Automotive News - August 4, 2008 - (Page 18) 18 • AUGUST 4, 2008 Need Salespeople, Tech’s, Managers & Other Employees? The Auto Industry’s #1 Recruiting, Training & Marketing Company Salespeople~BDC~Detailer~Porter~Technician Body Tech~Service Advisor~Service Manager Parts Counter~Parts Manager~Sales Manager Finance Manager~Office Staff~GSM~GM SCION Funky brand goes into a funk continued from Page 4 percent in May but were down again in June. 800-421-4550 www.clickhereforadvice.com Brian C. Hall, President & CEO Why the slump? What’s going on? Well, online shopping of Scion is barely half of what it DO NOT BUY A NITROGEN SYSTEM… until you've talked to NitroFill. NitroFill combines high purity nitrogen with a customer retention and benefit program that's unsurpassed. Take a moment and call the company that started it all. Over 1,200 NitroFill dealers nationwide share our enthusiasm. was during the boom years of 2005 and 2006, according to industry analyst Compete Inc. At that time, Scion routinely attracted 100,000 to 120,000 Internet shoppers a month. Since the launch of the redesigned xB and xD last summer, Scion has scratched 60,000 Internet shoppers only once. And the number of 18- to 34-yearolds shopping the brand also has declined sharply (see chart on Page 4). “Scion is not attracting its targeted audience as well as it had in 20042005 and even as recently as 2006,” says Hal Wurster, managing director of Compete’s automotive practice. Jack Hollis, Scion’s vice president, acknowledges the challenges. But he says his measure of success is not sales numbers but whether Scion is luring new, young customers to Toyota. “How do we expand without making Scion into a traditional car company?” Hollis asks. “Experimenting with an automotive brand is tricky in a down market because it magnifies the risk. But if you don’t try anything, then you are just the same as the entire industry.” Says Jim Lentz, president of Toyota Motor Sales U.S.A. Inc. and the first vice president of Scion: “The original Scion goal was all about transparency and reducing time to purchase cars and vehicle personalization, and none of that has changed. Scion still remains relevant today.” Scion’s youthful demographic is aging as baby boomers looking for Toyota fuel economy are attracted to Scion’s xD. The rush to fuel-efficient cars is changing Scion’s demographic profile. Nielsen Online says online consumers perceive Scion as the secondmost fuel-efficient brand, behind Smart. Mainstream consumers increasingly are interested in Scion, says Julie Enzweiler, Nielsen Online’s automotive research director. Lots of baby boomers shopping Toyota for an econobox are drawn to the xD in the Scion corner of the store. Hollis says the average age of the xD hatchback buyer climbed from 37 years old to 42 in just three months. “Fuel economy made people look at the Yaris and Matrix,” he says, “but then they also see the xD and say, ‘Hey, what’s that?’ ” Angel Diaz, manager of Westbury (N.Y.) Scion, on Long Island, says an older crowd started shopping Scion when gasoline prices spiked. “Once they see what Scion offers in terms of equipment, and getting 32 mpg for $16,000, it becomes more widely accepted,” Diaz says. “It’s just not the edgy crowd coming in anymore. I’m a little concerned about that.” To slow the influx of older consumers to the xD, Toyota is launching a five-door Yaris in August. The Yaris and xD share the same platform, but the Yaris has been sold only as a three-door and a sedan. at his unclothed buttocks. Each episode has a fake Scion commercial starring McGee that mocks the stereotypical small-town car dealer. New products? Hollis says Scion needs another vehicle in the lineup. “A fourth product is essential,” he says. “It could be an SUV. It could be a hybrid. We want a fourth product that buyers of the other three Scions don’t like.” Whatever gets added, Hollis wants the sticker price to stay below $20,000. How much Scion’s lineup can expand will depend on whether Toyota continues to give it