Youth target warms to Scion

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Only a month after beginning its California test, Toyota Motor Sales USA's Scion is well on its way to becoming the industry's youngest-selling car.

The average age of the Scion buyer is 36, and 54% of the car's sales are to the under-35 set. That bests the youngest-selling car in America, the Volkswagen GTI, which according to J.D. Power & Associates, is purchased by the youngest buyers, at average age 37. Toyota also has another reason to be pleased: According to a spokeswoman, 59% of Scion buyers are new to the automaker.

In the car's first three weeks on sale, dealers sold 1,351 units. Of those, 900 were for the boxy xB and 451 for its xA model. The marketer, which worked with boutique shop Attik to develop marketing strategy and advertising (see related story, right), will start Scion's national rollout next year and launch a third model.

When told of the early results, Todd Turner, president of marketing at consultant CarConcepts, said Toyota "is on its way" to making inroads among youth buyers with Scion. Toyota's first attempt to attract Gen Y in 1999 with its small Echo car failed because "it was ugly, under-powered and was a Toyota," he said.

For a car to be a true hit with young buyers, an automaker should look for 25% to 30% of total model sales to buyers 25 and under, Mr. Turner said.

Currently, only 10% of Scion buyers are under 21, a good start, since that age group accounts for a very low percentage of industry sales. Moreover, it could signal the beginning of a turnaround for Toyota, whose sales to buyers 25 and younger have been declining. In 1992, those buyers accounted for 10% of all the brand's sales vs. 9% last year, according to J.D. Power.

cracking the code

The carmaker isn't alone in struggling to crack the youth code.

Ford Motor Co.'s Ford Focus small-car line sells 25% of its vehicles to buyers 29 and younger, a spokeswoman said. American Honda Motor Co.'s Honda brand aims its Element sport utility at Gen Y. According to J.D. Power, 36% of Element buyers are under 35.

Targeting Gen Y consumers is crucial. In 2002, Gen Y heads of households accounted for 10% of all new-vehicle sales, or roughly 700,000 units, according to J.D. Power. More importantly, Gen Y household heads will buy 3.5 million new vehicles annually by 2010 and 5 million a year by 2020.

While Toyota's sales to Gen Y have slipped, Honda's sales to the demographic have increased in the past decade. According to J.D. Power, Honda's sales to buyers 25 and under rose to 12% of its total annual sales last year vs. 10% in 1992.

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