Wednesday, February 4, 2004

Scion opens new doors for Toyota

Buyers are younger, have less to spend and are new to the brand

By Mike Boyer
The Cincinnati Enquirer

Funny thing about Toyota's youth-oriented Scion vehicles: Older folks like them too.

The boxy-looking Scion xA and xB, introduced last summer in California, were designed to appeal to younger car buyers, those under 30.

But the average age of a Scion buyer is 35, Toyota says.

"That may sound strange, because 35 isn't that young, but for a car brand, 35 is exceptionally young,'' Yukitoshi Funo, president and CEO of Toyota Motor Sales USA, said Tuesday.

Toyota is rolling out the Scion product line, and a third model, a sports coupe dubbed the tC, nationally this year.

This month, Toyota began selling Scions through separate areas in existing Toyota dealerships in the South and Southeast.

"The customers see a different salesman and a different sales process,'' Funo said.

In six months last year, Toyota sold about 11,000 Scions through 100 dealerships in California.

"Within six months, every customer in the United States will have a Scion product available,'' said Funo, who visited Toyota's North American manufacturing headquarters in Erlanger Tuesday en route to the Chicago Auto Show today.

Priced to sell under $15,000 and backed by Toyota's reputation for quality, industry observers think that Scion is drawing customers who might have felt they couldn't afford a more traditional Toyota car or truck.

Underscoring that view: Three out of four Scion buyers are new to the Toyota brand.

"We're bringing in totally new customers. They have no experience with Toyota at all,'' said Irving Miller, vice president of communications for Toyota Motor Sales, sister organization of Erlanger-based Toyota Motor Manufacturing N.A.

Toyota says Scion is more than just a youth strategy. The automaker says the product line is designed as a kind of laboratory for experimenting with new car-selling concepts.

These are heady days for Toyota. The Camry sedan, which Toyota began building at its Georgetown, Ky., plant in 1988, was the best-selling car in the United States in 2003 for the second year in a row and the sixth time in the last seven years.

And the gasoline/electric-powered hybrid Prius was named "Car of the Year'' last month by Detroit automotive writers.

The Prius, which gets up to 60 mpg, has been one of the hottest-selling vehicles in Toyota's stable.

Later this year, the company will offer a gasoline/electric option on its upscale Lexus RX and the Toyota Highlander sport-utility vehicles.

Funo said it's too soon to say how many hybrid SUVs Toyota will sell because the company hasn't priced the vehicles.

The Detroit automakers aren't sitting still. General Motors and Ford Motor are both introducing vehicles this year to try to reclaim the car market.

"The competition never stops. General Motors and Ford are putting extra effort in their car business. ... I think competition will increase," Funo said.

Toyota will unveil the new convertible Solara, a coupe assembled on a Camry platform, and a new Tacoma pickup truck today at the Chicago Auto Show.

The Solara, assembled starting last year at Georgetown, is the first Toyota car designed in North America.

Funo, a managing officer of the parent Toyota Motor Corp., said the automaker expects total U.S. vehicle sales, cars and trucks, this year to be around 17 million units.

That's up from about 16.7 million last year, the lowest level in five years.

But an improving U.S. economy and a number of new products such as the Solara should boost Toyota's U.S. sales, Funo said.

"We are very optimistic,'' he said. "The economy is strong, and on the rise. We think the market will be strong at least through the November election.''


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