10 Feb 2016

Scion: A Missed Opportunity

In 2003 Toyota was more than excited to bring out the Scion brand. The concept was to introduce creative and customizable car designs, plenty of standard features, and no-haggle purchasing. The goal?  Appeal directly to millennials and start to lower the age of Toyota’s average buyer.

With sales peaking at 173,034 in 2006, things certainly looked promising. But here we are a decade later with Scion sales stumbling along at a meager 56,167 for 2015. There are plenty of millennials entering the car market. So, what went wrong?

The major complaint by both baby boomers and millennials alike is that the promises of a faster car buying experience never came true. The “no haggle” system attempted to address only one aspect of the purchase ordeal.

Unfortunately “no haggle” meant dealers could not adjust prices to quickly react to market conditions. Consumers missed out on incentive money. Soon all parties recognized a lose-lose situation. Scion built their brand on creating a better and faster dealer experience—and that simply did not happen.

Automotive “standard features” have changed a lot since 2003. Just look around any new car on a dealer’s lot. Technology has now migrated from luxury vehicles all the way to entry level vehicles. Scion had to include many features just to keep up with market demand and federal laws. And to be very clear, customers both young and old made it known that they wanted all the comfort and connectivity they could get in every available model. So, over time it has become much more difficult to stand out in this technologically driven market.

That brings us to the most important topic of all: the Scion cars themselves.

Nissan’s Cube and Kia’s Soul eventually conquered the aging xB, showing Scion there could be a fresh take on their polarizing model.

The forgettable TC coupe, arguably the second best offering, now prepares for its last hurrah in August 2016. The rest of the stable seemed to be, for the most part, dead on arrival.

At $25,776, the FR-S sports coupe looked zoomy, but lacked power to value. In a market dominated by Mustang and Camaro, 200 horsepower is bad news. Even the Subaru clone of the same car outsold the FR-S.

The iM enjoyed an ugly front end and hatchback tail—which was the only thing that set it apart from its competition.

The IQ mini-car died on arrival, and offered little to allow it to step out of Smart’s shadow.

Finally, the xA sedan flashed some sales but couldn’t keep up. It’s brother, the xD, shared the same fate as it failed to make a splash in the market.

As Toyota now adopts the iA sedan into the fold, it should look good with some Toyota badging:  maybe it can overtake the limping Yaris as Toyota’s entry level vehicle.

One can only speculate on what would have happened had Toyota been more open minded.   Scion should have been its creative design outlet, churning out polarizing models that could lead the industry. Yet they played it safe. They had the resources to take a chance or two, and the gains would have been worth it. But, OK, Toyota lowered the average age of their buyer.

It begs the bigger question: What could have been?

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