February 3, 2016 / 3:05 PM / 4 years ago

Toyota pulls the plug on Scion small car brand

(Reuters) - Toyota Motor Corp (7203.T) said on Wednesday it will wind down its Scion brand in the United States, ending a 12-year effort to create a separate identity for small cars aimed at young buyers.

Special 10th anniversary editions of the Toyota Motor Corp. Scion vehicles are unveiled at the New York International Auto Show in New York, March 28, 2013. REUTERS/Lucas Jackson

Toyota said it will start rebadging three 2017 model Scion cars as Toyotas starting in August. The Scion tC small coupe will go out of production in August, Toyota said.

Scion sales peaked at 173,034 vehicles in 2006, but have trended down since. Toyota sold 56,167 Scion vehicles in 2015, a decline of 68 percent in a U.S. market that favors larger sport utility vehicles and trucks.

Fiat Chrysler Automobiles NV said last week it would phase out production of its Dodge Dart small car and mid-sized Chrysler 200 sedan, and seek partners to produce replacements, because profits for the smaller cars had evaporated.

Toyota said it had no plans to scale back small car sales.

Toyota established Scion as a separate brand for a series of models originally designed for the Japanese market. The brand, sold through Toyota’s U.S. dealer network, had an early hit with a small, boxy micro-wagon called the xB.

More recently, Scion’s successful FR-S sporty coupe harkened back to iconic Toyota cars such as the Celica of the 1970s. The FR-S will be rebadged as a Toyota.

Toyota used Scion to test efforts to attract more young buyers, at a time when some core Toyota brand models tended to appeal to customers cruising into retirement.

Half of Scion buyers were aged below 35, a group which accounted for 27 percent of Toyota sales and was expected to grow, the company said.

“Scion has allowed us to fast-track ideas that would have been challenging to test through the Toyota network,” Toyota North America Chief Executive Jim Lentz said in a statement. Lentz was the founding vice president of the Scion brand.

Efforts to target young buyers would not end with Scion, but would transition to the Toyota brand, executives said.

A spokeswoman said Toyota would realize “efficiencies” from not having to promote a separate brand, but declined to provide figures.

Additional reporting by Alexandria Sage; Editing by Nick Zieminski

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