Tuesday, November 17, 2015

Scion Survival: History, Sales, and the Future of the Brand

2008 Scion xB
Since publishing my recent review of the Scion iA, I have noticed some discussions about the future of the Scion brand as a whole. I've read comments like, "Scion should've just brought over the new Toyota bB in 2008 and things would be better," and "I can't believe Toyota is having Mazda build the iA," and finally, "Scion should just cash it in."

It's really the last comment that I generally think about since the other two have already happened. I often hear people compare Scion to low-volume brands like Mitsubishi, whose sales have been in a proverbial slump until just recently, or to Suzuki, which did decide to pack up and leave the North American market in 2013. So should Scion really just cash it in, or is there still life left in the brand? Let's look at some history and numbers. 

The brand started out with 2004 model-year vehicles including the wedge-shaped xA, the boxy xB, and the sporty tC, with the xB and tC being the biggest sellers. In 2008, the brand discontinued the xA for the Yaris-based xD and then traded its funky and frugal xB for the larger, more powerful, and slightly less boxy xB, sold as the Toyota Corolla Rumion in Japan. Ever since the introduction of the xD and larger xB, sales have slid. Unfortunately, the two new models couldn't have been launched at a worse time, as the economy was practically falling out from beneath everyone's feet and auto sales were terrible all around. You might be able to chalk it up to bad timing.

Scion launched a redesigned tC for 2011, and in 2012, Scion launched the tiny iQ city car in attempt to beat the Smart FourTwo at its own game. Then, of course, came the rear-wheel drive, Subaru-powered FR-S sports car in 2013. In 2014, the xD was axed and the tC got a refresh. In 2015, the iQ exited the lineup. For 2016, the Mazda-based Scion iA sedan and Toyota Auris-based iM hatchback have been unveiled and are ushering in a somewhat more mainstream lineup for the brand.

Scion sales history
Overall Scion sales from 2004 through 2015 (YTD)
Scion sales peaked in 2006, when the brand moved 173,034 units. The brand bottomed out in 2010, when just 45,678 models were moved—a 73.6% decrease in sales. With about a month-and-a-half of sales remaining in 2015, Scion has thus far sold 45,471 units. I'm expecting sales to be right around the 60,000 vehicle mark for 2015.

As of October 2015, the tC is currently the best-selling overall model, year to date, followed by the xB, but both models are down in sales compared to last year. Actually, all Scion models are in the red in terms of year-over-year sales, including the hyped FR-S, which is down 24.2% overall compared to 2014. The new iA and iM finished October with 1,977 units and 1,408 units sold, respectively. The third-place car is the tC, which sold 1,080 units

But let's keep this in mind: Scion has never been a volume car brand, nor was it really meant to be. I was once told by a Scion representative that the brand is really more of a marketing company that happens to sell cars.

Scion has been a great experiment, but it reminds me of another great automotive experiment: Saturn. This General Motors brand did things a little differently in the 1990s. It had unique dealer experiences, and at the time, had a simple, yet defined lineup of cars. That is, until the early 2000s, when it became a brand of rebadged products from within GM (Saturn Relay minivan, Saturn Outlook crossover, Saturn Aura, etc.)  with unappealing designs (Remember the Ion? Don't worry, you're not alone), and a lack of focus (the Saturn Astra, a rebadged Opel Astra from Europe was a valiant last attempt. Sort of). Saturn closed its doors on October 31, 2010. If you think about it, there are some parallels. Rebadged products, unappealing designs, and arguably a lack of focus. Granted, these are all arguable. Maybe Scion's latest direction will eventually lead to bigger sales numbers.

Scion iA
2016 Scion iA sedan
Scion seems to be going down a much more mainstream path at this point, at least compared to its early days. And yes, I happened to own a 2005 Scion xB until August of 2007, when I traded the car in on my 2007 Yaris. Frankly, there doesn't seem to be nearly the excitement there was in the brand's infancy. Scion was initially the anti car brand. It had daring, unique products, like the original xB and xA. Heck, even the tC was a strong competitor to other makes. The brand went against the grain and was able to create a subculture of car owners supported by Scion through car shows, events, and regular hip, cool outings such as art exhibitions, DJ nights, and so on. Now, most of the events are gone, the cars are more mainstream, and the sales have fallen off. Coincidence? Perhaps. But talking with  former Scion owners, many feel like the brand abandoned them.

Scion is changing and it is not the car company it was from 2004–2006. However, the brand needs to continue to up its sales unless it wants to become irrelevant. Then again, some naysayers may believe it's already too late. Car companies can successfully reinvent and revitalize themselves. Look at Cadillac in the 2000s. It went from a geriatrically centered brand, to a car company that offers some amazing vehicles that are darn cool. CTS-V, anyone? However, it takes some amazing cars, a heck of a lot of marketing, and some good public relations to successfully relaunch a brand.

What will happen to Scion is anyone's best guess. It seems as if the brand is searching for its sweet spot, but I'm unsure the iA and iM are it. It'll be interesting to see what transpires to this brand, and if it becomes yet another "S" brand (Saturn, Suzuki) to disappear.


nlpnt said...

The iA and iM are off to a fairly good start. The question is whether they're selling as well as, better, or worse than if they were branded Toyota (or in the iA's case Mazda). I definitely think the iM at least would benefit from abondoning "Pure Price" and offering two or more trim levels and/or some major factory options; lower the base price by moving the alloys and body kit to the options list, add a sunroof and leather options.

One point for the iA over the old Mazda 2 is that in my area at least the Toyota dealer has a better reputation and more put-together operation than the Mazda one.

Ducati Scotty said...

Saturn and Scion both offered no haggle pricing. Scion may be a marketing company that sells cars, but Saturn's real hook was that they completely changed the way an automotive factory and dealership in the US were run. While Scions may be getting more bland as time passes, Saturns were always pretty unexciting. Scion does seem to have strayed from its initial quirky and inexpensive offerings but at least I still like their cars. Saturns were never really anything to write home about.

Jason Reece said...

The original concept for Scion was a no-haggle, no-pressure sales environment and all the cars came from the factory with same features. Changing the wheels, upgrading the audio system and a lot of other dealer-installed customization options were the big differentiation. It was young and funky, or so they thought!

At this point, Toyota is robbing itself of potential sales by continuing to maintain the separate Scion brand. Just make the iA the new Yaris (hatch and sedan), call the tC a Celica and make the iM a Corolla sub-brand. Then they could be sold at every Toyota dealer, not just the ones with Scion 'departments'.

I'm still trying to figure out why Mazda decided not to offer the new Mazda2 here??? It looks so much nicer than the iA. Perhaps they were concerned that it might poach would-be Mazda3 buyers which sell at significantly higher price point once you add the option packages.