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Three years after starting the Scion brand started in the U.S., Toyota announced that its starter division is finally making profits.
According to Bloomberg, Scion only contributes 2% of sales to Toyota's worldwide tally. Nonetheless, the young marque represents vindication for the carmaker's plans to design a new brand that would lure younger buyers and a test ground for new marketing ideas.
How does Scion generate its profits? By making things simple, for one thing. There are no factory options on its cars, for example, which sell for $15,000 to $18,000. Customization happens on the dealer level, who sell on average over $1,000 worth of accessories per vehicle. And Toyota's finance arm gets a cut from every loan that they make to a Scion purchaser, too. In keeping with its new marketing ideas, Scion shuns expensive network TV advertising in favor of the Internet, such as animated Internet ads. The brand also acts as a sponsor of art and nightclub events.
In another countercultural move, Toyota said that it is consciously limiting production of Scion vehicles in order to keep up the demand for them; its sales projections through 2008 show that it has plans to produce 170,000 vehicles, or about the same as its 2006 production figures.
Scion enters the 2008 model year early, with a new, larger version of its xB model bowing in the first part of May. The smaller xA car will be replaced by a more Toyota Matrix-like xD (pictured) in August. Sales of both cars should top out at 100,000 units next year.
The tC sports coupe remains relatively unchanged for the new model year.
Our take? A recent survey says that 80 percent of Scion owners wouldn't have considered another Toyota vehicle when shopping. Yet which is the brand that Scion owners usually trade up? Why, Toyota (of course), which is exactly what Toyota wants to hear.
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