Baby Boomers drinking from automotive fountain of youth
George Bernard Shaw once famously opined that “Youth is wasted on the young." And while the Irish playwright and Nobel laureate’s wry observation may have any number of modern-day examples, the car market apparently isn’t one of them.
According to the Associated Press, baby
boomers are cottoning on to models earmarked for Generation X and Y consumers with remakable rapidity. Scion xBs, Honda
Elements, Chrysler PT Cruisers, and other youth-targeted vehicles are being filled not with off-road skateboards and
pony kegs, but potting soil and antique rolltop desks.
But hey, a sale is a sale, right? Well, that’s the company line being spouted by many of the affected automakers, but one has to wonder if it doesn’t hurt a brand like Scion’s ‘street cred’ to see geriatrics rockin’ the (x)Box. Scion boasts the youngest average owner of any major manufacturer, but it’s still decidedly higher than the company had hoped for at 39 years-old. Honda’s funky Element charts even higher at age 43.
This all begs the question: is the creation of an entire new division (like Scion) with its attendant fiscal obligations (distinct infrastructure, R&D and marketing costs) worth the trouble? Certainly Scion has added to Toyota’s coffers, but would the money have been better spent adding new products to the Toyota brand, with its larger dealer network and lower cost structures?
I hesitate to say “I told you so,” but…
[Source: The Associated Press via AZCentral.com]
Reader Comments (Page 1 of 1)
nick 7:50PM (12/28/2005)
I don't think Scion is as distinct as you think. The dealer network is a subset of the Toyota network, and the marketing/infrastructure is merely a department of Toyota Motor Sales in Torrance, CA. It's definitely not a unique brand in the same sense that Lexus was.
I think the biggest innovation that Scion has brought to the table is the way they manage inventory. Scion dealers keep minimal inventory on the lot, but they have the cars shipped to the port where they can be optioned out exactly as the customer wants them and shipped in a week. I think a wait time of a week is completely reasonable for someone who wants an exact color or configuration. Contrast this with domestic automakers and their inability to process a custom order with any speed-- a custom F150 can take months to arrive at the dealer, usually the customers give up and settle for what's on the lot, which in turn forces dealers to keep a wide variety of inventory.
Most of the japanese brands constrain choice which allows them to be more efficient and increase both content and profits, but limits the consumer's ability to choose.
I think Scion will position Toyota well once the economy rebounds and we see young people with money again.
Reply
JEziquiel 8:16PM (12/28/2005)
I think the creation of a new brand is a wise move for introducing these new models. While Honda has had success moving its Element within the Honda showroom, I think the Scion elements of no-haggle pricing, specialized dealer attention, and unique marketing helped catapult into the conciousness of all its buyers.
Had Toyota introduced the Xb as a new Toyota, many would have questioned: "How is this related to a Camry?" and "shouldnt I just buy a Corolla or Rav4 instead?"
Creating a new brand as deftly as Toyota has done with first Lexus then Scion has allowed its core corporate values of reliability, quality and ease of use to carry across into niches that the using the name Toyota alone might not have.
The extra training Toyota corp used to prep its dealer network for the Scion mindset also has worked wonders for showroom traffic. People of all ages have many preconceptions of dealership experiences. While the name Toyota on a product may have a halo effect on the car itself, the treatment expected in sales offices is often rooted in 1980's sales experience.
A new brand with a promise of an improved showroom experience might be cheaper to implement than broad-brush retraining of ALL toyota sales staff countrywide.
Of course these are all conjectures, I cant produce any facts or figures supporting my hypothesis. However I do strongly believe that creating a brand within a broader brand sphere, with all the inherent costs can be a very wise move if rooted in unique product first, a special and different sales experience second.
Reply
rw 8:18PM (12/28/2005)
Seems to me the manufactures covet a group of buyers that can't buy their vehicles working for Whole foods and Starbucks. Making a whopping $8.50 an hour is not going to buy you a Scion. A used car yes not a new vehicle.
Reply
creampop 10:12PM (12/28/2005)
#2, I didn't know that Scion's guerilla marketing extended to Autoblog.
