Scion, the new line of vehicles from Toyota Motor Sales (TMS), U.S.A., Inc., was created to meet the demands of an emerging culture of new car buyers. Scion began selling its first two production models, xA and xB, in 105 California dealership showrooms on June 9, 2003. In February 2004, sales expanded to cover 23 more states in the Gulf States, Southeast and East Coast regions. In June 2004, the launch of the 2005 tC sports coupe coincided with the completion of Scion's national rollout.
"Scion is a laboratory, a work in progress, that will continue to evolve along with the quickly-changing demands of a new generation of consumer," said Jim Farley, vice president, Scion. "Where we are today may be far from where we will be tomorrow."

The Products
Scion products all share three key characteristics: style, versatility and surprise. The long-term styling goal focuses on vehicles that are expressive, but subtle. Versatility can be found in the numerous combinations of passenger and cargo configurations. The element of surprise is seen in the high-quality materials and the long list of standard equipment.
Simplicity is important to Scion's key buyers, and the extensive standard specifications list was derived with this key objective in mind. The xA, xB and tC are mono-spec vehicles, with frontal and seat-mounted side and front and rear side curtain airbags for xA and tC as the only factory option. As a result of this approach, a customer must only make a few key choices when purchasing a Scion: model, transmission, color and accessories.
In addition to wheel covers and audio, Scion has developed approximately 40 accessories for each vehicle that are covered under the standard Scion limited warranty of three years or 36,000 miles, whichever comes first. Consumers can choose from a wide array of appearance, convenience and underhood items, such as a cold air intake or a strut tower brace, essentially bringing a build-to-order process to the consumer. The aftermarket also weighs in with a wide variety of items like turbochargers, superchargers and lowering kits.
In Spring 2003, Scion developed a process with SEMA (Specialty Equipment Manufacturers' Association) to transfer technology from Toyota's development side to aftermarket manufacturers who want to develop products for Scion vehicles. This is the first time that a Japanese carmaker has participated in this program.

The Dealer and Process
Although the dealer represents credibility for the brand and the sales process, Scion's target market made it clear that they want a different relationship with the salesperson. Target buyers point to timeliness, simplicity and comfort level as the three essentials in a sales experience.
"We looked at the traditional process, talked with younger buyers and identified improvements to three key processes - information- gathering, inventory management and the retail experience," explained Farley.
Scion.com and the dealership showroom let customers explore at their leisure and learn about the brand at their own pace. Scion inventory management utilizes a pull philosophy rather than the traditional push method. By using a pooled inventory approach, dealers will be able to get the car they need, at the right time. When combined with the ability to accessorize vehicles at the dealership, this customer-driven approach helps ensure that the right car is matched to the right customer. Research showed that although Gen Y wants a more timely transaction, most are willing to wait about a week for their custom-built car.
Each Scion dealer underwent extensive training to learn more about this unique target audience and how to provide a sales process tailored to their needs. In addition to the normal two-day off-site product training, each dealership participated in six days of customized, in-dealership education. The Scion Covenant, key standards that focus on improving the customer experience through sales and marketing, and image and facilities, was introduced across all dealerships, with applications customized for each retailer's specific circumstance.

The Dealer Showroom
The Scion dealership environment caters to buyers who want the resources to answer their questions, but who also need the freedom to explore at their own pace. The Scion showroom accomplishes this through three key areas, each with a specific focus:

• The product area includes highlights of the vehicles' features on 50-inch plasma screens, several accessory display cases, freestanding paint and fabric selector stands and, in many showrooms, a Scion vehicle customized with accessories.
• The discovery zone is supported by self-service Internet kiosks and printer stands, where users can log onto the Scion Web site, simulate customization of their chosen vehicle, including installation of the approximately 40 accessories, and then save or print out the data for reference. This streamlines the purchase process and facilitates a more personalized shopping experience.
• Finally, the consultation space involves a certified Scion sales staff that will offer assistance and guidance for shoppers who have any additional questions.

