For something a bit surprising. This morning, Toyota has announced that the Scion brand will be shuttered and the current lineup will transition over to the Toyota brand for the 2017 model year.
News of this was first reported by CarBuzzard where a meeting was held yesterday with Scion employees notified of the decision.
“This isn’t a step backward for Scion; it’s a leap forward for Toyota. Scion has allowed us to fast track ideas that would have been challenging to test through the Toyota network,” said Jim Lentz, CEO of Toyota Motor North America and the founding vice president of Scion in a statement.
Scion was first introduced back in 2002 as a brand that was very different from Toyota as it was aimed at young buyers. It was fun and offered unique vehicles (the xA and xB at launch). The brand also did things a bit differently with a unique marketing campaign and a no haggle policy. Toyota hoped customers who bought Scions would transition into Toyota and Lexus vehicles in the future.
But a number of issues plagued Scion which ultimately led to its downfall,
- The average age of Scion buyer was around 49 years old, not the young crowd Scion was hoping for (some reports put it at 15 percent of Scion customers were under the age of 35).
- Scion not updating their lineup at a decent rate and letting models languish
- Massive sales decline from 175,000 vehicles in 2006 (their best year) to 56,167 vehicles for 2015
But it seemed last year Toyota was going to give the brand so much needed attention with the launch of the iA (Mazda2 sedan) and iM (Toyota Auris). There was also a new subcompact crossover that would be joining the lineup for 2017, the C-HR. But sadly, it was a little too late. The damage was done and Toyota realized there wasn't any way to save the brand.
The twenty-two dedicated team members for Scion will be able to transition into positions at Toyota.
“Scion has had some amazing products over the years and our current vehicles are packed with premium features at value prices. It’s been a great run and I’m proud that the spirit of Scion will live on through the knowledge and products soon to be available through the Toyota network,” said Andrew Gilleland, Scion vice president.
Press Release is on Page 2
Scion Brand to Transition to Toyota
- Valuable Insights Will Aid Toyota in Attracting New, Young Customers
TORRANCE, Calif., Feb. 3, 2016 – Scion, established as a separate brand in 2003 as a laboratory to explore new products and processes to attract youth customers, is now transitioning back to the Toyota brand. Scion achieved its goals of developing unique products and processes, and bringing in new, younger customers to Toyota. With more than a million cars sold, 70 percent of Scions were purchased by customers new to Toyota and 50 percent were under 35 years old.
“This isn’t a step backward for Scion; it’s a leap forward for Toyota. Scion has allowed us to fast track ideas that would have been challenging to test through the Toyota network,” said Jim Lentz, founding vice president of Scion and now CEO, Toyota Motor North America. “I was there when we established Scion and our goal was to make Toyota and our dealers stronger by learning how to better attract and engage young customers. I’m very proud because that’s exactly what we have accomplished.
“We could not have achieved the success we have had without the incredible support of Scion’s customers, dealers and team members, so supporting them throughout this transition process will be one of our top priorities,” said Lentz.
Toyota’s decision was made in response to customers’ needs. Today’s younger buyers still want fun-to-drive vehicles that look good, but they are also more practical. They, like their parents, have come to appreciate the Toyota brand and its traditional attributes of quality, dependability and reliability. At the same time, new Toyota vehicles have evolved to feature the dynamic styling and handling young people desire.
Scion has consistently been the youngest brand in the auto industry with an average age of 36 years old. At 29, the tC sports coupe has the lowest-average age buyer in the industry. The most recent additions to the line-up, the iA sedan and iM 5-door hatchback, are bringing in new buyers with 70 percent being first-time new car purchasers. Additionally, more than 50 percent of iM and iA buyers are under 35 years old.
As part of the brand transition, beginning in August 2016, MY17 Scion vehicles will be rebadged as Toyotas. The FR-S sports car, iA sedan and iM 5-door hatchback will become part of the Toyota family. The tC sports coupe will have a final release series edition and end production in August 2016. The C-HR, which recently debuted at the L.A. Auto Show, will be a part of the Toyota line-up.
The service and repair process for Scion customers will be unaffected by this change as customers will continue to visit Toyota dealerships’ service departments.
“We appreciate our 1,004 Scion dealers and the support they’ve given the brand,” said Bob Carter, Toyota senior vice president of automotive operations. “We believe our dealers have gained valuable insights and have received a strong return on their investment. During this time of transition, we will work closely with them to support this process and help communicate this change to customers.”
Scion’s 22 dedicated team members, who represent sales, marketing, distribution, strategy, and product and accessories planning, will have the opportunity to take on new jobs at Toyota Motor Sales, U.S.A., Inc. in Torrance. Scion regional representatives will assume different responsibilities in their respective Toyota sales offices.
“Scion has had some amazing products over the years and our current vehicles are packed with premium features at value prices,” said Andrew Gilleland, Scion vice president. “It’s been a great run and I’m proud that the spirit of Scion will live on through the knowledge and products soon to be available through the Toyota network.”
- Scion Processes - Scion served as a laboratory for products and key sales and marketing processes that have provided valuable lessons for other Toyota brands:
- Pure Pricing – dealers set a price for a car and customers did not need to negotiate
- Mono-Spec cars – providing cars with only two options: transmission and color
- Personalization – offering a large array of accessories to help customers customize their vehicles
- Pure Process – transparent financing process
- Pure Process Plus – an online system so much of the car-purchase process could be completed online
- Scion Service Boost – pre-paid maintenance plan
- Release Series – dynamic life cycle management through special features and options
- Grassroots marketing – initial Scion brand was “discovered” by customers through unique events
- Scion Products -- Scion has had some outstanding products that have made an impact in the industry including the original “box,” the xB and the FR-S affordable sports car. The tC sports coupe has consistently attracted the youngest buyer in the industry.
Scion Executives -- Scion served as an important training ground for Toyota vice presidents, many of whom have been promoted to other roles:
- Jim Lentz -- Chief Executive Officer, Toyota Motor North America
- Mark Templin – Managing Officer, Toyota Motor Corporation, Executive Vice President, Lexus International
- Jack Hollis – Group Vice President, Toyota Marketing
- Doug Murtha – Group Vice President, Corporate Strategy and Planning, Toyota Motor North America
- Andrew Gilleland – current Vice President, Scion