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Old 11-10-2006, 05:00 PM   #1
NYCshopper
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Default Toyota Plans to Cut Scion Production to Keep Brand Unique

Toyota Plans to Cut Scion Production to Keep Brand Unique

http://online.wsj.com/article/SB116313070935919553.html



Quote:
A Way Cool Strategy: Toyota's Scion Plans To Sell Fewer Cars

Scion, Toyota Motor Corp.'s youth-focused small-car brand, has decided it is too hot for its own good.

The brand is on track to beat its 150,000-car-a-year sales goal by 25,000 vehicles in 2006. That is a big reason why Toyota has surpassed DaimlerChrysler AG this year to become the No. 3 auto maker in the U.S. in sales.

But instead of riding that momentum to increase sales still further, Scion plans to throttle back production to keep sales from going above 150,000 vehicles next year. It is part of marketing strategy to keep the brand special and, above all, cool.

Lyly Lao, who works in sales at West Covina Scion in California, approves. "I agree with the strategy," she says. "Everybody is trying to be different, so it's important for Scion to not put too many cars out there, or they will be everywhere."

Scion also plans to retire the tiny xA hatchback and the current generation of the boxy xB wagon, dubbed "The Toaster" by some fans. Sales for both models are up about 20% for the first 10 months of this year, according to Autodata Corp. The xA is gone, but the xB will return in a next-generation form, although Scion would not disclose details about the new model, which will be introduced next year.

To better position it as an "underground" brand, Scion over the past year has reduced its television advertising -- never very significant to begin with -- to a narrow range of late-night and obscure programs, like shows on Cartoon Network's late-night "Adult Swim" programming. (On the Oct. 29 episode of "Frisky Dingo" on "Adult Swim," a Scion tC was talked about by the show's characters.) Now it is re-evaluating that strategy and may completely get rid of television advertising so it can focus more on experiential marketing, including event marketing and branded entertainment. Scion already launched its own music label for emerging artists and its own clothing line called Scion Release.

Simon Needham, co-founder of Scion's agency ATTIK, says that in today's digital-recorder age, traditional television commercials aren't very effective and are even less so with Scion's target audience. "I literally TiVo everything so I don't even watch my own commercials," he says.

Scion is so concerned about being up to the moment and beyond that it has moved its online social-networking marketing focus from myspace.com to secondlife.com because it viewed the News Corp. property as too mainstream. "Because we no longer have to focus on brand awareness, we can be even more edgy and more risky," says Mark Templin, vice president of Scion.

George Peterson, president of marketing research firm AutoPacific Inc., applauds Scion's moves but questions whether dealers will support Scion's sales decision to put a lid on sales. Mr. Peterson estimates Scion could sell as many as 250,000 vehicles a year if the brand lifted production controls.

"How can you get off the drug when you have really popular cars like the xB?" Mr. Peterson asks. "It's a bold strategy because it will be tough to hold their volumes."

Ms. Lao of West Covina Scion says her dealership has waiting lists for Scion vehicles. "We are selling them as soon as we get them," she says.

She also knows that Scion dealers are helped by the additional profit gained from the sale of accessories. Most Scion buyers customize their vehicles, and Ms. Lao says many of the dealer's customers come to the store once a month to purchase a new after-market product such as body-side graphics and roof racks for snowboards or bikes.

For Toyota, Scion's importance isn't so much added volume as it is bridging the gap to younger buyers who consider the company's mainline Toyota brand vehicles too stodgy. About 80% of people who buy a Scion have never had a Toyota. And when Scion owners trade in their vehicle, eight of the top 10 vehicles they opt for next are either Scions or other Toyota models.

In its continuing efforts for ultimate coolness, Scion has been concentrating on developing a presence on secondlife.com, an online 3-D world that is created and owned by secondlife.com users, who are represented by avatars. But now, General Motors Corp.'s Pontiac brand has discovered secondlife.com and has created Motorati Island, which offers users a place to build a car culture in the online community.

Mr. Needham of ATTIK says it's a "24/7 headache" to constantly come up with the new thing that most people haven't heard about yet. "Today it's cool, but tomorrow it's not," he says. "So we have to move that quickly to retain credibility. As soon as I start hearing about something too much, I'm over it."

But Mr. Needham says the challenge is tempered by Scion's Mr. Templin, who "has the guts to put his feet into something that might not work."
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Old 11-10-2006, 05:04 PM   #2
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Whatever regarding the marketing, but it's no surprise the xA is getting the axe. $20 says that means we'll see a 5 door Yaris by the time that happens.

Hey, Scion - if you wanna be really cool and unique, give us a RWD version of the tC!
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Old 11-10-2006, 06:27 PM   #3
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I love it Toyota is actually voluntarily reducing production numbers because they are sell too many car.

The big three should take note....they can barley give away some of their models.
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Old 11-11-2006, 01:29 AM   #4
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Quote:
Originally Posted by karandom View Post
I love it Toyota is actually voluntarily reducing production numbers because they are sell too many car.

The big three should take note....they can barley give away some of their models.
The big 3 can't change platforms that quick. Most of their platforms are different.

I don't know for certain but I believe the xA & xB share the same basic platform so was easier and smarter for them to do it that way from an economic standpoint. I'm sure they'll continue the xA/B architecture on their next offerings. I'm interested what they come out with for replacements. I'm hoping the tC gets phased out soon as well, it's already dated looking IMO.

