Debate at Scion: How to grow

By MARK RECHTIN, AUTOMOTIVE NEWS

Toyota is considering an expansion of Scion’s product lineup over the next five years in an effort to build sales volume.

The youth-oriented brand could go from its current three vehicles–the boxy xB, the xD hatchback and sporty tC coupe–to as many as six vehicles.

“We will be bigger than we are today,” said Jack Hollis, Scion vice president. “We are studying two or three models in conceptual form right now.”

But deciding how much to expand the lineup could lead to some heated discussions at Toyota Motor Sales U.S.A. For every executive who thinks adding products is a good way to extend Scion’s reach, another feels that the youth brand should retain its low-volume, boutique positioning.

Hollis said 5-year-old Scion “has never been a volume brand.” But he is ready to offer buyers a wider choice of vehicles.

“Could it be a truck? A hybrid? An SUV? A subcompact roadster?” Hollis asked rhetorically. “We are not limiting our search. We are looking at all youthful products in Toyota’s global portfolio. We are open to products that could sell 20,000 to 25,000 units, and those that could sell from 40,000 to 50,000 units.”

Scion managers are working with Toyota’s advanced product strategy group, headed by Chris Hostetter.

The new products could be federalized versions of Japanese domestic market vehicles–as Scion’s original xB was–or could be new designs based on existing platforms.

“Whatever it is, it needs to be a blank canvas for personalization,” said Dawn Ahmed, Scion corporate manager.

Hollis said future volume growth for the Scion brand will come from the incremental products. After seeing sales spike to around 175,000 units in 2006, sales declined to about 130,000 last year. Scion sales have fallen year-on-year for 17 straight months.

Scion wants its three core vehicles to settle in the 130,000 range.

“We don’t want to push those three vehicles too hard,” Hollis said. “It puts too much pressure on our business model.”

Scion introduced the boxy Hako concept coupe at the New York auto show. Hollis said if built, the Hako would be an addition rather than a replacement for the tC coupe.

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