Scion to Launch New Model as Brand Refocuses on "Pragmatic" Buyers

Scion will launch a new model within the next two years as the brand refocuses on today’s more “pragmatic” customers. After unveiling the new iA sedan and iM hatchback, Scion group vice president Doug Murtha said the division of Toyota realizes its target market and its mission have changed.

Murtha declined to elaborate on the future vehicle, but said we’ll see it in within two years’ time. Given the brand’s recent emphasis on expanding to new vehicle types that appeal to a broader segment of customers, a small crossover would be a smart bet.

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At the New York auto show, Scion wanted to launch a sedan and a hatchback in recognition that the younger buyers the brand targets have moved on from the quirky, tuner-ready cars Scion first introduced in the early 2000s. While Scion remains focused on 18-34-year-old buyers — Millennials — Murtha said the company needed to adjust its perception of what they wanted from a car.

“We really see it as an assessment of the evolution of the target market,” Murtha said. “We were pretty out there on the end of the quirky spectrum with our first-generation products.”

Instead, today’s Scion customer wants a practical, sensible car that still stands out a bit from, say, the tens of thousands of Toyota Corollas sold every month. In that respect, Murtha thinks Scion’s small size helps the brand’s appeal.

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“There’s an interest in niche brands, there’s an interest in lower-profile, lower-volume-type products,” from younger buyers, he said.

Not that young people have deserted Scion. The average Scion driver is 37 — Scion doesn’t quote buyer ages, as a big proportion of drivers still have their parents co-signing the lease. The Scion tC has the youngest demographic at 27-28 years old, and the FR-S sports coupe averages 31-32-year-old drivers.

But whereas Scion initially launched unusual cars, promoted them with overly quirky ad campaigns, and sold dozens of aftermarket parts for the cars at dealerships, today’s Scion will hone in on simply giving young drivers the cool, everyday cars they can’t find in any other showroom.

“There’s less demand for something as far out on the spectrum as what we had before,” Murtha said.

Changing customers, changing cars

The types of cars Scion sells must change if it wants to reach new demographics. The 2016 Scion iA, the brand’s first sedan, is perhaps the best example of that.

“When they first came to us with a sedan for Scion I thought, ‘OK, how is it going to play out?’,” Murtha said. “But as the vehicle took shape, I kind of felt like there is enough dynamism in this vehicle that it’s not the traditional econobox.”

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After all, Scion is finding it harder and harder to get young customers interested in two-door cars. He says Millennial shoppers are more practical than before and think farther down the road. For instance, he recalls a 27-year-old woman in a customer clinic who criticized a coupe because it would be hard to install baby seats — even though she was single and childless.

Nor can Scion design be so out-there that it won’t resonate with car buyers. The brand wants to find a comfortable middle ground where the cars look different and more exciting than Toyota products — not polarizing necessarily, but “I want some people to say, ‘huh,'” Murtha said.

For now, there are no plans for Scion to develop a unique vehicle, so the brand must continue to pull models from elsewhere in the Toyota lineup. The Auris on which the Scion iM is based was considered for sale in the U.S. as a Toyota but executives turned the car down. Scion, however, can still act as Toyota’s place to experiment with lower-volume cars.

“I’m trying to find something that we wouldn’t easily put a Toyota badge on,” Murtha said. “We have to find and occupy space that they [Toyota] are not occupying. Our fundamental product sourcing strategy is to look for cars in the global market.”

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Sometimes, as in the case of the 2016 Scion iA, that global market means a Mazda vehicle built in Mexico. Murtha said the decision was mutually beneficial, as Scion didn’t have a new subcompact car and Mazda needed technical backing getting its Mexican factory off the ground. But while the media have hyped the cross-pollination of the Mazda2 and Scion iA, Murtha isn’t worried consumers will pay attention.

“I don’t think your average entry-subcompact consumer is going to really get that hung up on it,” he said. In customer clinics when Scion asked buyers about the platform sharing, “We got mixed reactions. Unless you’re pretty attuned to style and design language, I think it’s going to be missed by a lot of the customers. Even when it’s not [missed], it wasn’t a deal-breaker for the vast majority of them.”

More to come
Ultimately, Murtha would like to see Scion selling more than 150,000 cars per year to buyers averaging 37 years old. In 2014 the brand sold 58,009 cars, down from 68,321 in 2014. The launch of the Scion iM and iA will help start that, but the company will need to deliver some hit vehicles if it wants a continued increase in sales.

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