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Customer LoginsScion's Built-in Challenge
When Toyota launched the Scion brand in 2003, a friend mentioned that the new brand would have a unique challenge; it would need to continually attract new buyers since existing buyers would likely leave the brand as they got older. IHS loyalty data suggest this theory played out in the real world and is perhaps one of the reasons contributing to Toyota's decision to discontinue Scion. As the table below indicates, Scion's make loyalty (those Scion owners who returned to market and acquired another Scion as a percent of all Scion owners who returned to market) in 2015 is the lowest of any make and substantially below both industry average and the loyalty for the make with the second-lowest result.
One of every ten Scion owners who returned to market in the first eleven months of 2015 acquired another one, less than a fourth of the national loyalty rate. Scion therefore was in the challenging position of having to continually attract an unusually large number of new buyers just to maintain its position in the marketplace, and this would raise the brand's costs versus those of the competition, everything else being equal. It's noteworthy that this was not a one-time issue or problem, but rather a permanent "headwind" resulting from the very strategy of the brand, to appeal to the youth market.
Tom Libby is Manager, Loyalty Solutions and Industry Analysis, IHS Automotive
Posted 19 February 2016