Toyota has officially announced that their North American sub-brand Scion will be discontinued. The FR-S, iM and iA will all be rolled into Toyota starting August, while the tC will be discontinued. The sub-compact SUV CH-R will be launched as a Toyota.
Employees of the brand were informed of the decision yesterday before the Japanese manufacturer made the announcement public this morning.
Scion had been introduced in 2002 as a youth-oriented, North American exclusive lineup. The xB, sporting the S badge, set a milestone both for the brand and for the market, introducing their version of a box-shaped, compact urban utility vehicle, a style other manufacturers have since embraced. The introduction in 2012 of the result of their collaboration with Subaru, the FR-S, sparked a renewed interest in the Scion brand, especially since at equal model, the Toyota counterpart was more affordable.
These events were not enough to counteract the hits and miss, the thinning lineup and a disinterested target audience less and less willing to dig into their pockets to purchase a new car.
Valuable Insights Will Aid Toyota in Attracting New, Young Customers
February 03, 2016
Scion Fact Sheet
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.
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“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