Toyota considering moving Scion upmarket. FR-S variants could pave the way
 

Scion weighs a move to entry-lux

Toyota seeks plan for under-$30,000 niche


NEW YORK -- Toyota is weighing a major shift in positioning for its struggling Scion brand: moving upscale to target entry-level luxury models coming from European makes.

The new lower-luxury niche includes Mini, the front-wheel-drive Mercedes-Benz CLA arriving this fall and Audi's compact A3 sedan shown last week on the eve of the New York auto show. Scion has gone after young entry-level buyers since its inception 10 years ago but has lost its early momentum.

"Everybody is looking at what direction Scion should go," said Jim Lentz, CEO of Toyota's North America Region. "We have to take a real hard look at what the future of the industry looks like strategically, and where we want Scion to play."

Scion, not Lexus, may be the way Toyota meets the new premium competition typified by the CLA, which will start at under $30,000, not including shipping. The Toyota brand, which has 18 nameplates, may be too product-heavy to compete in the mass market and join the entry-luxury fight as well.

And Lexus has refused to drop below the $30,000 price point.

"There's a cost to provide that outstanding Lexus customer service," Lentz said. "We don't want to lose that, and we don't want to cheapen our cars."

No decision has been made about Scion's future, but Scion Vice President Doug Murtha says: "If we stand still, we're going to be in trouble."

Lentz, who was Scion's first boss, said that when Toyota executives discussed strategy at the brand's birth they split on whether it should be a Korea-fighter or an entry-luxury brand.

"We were torn at what direction to go," he said. "We could go any of those directions."

Lentz cautioned that the idea of Scion moving upscale "is not a widely held view in the company." For one thing, the overall size of the segment for entry-luxury cars starting between $25,000 and $30,000 has not been demonstrated.

But Scion could move up the price ladder because it's already part of the way there. When the brand launched, entry-level cars were in the $13,000 range.

"Today it's hard to find much value below $18,000 to $20,000," Lentz said. "There's going to be a big need in the $25,000 range for a fun-to-drive, nice-looking, value-oriented product."

Scion also could compete against the German luxury brands that insist true luxury means rear-wheel-drive but also have developed less expensive fwd platforms for the entry-luxury segment. The Scion FR-S is rwd, and Toyota executives have said the platform is flexible and could spawn variants.

"As we look at Europeans coming downmarket, the FR-S fits into that position," Lentz said.

Staying put

Moving up the price ladder could expand Scion's lineup. The FR-S coupe starts at $25,255, but a Toyota-badged convertible version unveiled at the Geneva auto show last month likely would be several thousand dollars more -- making it a stretch for the current target Scion buyer.

"The same body can't do a coupe for Scion and a convertible for Toyota," Lentz said.

Still, Lentz feels there is cause for Scion to remain in its current econobox niche.

"The Corolla is a great car, but it's a Corolla," Lentz admits about the dowdy but perennially strong-selling compact. Toyota hopes the 2014 Corolla's styling, seen in the Furia concept, will increase the Corolla's cool factor among Gen Y buyers. Plus, a new low-priced segment could be erupting with Honda entering the subcompact crossover segment in 2014.

There's another possibility cited by some insiders: Fold entry-level Scion products back into the Toyota brand. With the Corolla aiming for younger buyers, it's starting to play in Scion's original sandbox. Lentz discounted that possibility.

Scion has sold 900,000 vehicles in its short history. The recession took a huge bite of out of sales, which fell from a peak of 173,034 units in 2006 to 45,678 in 2010, as young buyers couldn't get steady jobs or good credit. Scion has rebounded slightly, selling 73,505 vehicles last year.

But the brand has room to grow. Among the age group it targets, "60 percent weren't in the market when we launched," Murtha said.

Many Scion buyers have moved up in the world, and are ready to buy a more expensive vehicle. Murtha says part of Toyota's study involves whether Scion should follow them up-market, or await the next round of entry-level buyers.

Stale product

For nearly a year, Toyota executives said last week's New York auto show would display a new direction for the brand. Instead, there were several minor mid-cycle freshenings.

That's odd because the xB and xD hatchbacks are 6 years old -- ancient for a brand that promised quick-turn product cadences.

Lentz declined to comment on the future of the xB and xD. Part of the reason for the slow product cadence is global. Scion must struggle for engineering and product development resources. As the parent company invests heavily in emerging markets such as China and South America, funding and staff for low-volume niche products only sold in the United States and Canada has a low priority, Lentz said.

The bottom line is that Toyota can't stand still.

Said Lentz: "If the market is coming to you, do you do it with Toyota or do you do it with Scion?"

Via: http://www.autonews.com/apps/pbcs.dl...e-to-entry-lux

What market are they targeting now in Japan?

i think they can do away with the scion market in the US

North America is Scion's ONLY market. It doesn't exist anywhere else.

Canada has scion too, it was introduced to them a couple years ago I believe.

Edit: Wait you're in Canada?

Canada is located in North America, friend.

Hahaha Reading too OP I thought i saw America...my bad

Lol that one was classic.

They have one giant flaw in their logic. The car will still say Scion. I'll be looking at upgrading my daily in a few years. This is about my ideal price bracket and the new CLA is sexy Mercedes quality at that price. Or even a clean used 3 series. Even though my last 3 series was a tad meh.

Hmmm, I'm not sure what they could slot in at right under 30k that would work as a CLA competitor. Toyota doesn't really have a platform that seems to fit in. Camry perhaps? But even then, that can get expensive. Although it seems to fit...

Camry platform, young edgy styling, nice features, maybe a V6 if its cost effective. Call it the xC?

this better be a April Fool's gag. After just showing off glowing emblems, Scion wants to seriously consider moving upscale?

its time for scion to rejoin toyota and make it one brand :)

Sounds like the perfect spot for either a new Celica or even MR

No worries haha :thumbsup:

I think Scion has the right target market, but does not have the right lineup of cars. The xd and xb are showing their age, the tc needs to be exciting enough to entice buyers who are otherwise looking at the fr-s. And the iq's sales will most likely come from fleet sales. What they need in my opinion is a rwd droptop, a rwd sedan, and a sporty hatchback/wagon/shootingbrake.

I don't think they need to move up to an entrylux market, but a great start would be offering luxury-like features on their vehicles. Things like leather upholstery, heated seats, push start, HIDs, foglights (for Christs sake!) as options.

After being fooled and doing some of my own fooling as well, my head is really messed up today.

Would be interesting to see a "cheap luxury" car with nice materials and features for around 25k. The thing that's taking over the industry these days are "affordable and sporty" but Acura and Mercedes have already started making their way into 'more' "affordable luxury."