Toyota's youth-oriented Scion division is becoming the shape of things to come at the Japanese giant, writes Bernard Simon from the New York auto show
When Toyota launched its Scion division three years ago, the Japanese carmaker's primary goal was to grab the attention of the twentysomething American car buyer.
Three models and more than 140,000 vehicles later, Scion shows signs of also becoming a catalyst for change in other parts of Toyota. "To have the pay-off, we have to take what we've learnt from Scion and put it into our core business," says Jim Farley, head of the Scion division, which is based in California.
Besides producing funky cars, Scion has taken a new approach to selling them, seeking to plug into the lifestyle of their likely owners.
Prices are non-negotiable, helping to speed up the buying process and minimise time spent in car dealerships. Scion aims to give buyers maximum flexibility to turn their new car into a fashion statement. The so-called Generation Y youth market wants "to personalise everything they own", Mr Farley says.
A choice of about 30 accessories and options is on offer, with dealers typically promising overnight installation. Some buyers spend almost as much on accessories as on the vehicle.
The choices include eight colours for cup-holder lighting, a licence plate frame, a choice of colours for steering wheel and pedals, and most important for Scion's target market a selection of audio systems. "People want to feel their music," says Mr Farley.
Scion has also found that the car industry's normal advertising channels have little relevance in the youth market.
The brand is seldom advertised in mainstream newspapers. Instead, dealers rely on such tactics as bringing cars unannounced to trendy music and clothing stores. Print ads appear mostly in pop culture magazines. Scion has sponsored DJ and master-of-ceremonies competitions.
This month, it set up its own record label, Scion A/V. A 60-piece hip-hop orchestra and Junk Science, a hip-hop duo, were the first performers to sign up.
Scion unveiled a concept, or design model, of a new addition to its stable at the New York auto show last week.
The boxy vehicle, known as the t2B, has some unusual features. It is wider at the top than the bottom. The passenger door slides open, while the driver's side has what the company describes as two "suicide" doors that swing open like a wardrobe.
Other Toyota brands have begun adopting some of Scion's ideas. Prius, Toyota's petrol-electric hybrid marque, has offered test drives at a chain of natural food supermarkets.
More than two-thirds of Toyota's 1,200 US dealers also sell Scion vehicles. Each has been encouraged to install two internet kiosks, allowing prospective customers to make instant price and technical comparisons with other brands.
Not all dealers have taken up the idea. But the winds are not blowing in their favour, given that Scion sales in January and February were more than three times the same period last year.
Financial Times