The way millennials perceive the auto industry has changed today’s car ownership model, and Toyota’s Scion brand fell victim to this shift.
Even if it sounds like a paradox, the Scion brand was killed by its own targeted customers. When Toyota launched the marque back in 2003, the automaker wanted to explore new territories and experiment with products specifically made for youth customers, hoping at the same time that millennials would become Toyota buyers of tomorrow. And Scion began its adventure with strong sales at that time, attracting 173,000 people in 2006, but all went downwards from there, selling only 56,000 cars last year. And 12 years after the inception, all the Scions are to be rebadged as Toyotas. “Surveys we do tell us young buyers are less interested in owning cars,” one of those behind the Scion brand told Reuters. “They either don’t have the financial leeway or they’re substituting car ownership with ride-sharing or car-hailing services like Uber,” he added. Is not only a matter of financial power, but the younger generation is also looking to cars different these days. The surge of services such as Uber is a clear indication of the trend and the clear reason behind the automakers’ response to the shift and heavily investing in this business.
The marketing chief of one Asian automaker said to Reuters the changes prompted by ride-hailing and car-sharing services were a major factor in his company’s recent move to overhaul its premium brand strategy. As the smart apps and services gain traction, more households are likely to limit themselves to just one car, said the executive. “Day to day, for short commuting and doing errands, they can use Uber or similar services. Those households would more likely buy just one car and spend more money on that car. That would most likely be an upscale car. That’s where our growth is going to come from,” he said.