license to create products. Yoshi Inaba, who launched Scion as CEO of Toyota Motor Sales, says Scion risks having its product plan marginalized by the parent company. “Our second-generation products were not as free as we thought we would be,” says Inaba, who retired from Toyota to run the international airport near Nagoya, Japan. “The xB and xA successors are a similar concept, slightly bigger. We are coming into a normal model-change cycle, not doing anything faster, which I am not happy about.” Still, it is hard to argue with Scion’s success. More than 500,000 of the 600,000 Scions sold have been to people who never had been inside a Toyota store. More than 80 percent buy another Scion or move on to a Toyota or Lexus. Accessory sales per vehicle are double those for the typical Toyota. Lentz also is proud that the dealer body has kept the brands separate. “In the beginning, dealers weren’t sure about Scion’s menu pricing and the store-within-a-store,” he says. “But they gave it a chance, and even though we’ve had hot markets and cold markets, they have really stuck to the overall business.” The dealer body has expanded from what was to have been a boutique offering. On Jan. 1, 2005, Scion had 856 retailers. But as sales soared in 2005 and 2006, more dealers signed up. Currently, 982 of 1,234 Toyota dealers carry the brand. That has driven average sales per outlet down, but Toyota says it’s not worried. “It’s never been about the numbers,” Hollis says. Scion’s biggest risk may be that it is evolving into just another brand selling compact vehicles. “Scion was intentionally created to be different, but it has always had to work to stay separate,” says Bolain. “You don’t want to let the parent company dominate, but it can happen.” Adds Lentz: “It’s more of a battle now. We have to re-educate TMC on the reasons for Scion.” c Buyers getting older COPIED BY ALL. DUPLICATED BY NONE. www.nitrofill.com 1-877-246-3455 Some dealers say higher prices for the second generation of products hurt the brand with younger buyers. Toyota says the boxy xB and the tC coupe still retain a young customer base. Indeed, the coupe attracts the youngest buyer of any new vehicle — age 24. But the small xD hatchback is another matter. Aim at new target? Another concern: Should Scion continue to target its original customer base or look for younger buyers? “Today’s 23- to 28-year-olds are maturing into Toyota or Lexus,” says Yoshizu. “They don’t stay experiencers for the rest of their lives. If pop culture is going to change and always target 18- to 24-year-olds, then we need to change to appeal to them, too.” As a result, Scion is gently shifting away from its hip-hop music connection. A hip-hop offshoot known as electro is now commanding more attention from teens and college students — and, therefore, from Scion. The brand’s link to street art and student film will continue. Still, Dawn Ahmed, Scion’s corporate manager, says the brand can’t just walk away from its original buyers. “Being ‘your older brother’s car’ is not necessarily a bad thing,” says Ahmed, who left Scion to launch the Tundra pickup and has recently returned. Ahmed says Scion still seeks provocative ways to connect with young buyers. Recently, it has been the lone sponsor of the bizarre cartoon “Assy McGee” on the Cartoon Network’s late-night “Adult Swim” segment. McGee is a vulgar, gunslinging policeman whose body stops http://www.clickhereforadvice.com http://www.clickhereforadvice.com http://www.nitrofill.com http://www.webastoshowroom.com http://www.webastoshowroom.com
