Toyota considers sub-brand

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Toyota Motor Sales USA, plotting its next assault on the elusive youth market, is considering creating a youth sub-brand and not ruling out hiring an agency to court younger buyers.

Toyota is "looking at all the options ... to expand the Toyota brand umbrella to cars, trucks and youth," said Jim Press, exec VP-chief operating officer of Toyota and its upscale Lexus Division.

When asked if Toyota Division might hire an ad agency to focus on youth vehicles, Mr. Press said, "I don't want to rule anything out."

While there has been talk in car circles that Toyota Motor Corp. in Japan wants a third division in the U.S. for youth, Mr. Press denies the parent company is pushing for that and said formation of a separate division is highly unlikely. "A low-priced car [priced for young buyers] doesn't carry substantial margins and really can't support a separate channel," he said.

But Toyota could more formally target youth without setting up a third division. Don Esmond, general manager of Toyota Division, said an internal group charged with studying the youth market is expected to present its findings this fall. Among the matters under consideration, he said, is whether to sub-brand youth vehicles-creating a distinct image for the family of Toyotas that appeal to younger customers.

Toyota buyers in 2000 were the second highest average age, at 43, of the six top-selling mainstream Japanese car brands in the U.S., according to data from researcher J.D. Power & Associates. (Subaru of America, at 44, was older; this comparison excludes luxury brands such as Lexus.) Toyota's somewhat-older average in part reflects Toyota's success at getting loyal younger buyers from past decades to trade up to models, such as the No. 1 selling Camry, as they get older.

Toyota is working to attract younger buyers. The latest version of the Celica has attracted owners with an average age of 32 vs. 42 for the previous model. Mr. Press said Toyota's cheapest car, the Echo, attracts buyers with a median age of 40; Mr. Esmond said the average Echo buyer is two to three years younger than buyers of Ford Motor Co.'s competing Ford Focus. Half the Echo buyers are new to Toyota, he said.

Toyota Division's advertising has been at Publicis Groupe's Saatchi & Saatchi, Torrance, Calif., since 1975. "Saatchi has done a good job" for the brand, said Mr. Esmond.

Saatchi and Toyota's corporate agency, Oasis Advertising, New York, share work on the Prius gas/electric car. Lexus is at Saatchi sibling Team One Advertising, El Segundo, Calif. Oasis has a non-equity alliance with Dentsu in which the two agencies cooperate on some work.

Toyota recently denied it had approached at least one U.S. ad agency about an unspecified assignment (AA, April 16). Dentsu Holdings USA, New York, denied last month the agency was angling for any U.S. Toyota business. Dentsu is Toyota's main agency in Japan; a Dentsu shop has Lexus in Canada and another works with Toyota in Brussels.


Hiring a new agency for the youth effort would be a blow to Saatchi, which handles the brand in some 30 markets outside the U.S. The agency created last year's launch of three youth vehicles, the Echo, the Celica and the MR-2 Spyder roadster. That was Toyota's first big move in recent decades to woo younger buyers in the U.S.

Toyota may not make any moves for a while since new youth vehicles are a few years away, indicated an executive close to the situation, who asked not to be named.

Scott Gilbert, CEO of Saatchi's Torrance office, said "there's nothing going on to the best of my knowledge. I don't think there's firm plans on anything (for the youth market)."

In Japan, Toyota has been selling the sub-branded WiLL Vi minicar, aimed at Gen Y buyers, since early 2000. Toyota formed partnerships with four other marketers in Japan to sell WiLL beer, WiLL customized travel packages for youth, a WiLL deodorizing mist, and WiLL-branded computers, microwaves and refrigerators.

Toyota gave the WiLL car account in Japan to Hakuhudo, a split from Dentsu.

WiLL could be coming to the U.S.: Toyota is studying whether buyers here would be interested in WiLL cars, according to Automotive News, a sibling of Ad Age.

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