Scion Won’t Shoot for 200,000 in 2006

DETROIT –Tallying up an impressive 156,485 units in the U.S. last year, Toyota Motor Corp.’s Scion youth brand is not setting its sights any higher for 2006.

Scion Vice President Mark Templin tells Ward’s in an interview at the North American International Auto Show here that the brand won’t be targeting 200,000 sales this year for fear it would lose some of its niche appeal.

“No, that’s not our intention,” Templin says of the possibility of reaching that volume.

New limited-edition xB 3.0 Series.

“We’re going to basically try to do exactly what we did last year,” he says. “The 150,000-range is where we want to be. We want to try and grow the strength of the brand without growing the volume.”

Templin says he hopes that doesn’t mean interested buyers will be turned away. Scion did not intend to sell more than 150,000 units in 2005, he says, but Toyota’s renowned flexible manufacturing system was able to meet customer demand for the brand’s three models: the xA, xB, and tC.

“I don’t know how they worked their magic, but they got us the cars we needed,” Templin says. All three models are built at Toyota plants in Japan.

Templin says Scion is not yet discussing the possibility of North American production.

“I’m not saying it won’t happen in the future, but right now it’s not on the radar screen,” he says.

He also doesn’t rule out a fourth model, but says that is not something Scion will have anytime soon.

Any new Scions likely would be based on vehicles Toyota already sells elsewhere in the world. The xA and xB are derived from the Japan-market Ist and bB, respectively.

“As we go forward, I don’t know we’re going to build a lot of cars that are unique to our marketplace,” Templin says.

Scion’s strategy will continue to be to keep certain models in its lineup and replace others altogether.

“We’ll have some models that will just go away, and we’ll have new models that will come in,” Templin says. “I think that strategy is still in place.”

Ward’s data forecast chart indicates the xA may be discontinued after the ’08 model year, replaced by a sport wagon model based on the Toyota Matrix. (See related data: Ward’s North America Product Cycle Chart )

Templin discounts a suggestion Scion is not pleased with the xA’s performance. Although it is the lowest-volume vehicle in the lineup, he says it has the fourth fastest turn rate of any Toyota car, after the Prius hybrid-electric car and Scion xB and tC.

Meantime, Scion is trying to maintain market interest by selling limited editions of its existing vehicles and by making new accessories available.

The just-released Scion xB 3.0 Series will have a run of just 2,200 units. It sports an exclusive Envy Green paint job, an Alpine audio system and DVD entertainment system with headrest monitors. Buyers also get three free months of XM Satellite Radio service.

On the accessory side, a new supercharger for the tC is drawing interest, Templin says, but take rates are low because buyers cannot include the cost of the supercharger in with their vehicle financing.

As for advertising, Templin says there will be less TV and more interactive and event marketing, as word of mouth is quite strong just one-and-a-half years after the brand’s national rollout.

“Seventy five percent of the people under 35 years old know all about Scion now,” he says, adding it is one aspect of his current job that is similar to his previous position as head of marketing for Lexus in the U.S.

“The reason Lexus was successful, in my mind, was the word of mouth they generated in the beginning,” Templin says.

“People that bought the product loved the product and loved the dealership experience so much that they told everybody about it. And everybody else came and wanted to buy a car. That’s what’s happening at Scion. The owner engagement is unbelievable.”

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