Reply
Peter 12:11AM (12/29/2005)
Looking at the average age of buyers for Scion (and other brands) can be somewhat misleading due to parents buying vehicles for their children.
Reply
Jeff Farmer 1:39AM (12/29/2005)
Yeah, they do attract a lot of older buyers, just ask my 70 year old father in law and 65 year old mother in law.
It kind of confirmed my original accesment that the xb looks like a 2000's version of a 70's good time van (only a little smaller).
Reply
Ted K 2:27AM (12/29/2005)
scion is just plain silly
it really shows how much americans are caught up in image. what's the functional different between a popular scion and a sales dud echo? not much!
Reply
Billy Barnes 3:07AM (12/29/2005)
$cion is more like it...I agree with the guy that mentioned most of the young people Toyota markets to dont make "Bank." Plus, my local Toyota dealership is way too agressive...I had 8 salesmen jump on me on a Sunday! I said forget their drooling and I went and bought a Mazda.
Reply
Rutger 3:20AM (12/29/2005)
I agree with what mr. #2 is writing, but at the same time I think it proves another point. Old-School-Marketing is dead. People nowadays understand the tricks being played on them and the whole charade that goes with it. They play along if it helps them, they don't play along if they think they're being treated as idiots.
Older people deciding that a Scion is what they like is mainly displaying that any good product needs a soul. Something put in there by people with their noses in the same direction trying to make something that stands out. And you have no control over who is going to connect with the end product. A lot like love.
Reply
Scion Fan 6:56AM (12/29/2005)
I agree with #2 concerning Lexus. It was definitely right to found a new company to sell luxury cars, as buyers in this class would never have bought a Toyota.
I'm not so positive with Scion. I think what rather makes it is the marketing system, but not the inauguration of a new company itself. To my mind, the Scions aren't that far away from Toyota's line-up (look at the upcoming Yaris, and the previous Celica) that they wouldn't fit in it. But what really cuts it is the idea of enabling buyers to individualise their car from the factory. If Toyota had been able to do this in its own showroom, I believe it could have done without opening a new company.
Reply
Artie43 7:41AM (12/29/2005)
It looks to me like Scion is a real winner. I really like the XB for its' interior room and ease of entry/exit. For us senions it is a very desirable car. Generally I dislike Toyota dealers the most. They have been spoiled by Toyota's success. However, I just bought a HOnda. I think most people buy what they want from whatever manufacturer they want. The old loyalty to one brand I think is gone. There are just too many good choices out there.
Reply
OldCarDog 9:37AM (12/29/2005)
When I was a mere pup in the business, Toyota was the brand that they want Scion to be now. Cheap, reliable, and a little different than a run of the mill Chevy or Ford. When Toyota climbed the price ladder I suppose they needed to create a new brand to stay in the original game. I kind of agree with rw in post #3 though, the hip young crowd I see really is more likely to buy a 10 year old Audi than even consider going new.
Reply
Matt Gabriel 10:17AM (12/29/2005)
I don't think the Yaris are going to do too well. Part of the reason why some of these older people are buying Scions is that while they want something practical and frugal, they also want something that isn't scraping the bottom of the barrel. Scion's xA, xB and tC aren't that far apart in pricing, and the tC isn't a lot bigger and more prestigious than the xA.
An Echo is a signal that you can't afford to do better. The Yaris will be seen the same way. A Scion is a signal that you're frugal and practical and a little bit fun.
Reply
klaatu 10:53AM (12/29/2005)
Hint to Toyota: Teach the minority of your dealers who haven't "gotten it yet" that people buying Toyotas and Scions want to be treated just as they are in the Lexus showrooms, and adopt "no hassle/no haggle" pricing a la Saturn - even if it takes a slight price cut on some lines.
I don't haggle over pricing on an HDTV, or a leather living room set, for two expensive examples. I shop for what I want, look for quality and value (including the real price) and don't haggle. The winning combination gets my biz, the others - don't.
People are SICK AND TIRED of the "games people play" at car dealerships while trying to sell vehicles. It's been over 100 years of much the same horse-trading bullsh!t and well past time for a change.
