Special Coverage

New York Int’l Auto Show

NEW YORK – Jack Hollis, vice president-Scion, Toyota Motor Sales U.S.A. Inc., expresses no reservations over launching the new-for-’11 iQ microcar early next year despite flagging sales for the vehicle’s principle competitor.

“We think this is the perfect time for the iQ,” Hollis tells Ward’s here after introducing the iQ and a replacement for the tC coupe.

But U.S. sales of Daimler AG’s Smart brand, which two years ago became the region’s first entry in the minicar segment, are sagging. After selling 24,662 units in 2008, the auto maker delivered just 14,595 in its second year – a decline of more than 40%, according to Ward’s data.

“(The iQ) is a much more substantial car, it’s a lot more flexible,” he says. “The 3-plus-1 seating is absolutely astounding.”

The iQ’s front seats are slightly offset, enabling an adult to sit behind the front-seat passenger while “a child, small package or pet” can sit behind the driver. The feature carries over from the iQ concept Hollis introduced a year ago in New York.

Hollis also argues the iQ will draw a more accurate comparison with BMW AG’s Mini brand. As Mini’s product line has expanded, so has its sales. Since launching in 2002, it has posted only two years of year-over-year sales declines – a 4% shortfall in 2006 and a 16% dip last year.

“(The iQ) answers that inner-city question of having friends and doing things together a lot differently than other cars in the market,” he says. “We will define the segment. A premium micro-subcompact segment will be created.

“The timing is right also because you are seeing an acceleration of people moving back into the city,” he adds.

Hollis anticipates sales of 20,000-25,000 units annually for the iQ.

As for the tC, which launches in the fourth quarter as an ’11 model, Hollis foresees sales of 40,000-50,000 units annually. Scion enthusiasts eagerly have been awaiting a new tC, which has gone six years without a redesign.

Hollis admits six years without a refresh left the sporty subcompact long in the tooth.

“The most hurt demographic in the entire economy has been that youth buyer,” he says.

The average age of the tC buyer is just 25 years, the lowest of any vehicle in any segment in the U.S.

“It’s a natural outcome of economic factors,” he says. “The car and its timing are exactly right at the end of this summer.”

With the iQ, Scion’s product line expands to four vehicles, and Hollis leaves open the potential for another vehicle, perhaps a small truck, in the near future.

“We will expand in the future, but it has to be in areas that either Toyota, Lexus or Scion has not tapped into,” he says. “And it’s got to be driven by the customer, as we see new needs. We will look for that, because I think we can answer that in a very quick timeframe at Scion.”

Hollis believes the iQ and new tC could double Scion’s sales next year to more than 100,000 units.