The Pure Price Solution
The Scion "Pure Price" solution is a way to meet the buyers' desire for consistency and transparency. It means that the dealership's advertised price equals the actual transaction price. This principle should apply to accessories, finance and insurance.
This "Pure Price" is supported by base Manufacturer's Suggested Retail Prices (MSRP), without freight, of $12,480 for xA, $13,680 for xB, and $15,950 for tC. The xA, xB, and tC equipped with automatic transmissions, are $13,280, $14,480, and $16,750, respectively. These prices acknowledge the Scion target buyer's budget while giving them an unprecedented level of value.
The Scion business model has produced a win-win situation for both buyer and dealer. Scion's pure-price philosophy has given Scion tremendous credibility with an extremely suspicious consumer. Dealer profitability remains strong due to the additional profit potential from accessorization.
Port pooling of dealer stock and port installation of accessories have made delivery of a custom-ordered vehicle quicker and easier, while keeping dealer inventory at minimal levels. The speed and ease of the process is further enhanced by a buyer who has typically already "built" and priced-out his/her new Scion online before ever stepping foot in the dealership.

The Market
Gen Y, defined as those born between 1980 and 1994, is emerging as a tremendous force in the marketplace and will eventually rival the Baby Boomers for dominance. By 2010, Gen Y will account for roughly 25 percent of the Light Vehicle Market. In 2020, they will account for 40 percent of the market, resulting in 6.5 million units in a 16-million-unit market, a number that no manufacturer can afford to ignore.
Gen Y values emotional attributes in addition to rational elements often coveted by Boomers. It is critical that Gen Y buyers be allowed to discover things, like new brands, at their own pace. "The Scion brand, from the beginning, was not designed to be promoted. It was designed to be discovered," said Farley.
Each generation wants to find its own way in life and discover its own brands. Gen Y seeks out products on its own terms, it is impervious to mass media. They also demand authenticity - things need to be "real." And finally, they treasure their relationships with family and friends and have a strong sense of community.
One segment of Gen Y is comprised of trendleaders, or early adopters who like variety and who are not afraid to try new things. More importantly to an automaker, these are the people who believe that their vehicle is more than a form of transportation - it's an expression of their individuality.
This trendleader population is just part of the Gen Y market and accounts for about 15 percent of the overall generation, or about 10 million consumers by 2010. Scion will target this sub-segment and focus on passenger cars, while Toyota will continue to target more mainstream youth.

The Message and Methods
Scion has been and will continue to generate interest and increase awareness through its interactive Scion.com Web site, a hybrid lifestyle/automotive magazine and participation in aftermarket and lifestyle events and shows.
"All Scion events and communications are layered and designed to be viral, creating crossover into one another," continued Farley. "They are designed to be interactive, between the participant and brand, amplifying Scion's core philosophy of participation and inclusion."
Scion's tag line is, "What moves you." This has not only a rational element, given that Scion is a car brand, but an emotional element as well, posing a provocative question to consumers.

-Marketing-
Scion marketing has an urban feel and generates awareness among buyers who have a command of their own style. The Scion brand strategy will continue to focus on creating word-of-mouth buzz among the most influential urban Gen-Y trend leaders through non-traditional lifestyle events and communications, based primarily on music, art, film, fashion and the automotive aftermarket.
Over the past two years, Scion has been highly visible and active in the aftermarket/tuner segment through events such as Hot Import Nights. Scion will increase its presence from 17 of these tuner shows in 2003 to 27 in 2004. Scion will take full advantage of these venues to showcase heavily modified tC project vehicles. While participation in tuner events is one clear link to a buyer group, Scion's affiliation with SEMA forms the foundation for involvement with the aftermarket. This is an effort to ensure that Scion buyers will enjoy a wide range of custom products from which to choose.
Scion will continue to focus on a marketing approach that is experiential, with high quality consumer interaction, providing consumers the opportunity to learn about Scion in an authentic manner. For example, consumer drive programs allow consumers to experience the cars in a relaxed environment. People have the opportunity to test drive the tC and see accessory displays, customized vehicles and enter a creative video competition. Further information is available at www.scion.com/tour.
For print, Scion is currently on its fourth issue of the automotive-lifestyle fusion magazine. The magazine has and will continue to receive bi-annual updates to its coverage on product and trends, events and people. The arts will continue to play a primary role in this non-traditional marketing. The Scion Installation Series, a traveling nationwide art show with paintings and sculptures by graffiti and graphic artists, will return for a second nationwide tour later this year. Finally, Scion will continue the quarterly release of new-compilation music CDs handed out at Scion-sponsored or co-branded events.

