Oh yes, they know what they're doing! Strategic. Smooth operator. Toyota, you've done it again.
While much of the recent news about Toyota “killing” the Scion brand is written from a negative perspective, there is the other side of the coin to consider. According to the Automotive News yesterday:
“Scion, which sold more than a million small cars over 13 years, was an early hit with young buyers who perceived Toyota’s offerings as reliable but utilitarian cars for their parents’ generation. From its inception, the brand served as a laboratory for offbeat vehicle, marketing and retail experiments….. The decision to shutter it may cast it as a historical failure, but Toyota will likely walk away vindicated in its efforts to strengthen its own image among younger shoppers…. The current Scion iA, iM and FR-S cars will be badged as Toyotas for the 2017 model year when they arrive in dealerships this August.”
"70 percent of Scions were purchased by customers new to Toyota and 50 percent were under 35 years old”, according to the official Scion blog.
So it worked after all! Toyota appealed to the youth buyers 13 years ago and captured over 1 million of them as customers. They don’t need to spend the money to maintain the badge going forward. They accomplished what they needed to do! In fact, it’s amazing that they were able to maintain it through the greatest economic recession of our current century.
Two of the most significant accomplishments of the Scion brand were:
1) They were only available with two options (Scion called it “mono-spec”): transmission and color selection. From a manufacturing and inventory point of view this was ingenious.
2) They offered a large selection of accessories to help customers personalize their vehicle.
The second accomplishment is significant as Toyota is now moving toward a process allowing all Toyota shoppers to select more accessories at the time the vehicle is purchased. Think about it! The accessory industry in the U. S. represents over $33,000,000,000.00 (thirty-three billion for those who are not math majors) each year and car dealers are getting less than 15% of that opportunity! Why sell and deliver a $35,000 ride to a customer you won over from the competition and not offer them the opportunity to purchase their accessories at the same time? Did I mention that if you purchase Toyota OE accessories at the time you purchase the vehicle that you can finance them with the car at the same rate AND if you do the accessories carry the same warranty that the rest of the vehicle does AND that they were designed by the same company that designed and engineered the car you just purchased?
Toyota knows, yes they do.