Another +1 for Toyota.
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Old 11-11-2006, 03:22 AM   #5
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Just to increase prices...kind of like the Mini.
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Old 11-11-2006, 03:28 AM   #6
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It will be cool to see this happening to the imprezas. Keeping them specials and rare!
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Old 11-11-2006, 07:39 AM   #7
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back in the 80s toyota have rwd platform now they are all ff

i wonder why

is it really that much expensive to build rwd compare to fwd
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Old 11-11-2006, 08:01 AM   #8
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Quote:
Originally Posted by NismoSkylineGTR View Post
back in the 80s toyota have rwd platform now they are all ff

i wonder why

is it really that much expensive to build rwd compare to fwd
More parts are involved with a rwd, so yeah it does cost more but who knows how much.
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Old 11-11-2006, 09:45 AM   #9
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Toyota does have RWD platforms, the IS, the LS, and the GS. Of course, those are released under the Lexus nameplate.
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Old 11-11-2006, 05:39 PM   #10
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Originally Posted by blokespeed View Post
More parts are involved with a rwd, so yeah it does cost more but who knows how much.
Besides cost RWD is also heavier than FWD. And we all know weight is the enemy of all things related to performance. FWD is also better for winter driving than RWD. The advances of traction/stability contorl kindda neutralizes this advantage though.
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Old 11-12-2006, 12:08 PM   #11
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Gas mileage is usually better on fwd also.
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Old 11-12-2006, 01:53 PM   #12
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Quote:
Originally Posted by chenc544 View Post
Besides cost RWD is also heavier than FWD. And we all know weight is the enemy of all things related to performance. FWD is also better for winter driving than RWD. The advances of traction/stability contorl kindda neutralizes this advantage though.
But with RWD you can better arrange the driveline parts to provide a more ideal weight distribution. With FWD your more likely to have the entire engine and driveline in front or on top of the front axle.

Another enemy of all things related to performance is that with FWD, when you accelerate hard, you transfer weight off of the drive wheels.

Its obvious why Toyota builds the Scions the way they do. But I think all Japanese car makers are missing the 'drift' craze by not offering something cheap and RWD.
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Old 11-12-2006, 02:01 PM   #13
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how much did scion advertise from a money standpoint? and how the hell can't subaru sell that many cars that fast? the product is there.. is it just bc they're ugly?
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Old 11-12-2006, 02:45 PM   #14
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Quote:
Originally Posted by only1agam View Post
how much did scion advertise from a money standpoint? and how the hell can't subaru sell that many cars that fast? the product is there.. is it just bc they're ugly?
Being ugly certainly didn't keep Toyota from selling all those ugly xBs.
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Old 11-12-2006, 02:49 PM   #15
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I think the biggest reason for the popularity of FF is its packaging advantage. FF in general allows you to have larger interior dimension compared to FR for a given exterior dimension. This was how MINI revolutionalized the small car back in the 60's, and it is also why BMW 1-series has been harshly criticized for its miniscule leg room in the back.
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Old 11-12-2006, 02:53 PM   #16
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Toyota mighth lack creativity in their cars, but they sure are smart in terms of marketing and sales...
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Old 11-13-2006, 01:07 AM   #17
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makes sense.


i'm going to make a brand to compete with toyota/scion. it'll be called "everybody drive the same thing'
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Old 11-13-2006, 03:00 AM   #18
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Scion will lose that cool factor with the youngin's if it doesn't make something performance oriented. Does Toyota not remember the dearly departed Celica? Looked young and fast but couldn't get out of its own way. Get something performance oriented Scion or you'll be a brand for girls and older people looking for a good value (average xA buyer is 36).

OH and btw... they say the cars are getting the axe... the xB was introduced in Japan in '99 It's already on its's second generation there. Funny how toyota can release a car that's an entire generation behind and Americans go crazy over it... *sigh. Getting the axe is marketing speak for "the car has only been available for 3 Model Years in the US, but we can't hide the fact that it's old technology"
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Old 11-13-2006, 09:57 AM   #19
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Actually, it's just the xA getting the axe. The article says the xB will be re-released but no further details were disclosed. I will be attending a Scion event next month in Miami Beach which is believed to be the first release of the "new" xB, or possibly another Scion model.
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Old 11-13-2006, 10:20 AM   #20
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Has anybody noticed that if you are ever behind a really slow car, its a toyota. THey are the prefered brand for senior citizens. They are the new Buick. Seems the elderly need safe reliable transportation.

Just keep in mind, that if Toyota does not reinvigorate their brand on the bottom end, they are going to lose their younger demographic, and while that wont hurt them now, 10 years from now it will...
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Old 11-13-2006, 10:25 AM   #21
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as an xb owner i'm glad to see this...
i feel the car, love it or hate it, may become a classic
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Old 11-13-2006, 11:48 AM   #22
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Quote:
Originally Posted by emissman View Post
Actually, it's just the xA getting the axe. The article says the xB will be re-released but no further details were disclosed. I will be attending a Scion event next month in Miami Beach which is believed to be the first release of the "new" xB, or possibly another Scion model.
Scion has stated that both models will be replaced. The article is assuming (rightfully so) that the xB will be replaced by the current generation bB.
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Old 11-13-2006, 12:12 PM   #23
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great idea of limiting production.

I wish subaru would do that with the high end Imprezas, Id gladly pay more for a car that I didnt see every other stoplight being driven by a 17 year old whose parents paid for it.
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Old 11-13-2006, 01:24 PM   #24
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Quote:
Originally Posted by pjhe View Post
as an xb owner i'm glad to see this...
i feel the car, love it or hate it, may become a classic
.. just like the Dodge Omni.

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Old 11-13-2006, 01:31 PM   #25
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unique???? LMFAO.

Toyota is not about unique or niche products...in case they forgot they make competitively priced mass marketed cars. Good luck trying to fool people into thinking a Scion is a coveted car to own, they are on the low end up Toyota's lineup.

cefoskey- jealousy isn't a good look for anyone, try to be a man and realize life ain't fair, stereotyping people you don't even know its pathetic. (btw i don't fit into that group, just sick of sreing people b1tch and moan)
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