Coming Product Volley to See Scion Sticking to Its Guns

NEW YORK – Scion boss Doug Murtha says the first of three new models coming in 2015 will not mark a radical change for the edgy, youth-oriented unit of Toyota and suggests a U.S. product dearth that stretched upwards of seven years will not repeat itself.

Scion previously has talked about a need to re-energize the brand, perhaps with pricier, luxury-leaning models just beneath the lowest-cost product at sister brand Lexus. That does not appear imminent for a brand traditionally focused on the more affordable end of the B- and C-segments in the U.S.

“There’s no intention to radically shift the direction of the brand,” Murtha says, confirming the first new model from Scion will be unveiled at the Los Angeles auto show in November.

“These aren’t midcycle refreshes of anything in the lineup,” he adds. “They are three major changes.”

Scion could use a recharge to its portfolio.

U.S. sales of its products reached 173,034 units in 2006, four years after its launch. Last year Scion sales sputtered to 68,321 vehicles, down 7.1% from like-2012, according to WardsAuto data. Sales through March are off 11.7% to 14,457 from 16,377 in like-2013.

Both the signature xB and smaller xD spin-off are 7 years old. The 4-year-old tC compact car represents its newest mass-appeal product. The FR-S celebrates its 2nd birthday this year, but the sports coupe is meant to be a niche model. The tiny iQ, 3 years old in the U.S., has been a sales dud.

Murtha admits sacrifices were made in the 2009-2010 timeframe as Toyota dealt with an image-bruising recall and recession-weary buyers in the U.S., as well as a crippling natural disaster back in Japan.

“We had a number of things hit us at the end of the last decade that forced some trade-offs and Scion had to understand that we would be on the short end and it would have some impact on our product cadence,” he tells WardsAuto in an interview here.

But, he adds, Scion’s parent is not giving up on the brand. “We’re getting the investment we need. We just have to manage through this period we knew was coming.”

Murtha says future Toyota investment will hinge on finding product development partners within the automaker elsewhere in the world to reduce the cost of bringing new vehicles to market at a brisker pace.

“You need scale, you need friends,” he says. “We’re looking to Europe, we’re looking to Japan (and) we’re looking to other markets to find products of common interest.”

It does not appear Scion’s new products will benefit out of the gate by a suite of 14 new small gasoline engine variants planned for Toyota products beginning in 2015. The engines are expected to boost fuel efficiency of Toyota vehicles by 10%, yet they will come at the tail end of Scion’s vehicle volley.

“The timeline on that technology coming to market is different than the products we have coming,” he says. “Are we interested in the future? Absolutely.”

Murtha, however, does not entirely rule out a pricier, or even cheaper, Scion model sometime down the road. The FR-S hit the brand’s Generation Y demographic squarely, he says, despite pricing north of $25,000. The iQ, meanwhile, proved Scion was willing to take a risk and the program offered managers valuable lessons.

“That’s one of the nice things about the nature of the brand,” Murtha says. “We get a free pass to try new stuff.”

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