Scion sales down 20%, but “we have the exact customer we want”

A chat with Scion Vice President Jack Hollis was probably the biggest ‘Let’s get something straight’ moment we had at the 2011 Detroit Auto Show. Sales were down 20 percent in 2010, the new 2011 tC didn’t get the warmest reception from its former proponents, and the perception is that Scion is losing a grip on its youth-oriented message. Hollis sought to address those points and more:

• “Some people have the impression that we’ve lost youth… but it’s about identical: the median age for the tC was 28 last year, now it’s up to 29. It’s still the youngest in the market.” As a brand, Scion has a median age of 41.5 years, up from 40.
• Scion’s sales were down 20 percent last year, but Hollis says that’s only the point “if volume is your goal.” He went on to say, “We could double sales, but we don’t rely on traditional incentives.” Sale prices remained non-negotiable throughout the recession and the only two cash incentives – $1,000 off for college students and military personnel – are handled through Toyota Financial Services. Hollis is more focused on “Who is the buyer you’re capturing? The average age of our buyer in a recession was under 30. We have exactly the buyer we want.” That means that “we lost numbers, not youth. That’s not a Scion problem, that’s an industry problem.”
• “The key tenet of Scion is to sell to people who have never purchased a Lexus, Toyota or Scion before.” Seventy percent of buyers of the first xA and xB had never bought into the Toyota group before, and Hollis says that although the second generations of both models were very different, they achieved the same percentage of first-time buyers. “It’s not my intent to have loyalty retention, but Toyota brand retention,” to get the buyer started on an investment in Toyota’s products.
• Still, volume is on his mind. “My goal is to increase sales.” The 2011 Scion tC had an 80 percent increase in Q4 last year compared to 2009, and “I have the tC all year this year.” Hollis expects sales better than last year, “absolutely,” and even to make gains on 2009 numbers.
• On keeping up the momentum, he’s admits that “Scion has got to find new ways to attract youth,” adding “I think Scion will take the lead.”
• If you have your eye on a Scion iQ, it’s “coming out in summer,” and you’ll be able to tweak it as you would any other Scion. There will be less customization possible than on a tC “on a percentage basis,” but the ethos remains, “when you bring out a Scion you need to have personalization.”