Toyota plans to grow Scion lineup

When Toyota Motor Corp. created the Scion brand, its objective was to attract trendy young customers with a separate lineup of edgy-yet-affordable models.

But with only three vehicles in the Scion range, the 6-year-old brand already is losing its freshness.

The solution, says Toyota’s new U.S. sales chief, is to expand the lineup so that there’s always something new and exciting.

“For the Scion business model, product freshness is key,” said Yoshimi Inaba, chairman and CEO of Toyota Motor Sales USA as well as president of Toyota Motor America, on a recent visit to Detroit. With its no-haggle pricing policy, Scion has few other levers to increase sales, which are down 60 percent this year, more than Toyota’s overall 38 percent drop.

“One of my jobs is to revive the Scion spirit in the United States,” said Inaba, who was the driving force behind the brand during his last stint in the nation. One likely addition to the Scion lineup is the iQ, a minicar that Toyota sells in Europe and Japan under the Toyota brand.

Scion exists only in the United States. Earlier this year, Toyota displayed a Scion-badged iQ in New York, but the company has not confirmed plans to market such a car in the United States.

Speculation is rife that Toyota might add a gas-electric hybrid car to the Scion lineup. But company spokesman Irv Miller said Toyota would have to consider the cost of fitting a hybrid powertrain into an inexpensive and already fuel-efficient car. Starting prices for Scion models range from $14,800 to $17,000, although buyers tend to spend more to customize their vehicles.

Toyota is now reviewing all of its vehicle lines in the United States, as well as its operations, after losing money in the region. As it assesses Scion, Toyota must decide whether it is content to sell cars to young people by offering inexpensive models, or whether the brand retains its original mandate, to attract young trendsetters who will dial up Toyota’s coolness factor. If the goal is to attract young, leading-edge buyers, then “you have to, like Inaba’s saying, keep everything fresh,” said Wesley Brown at Los Angeles-based consulting firm Iceology. “But keeping things fresh isn’t as easy as we all think on the outside that it should be,” he said.

It’s particularly tough in the auto industry “because of the gestation period, and the money and risk involved with a new product.” Scion hit the mark in 2003 when it rolled out the first xB, a boxy model from its Japanese lineup that didn’t resemble anything on American roads. But the xB’s success led Toyota to take the safe route when it came time to replace the vehicle.

Toyota produced a bigger, more conservative version of the xB. Brown says Toyota was right to produce that vehicle — but it should have marketed it under the Toyota brand, where it would have attracted more customers. Meanwhile, the space once occupied by the first xB is being filled by edgy new offerings such as the Nissan Cube and Kia Soul. Toyota has many models in its Japanese and European model ranges that could be turned into Scion vehicles at little cost, Brown said. In his view, the hatchback version of the Yaris should have gone into the Scion lineup, with only the staid sedan going to the Toyota range where people expect something solidly

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