but did not have the charm of the original. Sales stagnated. The same happened with the tC, which went five years (2005-2010) without any major changes, then did the same in its second, and last, iteration. For a vehicle aimed at attracting fickle youth, that’s an eternity. Thrown into the mix were the iQ city car, which bombed dramatically, and the FR-S sports car. The latter has not set the sales charts on fire due, in part, to its half Subaru parentage, unadventurous styling, stiff ride, and private label branding.

Yet it began with such promise. Company CEO Akio Toyoda wanted an affordable, front-engine/rear-drive Lotus Elise, but got a modern day Celica instead.


2016 Scion iA and iM

We have covered the Scion iA and iM before, but suffice it to say, only the iM has a chance of surviving beyond its current lifecycle. That’s because the Mazda2-based iA nips at the heels of the Corolla, while the iM is a car that Toyota in the U.S. does not currently have in its lineup. Plus, as a four-door hatch, it won’t compete for buyers with the two-door FR-S. Finally, the Nissan Juke-like C-HR, a vehicle that undoubtedly would have been a best seller for Scion, will go directly to Toyota without a stopover in Scionville. It will become Toyota’s youth halo vehicle.

Rather than get bogged down in the whole, “Do Millennials like cars, or are they the first modern generation to turn its back on personal mobility?,” argument, let’s stipulate that the reason for the drop in Scion sales and the lack of Millennial participation in the car market is mostly economic. Their labor participation rate is quite low, as are their wages, while school loan debt siphons off the majority of their spare cash. Once this changes, it will propel the new car market, but that turnaround will come too late for Scion.

Many of the processes created for Scion, like a set price, transparent financing process, personalization, and pre-paid maintenance plan have been adopted by Toyota and Lexus. However, ideas like Mono-spec cars (where you get to choose only the transmission type and color), or creating Release Series vehicles with special features and options are likely to fade away. Toyota has gotten what it wanted from the brand, and believes the costs associated with a separate lineup, and sales and marketing organization no longer justify the cost.

Toyota claims young people are beginning to return to the Toyota brand, so the elimination of Scion was a logical answer to the public’s buying aspirations. It’s a comfortable fable Toyota executives can tell themselves late at night, but the truth is that Scion’s days were numbered from the start.

The Virtual Driver