Dive Brief:
- Toyota is dropping the Scion brand in August and absorbing those vehicles into the Toyota brand in the 2017 model year.
- Ad agency Droga5 began working with Scion last year and for now Toyota isn’t changing that relationship, and Scion ads will continue to run for now, according to a Scion spokesperson as reported by Ad Age.
- The Scion brand launched in 2002 targeting younger car buyers that Toyota was finding to be a difficult target audience. According to Toyota, it is no longer having trouble reaching young car buyers, a state that rendered the Scion brand unnecessary.
Dive Insight:
Marketing to a specific demographic is not uncommon, but what happens when that age group's preferences shift? That's what's happening to Toyota's Scion brand right now. Toyota says the younger demographic has changed since 2002 and that the Toyota brand is more respected than the Scion brand with young car buyers.
"This isn’t a step backward for Scion; it’s a leap forward for Toyota. Scion has allowed us to fast track ideas that would have been challenging to test through the Toyota network," Jim Lentz, founding vice president of Scion and now CEO, Toyota Motor North America, said in a statement. The statement explained that the decision to rebrand Scion was in response to customers' needs.
Scion vehicles had faced three straight years of declining sales after a strong 2012, and had seven year-over-year drops in sales compared to just five positive years including the first three after the brand was introduced.
"Youth buyers are in a completely different position than they were 13 years ago," Bob Carter, senior VP-operations for Toyota Motor Sales told Automotive News, an Ad Age sibling publication. "That's really what's driving this decision."
For Toyota, doing away with the millennial-geared brand might work to its advantage. A recent Hotwire PR report found that in the year ahead, marketers should approach millennials as an audience segmented by their passion rather than as a cohesive age demographic.
"I was there when we established Scion and our goal was to make Toyota and our dealers stronger by learning how to better attract and engage young customers. I’m very proud because that’s exactly what we have accomplished," Lentz said in the same statement.
With the Scion brand a thing of the past, Toyota can focus its efforts and dollars on positioning its brand in a way that will appeal to new young car buyers based on their interests.
The branding switch will occur when the 2017 models reach dealer showrooms in August.