-www.scion.com-
All of Scion's communications, be it marketing events or advertising, are tied in to online access, the primary information highway for Gen Y. Scion's Web site has been active since March 2002, and now registers nearly one million visitors per month. Scion.com has become the key connection with the brand's consumer base, providing the primary interface with dealerships as well as a growing database of lifestyle information, events and related events.
More than 70 percent of Scion.com Web site users are under the age of 35 and male. They've demonstrated a strong propensity to participate with Scion's evolution, evidenced by the rapidity with which they respond to the numerous surveys posted online.
Scion.com allows customers to discover the products on their own terms at their own pace. Scion.com actively connects buyers with local Scion dealers, and enables them to configure and price their vehicles. In support of the tC launch, a micro-site http://www.wanttc.com rewarded those consumers who express interest in this vehicle.

-Advertising-
ATTIK, Scion's advertising agency, conducted several research studies with clear results for Scion's campaign. Scion advertising has appeared under the radar screen of most mainstream consumers. Mass media is proportionally small and finely focused as the nature, content and quality of Scion's communications are deliberately underground.
Broadcast is typically aimed at late-night network and cable. Print media uses non-traditional formats like multi-page outserts featuring acetate overlays polybagged with magazines. Outdoor publications are used extensively for their simplicity and strategic placement in high youth traffic metro areas. Wild postings are a relatively new type of "guerilla" media form for the automotive industry and a more creative form of micro-outdoor advertising that adds an important element of surprise, intrigue and personalization evident in all things Scion.

The Development
The development of the Japan-market Black Box (bB) laid the foundation for the creation of Scion's xB. The bB was brought to market at half the cost of a normal development project with the elimination of hand-built prototypes prior to start of production. Virtual assembly, virtual crash-testing and pull-ahead production tooling allowed nearly a 50-percent reduction in development costs. Development of the xB began a few months after the launch of the bB.
The development of the xA was folded into the overall developmental program of the Japan-market vehicle called the ist. The xA and xB were designed to anchor the entry-level price position for a line of products that will explore many new directions.
The tC was developed specifically for the U.S. market in just 13 months from finalization of blueprints, the fastest development time for any Toyota U.S. product.

What Scion Has Done
Overall brand recognition jumped from 19 percent in May 2003, one month prior to the California launch to 53 percent in early September 2003 among consumers under 35 years old. Twenty-two percent found out about Scion by its physical presence on the street or at an event. The second highest ranking at 12 percent was "heard from a friend" tied with "magazine coverage."
Approximately 500 Scions were registered in 40 states, and even overseas, even though the brand was officially on sale only in California, prior to the second wave rollout in February 2004.
To date, Scion's buyer profile suggests that Scion has hit its target. As of August 2004, the median age for Scion drivers is 35, and more than 50 percent are male. Most importantly, approximately 76 percent of these buyers are new to the Toyota family of brands.

Where Scion is Headed
Scion simultaneously completed its national rollout and launched the third Scion vehicle, the tC sports coupe in early Summer 2004. The tC elevates the Scion brand's sophisticated urban positioning to a level that is considerably more polished and refined, and significantly more performance focused.
The 2005 Scion tC establishes a more aspirational cache for the brand with emphasis on its upscale, European styling, its exceptional handling and its surprisingly roomy-and-versatile packaging. Most importantly, tC delivers on Scion's promise to meet luxury expectations at a subcompact price point.
"Scion is not Toyota's youth strategy. It is a vital and important part of it," said Farley. "Scion will continue to explore new ways to stay relevant and spark the interest of this new generation for many years to come. And finally, Scion will be imitated. Our competitors will quickly realize that the real risk is to do nothing."