Scion Seeking Return to 100,000 Sales Annually

LAS VEGAS – Scion doesn’t expect to match its 173,034-unit sales record set in 2006 anytime soon, barring a return to the heady days of the mid-2000s. But getting back to 100,000 annual deliveries, double last year’s volume, is doable for Toyota’s youth brand, a top brand official says.

“I think that is a likely occurrence,” Jack Hollis, Scion vice president, tells WardsAuto in an interview here.

“Past that, it’s going to be mostly about the market size,” he says. “Obviously, if the (U.S. light-vehicle) market goes back to 16.5 (million units annually) or pushes 17 (million) all boats will rise, and I’ll be happy to participate.”

Scion hit all the right buttons in 2006, Hollis says, including being heavily marketed in major metropolitan areas where young people were experiencing little unemployment.  “I don’t see that happening (again) for a long time,” he says of the healthy economic scenario.

For 2012, Scion is calling for a 40%-50% sales increase from 2011’s 49,271 units, due to incremental growth from two additions to its lineup: the recently launched iQ subcompact and upcoming FR-S sports car, on sale June 1.

Additionally, Scion will replace its aging xB and xD models with unnamed new vehicles in 2014 or later, which should further boost volume.

But knowing who is buying Scions and what strategies dealers are using to sell the brand is more important than sales figures, Hollis contends. However, he acknowledges boosting volume would be beneficial for Scion’s 995 U.S. dealers, many of whom sell just a handful of vehicles each month.

Projected 2012 sales of roughly 70,000 units means each Scion dealer would sell about 70 vehicles this year, or six cars a month. “Optimally, I still would like to see (volume) a little larger than that, mostly because I want to have the dealers’ full engagement and commitment to Scion,” Hollis says.

The Scion chief takes pride in the fact that even during the brand’s lean years – deliveries bottomed out in 2010 at 45,678 units, WardsAuto data shows – dealers did not divest their franchises.

Dealers may sell only one Scion a month, “but they’re still invested,” Hollis says. “They don’t have to stay in. We’re not making them stay. It’s all voluntary. So the fact they are there means there’s something about (the brand that’s) still intriguing them, and they want to stay in.”

Hollis says Scion dealers are doing “a consistently good job” of keeping with the brand’s no-haggle, pure-pricing directive.

Since its 2003-2004 launch, the brand has offered both port- and dealer-installed accessories for most of its models. “Overall, what we’ve maintained is a little over $600 of accessories for new vehicles, wholesale, which is about three times the average in the industry,” he says.

Older models tend to have more dealer-installed accessories, while the newer models, such as the iQ, see a higher ratio of factory-installed options.

But Hollis thinks that situation will be reversed with the upcoming FR-S, explaining dealer-installed factory accessories, as well as third-party accessories offered through dealers will be more popular.

“I think you’ll see a large increase (in dealer-installed options) or relationships with local suppliers, and I think that’s great for the industry,” he says. “I’d like to see (Scion) being influential on the auto industry and mom-and-pop shops. I’d love to see that push them to continue to grow.”

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