Table of Contents Feed for the Digital Edition of Automotive News - August 4, 2008 Automotive News - August 4, 2008 Losing leases: It hurts already Crisis at Chrysler: Buyers bail GM's really bad news: Its revenue Lincoln reworks bonus plan for dealers Pain spreads beyond Detroit: Nissan offers employee buyouts Mitsubishi changes dealer advisory board GM repeats employee discount program Ford merges brands' sales, marketing After 5 funky years, Toyota's Scion now finds itself in a funk It's a body, er, a bus by Fisher At Tech Center, form follows function Industry nemesis again turns up heat on climate Right products, diverse customers raise suppliers' profits Last-minute leases swamp Chrysler With leases off the table, Chrysler offers new sales incentives GM favors 4 endorsed vendors of dealer management systems GKN to supply F-150 FX4's differential For sale: 2 Metaldyne plants 1 week's notice: Chrysler dealers deserved better Get used to the roller coaster That 1934 Reo had a clutch pedal We sell what the public wants Decision makers can't use hindsight Detroit's truck trauma is self-inflicted Why won't consumers buy Detroit cars? Speaking of ads, don't overlook VW Software helps dealers manage parts Service survey: Customer satisfaction rises Researcher: Vehicles can prevent crashes Personnel Microsoft will offer Live Search Dealers Picture This Nissan offers buyouts to its Tenn. workers Lincoln-Mercury exec joins Kia Kaline out at Ford Penske earnings drop slightly Asbury will move; profits slip S&P downgrades American Axle Best sales news: July is over Now THAT'S resale value ... Sirius-XM satellite radio deal: A mixed bag Don't be misled by Chery's sales; it's a key player McCurdy applies some political (tire) pressure A star is born: The saga of the shrinking sticker Our flag is still there Obama-mobile? Or McCain-carrier? Automotive News - August 4, 2008 Automotive News - August 4, 2008 - (Page Intro) Automotive News - August 4, 2008 - GM's really bad news: Its revenue (Page 1) Automotive News - August 4, 2008 - GM's really bad news: Its revenue (Page 2) Automotive News - August 4, 2008 - Ford merges brands' sales, marketing (Page 3) Automotive News - August 4, 2008 - After 5 funky years, Toyota's Scion now finds itself in a funk (Page 4) Automotive News - August 4, 2008 - After 5 funky years, Toyota's Scion now finds itself in a funk (Page 5) Automotive News - August 4, 2008 - Right products, diverse customers raise suppliers' profits (Page 6) Automotive News - August 4, 2008 - Right products, diverse customers raise suppliers' profits (Page 7) Automotive News - August 4, 2008 - With leases off the table, Chrysler offers new sales incentives (Page 8) Automotive News - August 4, 2008 - With leases off the table, Chrysler offers new sales incentives (Page 9) Automotive News - August 4, 2008 - For sale: 2 Metaldyne plants (Page 10) Automotive News - August 4, 2008 - For sale: 2 Metaldyne plants (Page 11) Automotive News - August 4, 2008 - Decision makers can't use hindsight (Page 12) Automotive News - August 4, 2008 - Decision makers can't use hindsight (Page 13) Automotive News - August 4, 2008 - Speaking of ads, don't overlook VW (Page 14) Automotive News - August 4, 2008 - Service survey: Customer satisfaction rises (Page 15) Automotive News - August 4, 2008 - Personnel (Page 16) Automotive News - August 4, 2008 - Dealers (Page 17) Automotive News - August 4, 2008 - Dealers (Page 18) Automotive News - August 4, 2008 - Picture This (Page 19) Automotive News - August 4, 2008 - Picture This (Page 20) Automotive News - August 4, 2008 - Picture This (Page 21) Automotive News - August 4, 2008 - Picture This (Page 22) Automotive News - August 4, 2008 - Picture This (Page 23) Automotive News - August 4, 2008 - Nissan offers buyouts to its Tenn. workers (Page 24) Automotive News - August 4, 2008 - S&P downgrades American Axle (Page 25) Automotive News - August 4, 2008 - S&P downgrades American Axle (Page 26) Automotive News - August 4, 2008 - Best sales news: July is over (Page 27) Automotive News - August 4, 2008 - Best sales news: July is over (Page 28) Automotive News - August 4, 2008 - Best sales news: July is over (Page 29) Automotive News - August 4, 2008 - Obama-mobile? Or McCain-carrier? (Page 30) Automotive News - August 4, 2008 - Obama-mobile? Or McCain-carrier? (Page 31) Automotive News - August 4, 2008 - Obama-mobile? Or McCain-carrier? (Page 32)
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