May 2003 Cover Story

Will the Kids Buy It?
Toyota Hopes that Hip Young Car Buyers Will Flock to Scion

Today is Media Day at the L.A. Auto Show, and hundreds of journalists are piling into the Toyota booth at the cavernous Los Angeles Convention Center. There's hip-hop music thumping in the background, a row of video screens framing the stage, and theatrical fog wafting across the floor. Over in the corner, a table is piled with stacks of messenger bags that will be given away to members of the automotive press. Each is stuffed with a dance-music CD and a press kit announcing the launch of Scion, the first all-new automotive brand to come along from Toyota since Lexus wowed luxury drivers 14 years ago. Scion vice president Jim Farley takes the stage in front of billowing silver curtains. "We're about providing Generation Y with... concepts that stand out from the crowd!" Farley proclaims, pumping his words with energetic thrusts of his hands. "Ladies and gentlemen, it's my pleasure to introduce the first two production models of the newest lineup in the auto industry!" And with that the curtains rise to reveal two oddly shaped microminivans. One is a tiny four-door that looks like a cross between a skateboard and a toaster oven: The Scion xB is 6 inches shorter than a Volkswagen Beetle, but it's tall and angular, so it manages to convey an aura of utilitarian toughness. The other Scion, the xA, shares the xB's 108-horsepower engine, but it comes wrapped in a more rounded, egg-shaped body. Neither looks like any other vehicle sold on these shores, least of all a staid Camry or Corolla. That's all part of Toyota's plan.

[Scion is targeting] the "Millenials" -- the generation of Americans between the ages of 9 and 23, who may be the most marketing-savvy, advertising-saturated, skeptical, and unpredictable audience that business has ever tried to romance. Also called Generation Y or echo boomers, the Millenials number more than 71 million in the United States, and 63 million of them will either have or be eligible for a driver's license by 2010. Because of their population size and as-yet-unformed brand loyalties, they are marketing's next gold mind. Yet it's safe to say that no one in Toyota's U.S. management -- let alone the corporate leaders back in Toyota City, Japan -- has a feel for this audience. Toyota built its brand on reliability, not excitement. Industry insiders joke that Toyota's Avalon sedan is the "best Buick not built by General Motors". The average Toyota buyer is 48, one of the oldest for Japanese autos in the United States. Without Scion, the $121 billion company risks going the way of aging brands like Mercury and the soon-to-be-defunct Oldsmobile. But the youth car market is already jammed with low-priced Hyundais and Kias, as well as bottom-of-the-line Nissans, Hondas, Chevrolets, and Fords. "From a corporate standpoint, I measure success by the number of cars we sell to the target audience," says a company representative. "But personally, I want kids talking about how cool Scion is." As the general public comes pouring into the L.A. Convention Center, Scion's brushed metal display area quickly fills up with members of Scion's target audience. "Looks like a toy," one 20-something complains, scrutinizing the xB. "It's too boxy," his girlfriend adds. "I'd prefer something sleeker," a college student declares. For Toyota, it seems, this isn't going to be another Lexus slam dunk.

Naturally there's more to relaunching Japanese cars in the United States than simply changing their names. "Just because something works across the pond doesn't mean it'll be a hit in the U.S." says David Morrison, author of Marketing to the Campus Crowd and president of TWENTYSOMETHING Inc., a young-adult consulting & research firm in Philadelphia. Some 70 percent of American college kids have cell phones, for example, but they have resisted text messaging. Likewise, American skateboarders have embraced Japanese cartoon art, but nobody seems to want the combination camera/wristwatches that are considered cool in Japan.

The real test will come when Scion's vehicles actually arrive in showrooms. When it's on the road, the xB generates plenty of double takes, rubbernecking, and signs of vigorous approval and disapproval. Strangely, however, it didn't seem to draw much of a reaction when parked just a few feet away from Sproul Plaza, the crowded epicenter of the University of California at Berkeley. Dozens of Millenials walked, pedaled, and skateboarded by on their way to class, but in no more than half an hour, no one bothered to give the car a second look. And then, eventually, one potential customer paused to ogle it. He was gray-haired and old enough to be a grandfather. He was driving a Chrysler minivan. "I love it!" he declared.

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© 2003 Business 2.0 Media/Time Inc.