Update: Scion rethinking its brand in face of weak sales

Update: Originally targeted at the youth market and intended to have an ever-changing line of new models that didn't resemble those of the previous generation, Scion has instead ended up producing a series very similar vehicles at a fairly slow pace. Now pundits and the company itself are re-evaluating the brand's relevance and strategy.

The current staples of the brand, the redesigned xB and the 'new' xD very closely resemble the original entrants, the xB and xA. The tC coupe is set for a full redesign in 2010, but has received a few minor updates since its 2005 debut. With five-year model lives and iterative designs that evolve the same basic look, however, Scion isn't sticking to its original plan. With at least 16 consecutive months of sales decreases, the Scion brand is troubled at a fundamental level, with analysts comparing the brand to General Motors' Saturn nameplate, which many have credited as a distraction from GM's more established brands.

Tanking sales and an elusive demographic mean Toyota is considering new ways to build cars for the 'youth market' the brand is intended to target, reports the Detroit Free Press. It's not clear that there is a plan yet, but the brand is working on one, according to Scion corporate manager Dawn Ahmed. "We have to challenge ourselves to be relevant to trend-setting customers. We're looking at ways to enhance and refresh our products," she said."Scion was established five years ago with a blank sheet of paper. As we look to the next five to 10 years, there are no sacred cows. We want to make the Scion brand special, unique and exclusive."

Original: Toyota has become used to being successful in almost everything it does, so it must have come as a shock when the carmaker's youth brand, Scion, suffered from falling sales for 16 straight months. Even though dealers have had two updated models to sell during the period, monthly sales have fallen each month, and the brand's recent struggle comes as a surprise considering the great success of the first-generation of Scion cars.

The falling popularity has been attributed to a weak car market and Scion's marketing strategy which requires 'momentum' to be successful. Toyota has also acknowledged that the model changeover was a factor in slowing down the momentum behind Scion due to the lengthy time period they took to get the xB and xD into showrooms. "We underestimated the loss of momentum from the dark period for those two vehicles," said Jim Lentz, president of Toyota Motor Sales USA, during a recent interview with AutoWeek. "The way Scion is marketed, it takes longer to get traction." Ever since the changeover of two of the three Scion models, the xB and the xD, sales fell almost 25% in 2007.

Declining sales have also been blamed on increased competition from other car manufacturers. An analyst from J.D. Power and Associates said that the typical Scion customer fits into two profiles - one looking for the cheapest car, and the other buying a Scion because it is cool. It is the former category, rather than the latter, which might be affected by increased competition in the subcompact market from manufacturers such as Nissan and Fiat.

To give an example of how much trouble the brand is in, January sales of Scion models was around 7800 units. In January of 2006, around 10 700 Scions were sold through about 60 less Scion dealers then there are currently. In the short-term not much can be done except to increase the marketing and hype around Scion but in the long term Scion dealers are hoping for new models to attract new and repeat customers looking to trade-in their old Scions.