Automaker is bringing its youth-oriented Scion brand to Canada in 2010

Oct 24, 2008

With more than 30 automotive brands in Canada and sales dropping across the board, it may not seem like the best time to introduce a new one into the market. But that is exactly what Toyota Canada is doing with the launch of Scion, its youth-oriented brand that debuted in the U.S. five years ago.

The Japanese automaker said this week Scion will debut three models here in 2010, in showrooms initially located only in Toronto, Vancouver and Montreal.

Since Scion was introduced south of the border in 2003, Toyota has sold half-a-million units of the modestly priced, fuel-efficient compact vehicles, largely to younger consumers.

The carmaker is hoping that the three models it plans to introduce to Canada – the subcompact xD, the compact xB and compact coupe tC – have the same effect here.

"In Canada, six million people are what we'd call Generation Y – they're trendsetters in every way, and we need to speak to them in a language that's genuine and appropriate to their needs," said Stephen Beatty, managing director of Toyota Canada.

Despite market conditions, Beatty said Canada is finally ready for Scion – and Toyota is clearly ready for the much-needed younger buyer the brand could attract.

"The Scion brand has the youngest median age of any brand in the U.S., at 33 years old," said Jack Hollis, vice-president of Scion. "We also have the `youngest' single vehicle in industry – our tC customers have an average age of 24."

The average age of a new-car buyer in the U.S.? Try 48.

Part of the reason for the age discrepancy is Scion's approach to building vehicles. Almost everything is optional and customizable before delivery, from the radio down to wheels and tires. Each model has a number of exterior and interior trims, performance parts and colour-keyed parts that make each Scion unique to its purchaser.

It also doesn't hurt that in an era of high gas prices the Scion models are relatively fuel-efficient, with estimated fuel consumption ratings of 9.7 L/100 km in the city and 7.2 L/100 km on the highway.

Beatty said that since Scion's inception, the case to sell it in Canada had been under yearly review, but the brand would not have met the required sales threshold to make importation viable.

"People's expectations are quickly changing in regards to fuel economy and size of vehicles, and they are looking for more choice in a smaller package," added Beatty.

When introduced, the vehicles will be available at Toyota dealerships upgraded to handle a "store within a store" selling concept – similar to what Mercedes-Benz has done with its Smart microcar brand.

The Scion brand represents about 10 per cent of Toyota's U.S. sales. Three models start at around $15,000 (all figures in U.S. dollars) and can swell to more than $25,000 when fully outfitted. Canadian pricing has not been announced.

Could the trendy new models steal sales from established Toyota nameplates like Corolla, Matrix and Yaris? No, said automotive industry analyst Dennis DesRosiers. "I don't see them cannibalizing Toyota sales, because Scions are targeted to a narrow range of consumers. That way, both brands will see buyer demographics that aren't compromised by the other," DesRosiers said.

He noted that current Scion models are finding their way into Canada without official sales.

"One of the things you have to remember is that with Toyota having become so big in the industry over a number of years, you tend to get long-in-the-tooth buyer demographics. This is a really unique way to bring in a younger audience."

Once the new brand is in place, Toyota will, in effect, have the demographic range covered – Scion for the young buyer, Toyota for the mid-range and Lexus for the older, more affluent crowd.

Scion makes a point of pitching its vehicles at a younger demographic in the U.S. through grassroots marketing. Instead of using traditional media, Scion has focused on reaching trendsetters involved with online virtual worlds and urban music, film, fashion and art scenes.

"We reach out and work with different companies, like small boutique jeans and clothing stores, artists involved with street films and street art – groups that show creativity of entertainment," said Scion's Hollis. "Even talented people yet to be discovered by the mainstream – those are who we're attracting and who we know are honest with feedback."

Young owners are also attracted to the Scion because of the clubs. There are nearly 200 registered Scion clubs – independent of the automaker – across the U.S., and for Hollis it's "proof of our transparency and authenticity. Our owners come together, spend a lot of time accessorizing, socializing and customizing their cars."

Despite the good vibes, the brand's image of appealing to younger buyers took a blow recently when it rolled out a redesigned xB and all-new xD model that were larger in every way.

In response, Hollis said Toyota does not evaluate the success of Scion solely on absolute sales numbers.

"It's about who we're selling to and how we're selling. We track every new buyer to our brand every month, and then how many we keep in our corporate family by transferring to our Toyota or Lexus brands," he said.

"Right now, half of Scion owners switch to a Toyota or Lexus for their next car, and to date we've added almost 500,000 new people to the Toyota family that we don't believe would have come to us otherwise."

In the U.S., every Toyota dealer is capable of repairing Scions, which are mechanically similar to Toyotas. Canada should be no different, said Beatty.

If all goes according to plan, Scion will be the first new brand to be sold in Canada since Mitsubishi in 2003.



Maybe I'll be the first one on my block to have a tC.