Toyota (and their new part-owned partner Subaru) should take note!
Reply
Ted K 11:04AM (12/29/2005)
Holy crap, the number of comments that appear to have come from scion's marketing team is STAGGERING.
Reply
rw 11:34AM (12/29/2005)
klaatu
you do not haggle over furniture or tv's? Good god I have a house,tv,furniture I want to sell you. Please come see me. I will be your bestest buddy. Goodness now i understand why you own a hybrid.
Reply
klaatu 12:54PM (12/29/2005)
rw, if the retailer wants to play games with me, it's just like one of the Toyota dealers I talked to who wanted $2000 over sticker, or $3000 if I wanted to get to the "head of the waiting list" - I walk out.
I don't want games. I want a good fair price up front, and companies which operate in that mode get my biz - game players see my back as I leave the store.
Simple. And an awful lot of people feel the same way I do, too.
Oh yeah, I did pay retail for the Prius. Not a penny more, though. Some people are paying big bucks extra.
And, oh yeah, I'm STILL getting 48-50 mpg while my wife's functionally similar mid-size gets 1/2 that, and costs more to insure even though it's 3 years older.
Now, go away and fill up your SUV, rw. What'll that cost you, $75? LOL.
Reply
Marc 4:15PM (12/29/2005)
Some autoblog readers need to go back to school to learn how to read critically. This article is filled with inaccuracies, half-truths and opinions spun together to prove the author's misguided point (much like many stories in the mainstream media)
"Apart from their unconventional shapes and higher quality, the xA and xB are thoroughly banal commuter tins. " Pure opinion.
"The $16,500 coupe also provides refinement levels well above its class average. In the process, however, the tC steps ALL OVER Toyotas own aging Celica, a car selling for thousands more, despite offering substantially less refinement and bang-for-the-buck."
This is a problem, how??? Replacing the slow selling Celica with a better, cheaper car??? Thus must be why Toyota is bankrupt.
"In this increasingly video-bite driven, high-definition society, with its endless stream of new products, a freshly-minted Scion owner is seriously unlikely to become the Lexus LS buyer of the future, no matter how high those J.D. Power rankings climb." Pure conjecture, got any facts to back this up???
"Lest we forget, despite their successes, this is the same Toyota that made several unsuccessful overtures into the full-size pickup arena " Wrong again, Toyota made ONE mistake with the T100. The replacement, Tundra, consistently sells around 100K a year.
"Its also instructive to note how other companies mold-breaking youth-targeted entries have fared. The irony is that most vehicles earmarked for modish young trendsetters usually find their audience among an altogether older demographic. How many fifty-year-olds do you see wheeling about in Chrysler PT Cruisers" Comparing Scions to PT Cruisers is unrealistic, PT's were never meant for youths, this using a completely false analogy to prove a completely false point.
"older consumers are INFINITELY less likely to plump for options like the $299 illuminated cupholders (yes, really) that help Scions quest for profitability" Proof that Scions must thus be being sold to young 'uns, as Scion has some of the highest accessory sales in the biz.
"Mitsubishi already learned the hard way that building a business on a young, fiscally irresponsible customer base is short term gain for long term pain" Another bad analogy, Mitsubishi was done in by reckless use of bad financing offers to move its products. Scion does not do this, nor do they need to.
Sorry if this was long, and no, I don't work for or even own a Scion. I am just really tired of "news" stories that are full of opinions or lies that are told cleverly and often enough until they are believed as truth. Did Bill O'Reilly write that article?
Reply
rw 6:14PM (12/29/2005)
klaatu
Don't own an SUV. But I also do not defend what I purchased on an autoblog. Praying to the almighty that something not positive is wrtten about my vehicle. And if it was I must attack everyone who says a negative thing about my purchase. You are laughing at me? You are the one that pays retail and thinks is great. I just choose to go in and say (and I know how hard this must be) "can you do a little better". Keep my mouth shut and wait for the person to fold. Now that is hard isn't it?
Reply
mike 11:41AM (12/30/2005)
I own an Element.
It's fugly.
I love it.
Get over it.
Reply