Scion Banks on Long-Term Profits

Toyota Motor Corp.'s new Scion line of priced-to-sell, youth-oriented vehicles may not be a sure-fire money-making venture for the auto maker.

“Define ‘profitable,'” says Jim Farley, who was promoted to vice president of Toyota's new Scion division last month. Farley confirms Scion will cover Toyota's initial investment — which he declines to disclose. “We can do it.”

But Scion, which launches in California in June 2003 with two new subcompacts directed at the sizable Generation Y, is a long-term investment that Farley is sure will pay off handsomely.

Generation Y, which Scion defines as consumers currently aged 8-22, will grow to rival the Baby Boomers in buying power. By 2010, the 63 million members of Generation Y will comprise 25% of total vehicle sales, a number that will increase to 40% by 2020.

And this group, accustomed to prosperous times, is said to put a high premium on luxury and consumables. The first Scion vehicles are promised to be nicely equipped at under $17,000.