Job 1 for new Scion boss: Fresh product from Japan
Brand, moving into mainstream, is social media stalwart
Doug Murtha's Toyota career has focused on product planning. He wants “to make sure Scion has a big enough voice in Japan.”
LOS ANGELES -- When Toyota changed the leadership at Scion this summer, it turned to an executive with a much different skill set from Jack Hollis, who had run the youth-oriented brand since 2007.
The hyperenergetic Hollis had loads of field and dealer-relations experience. But in promoting Doug Murtha, Scion now has a laid-back, 46-year-old Angeleno whose Toyota career has focused on product planning, mostly involving Japan-sourced vehicles.
Both appear to have been the right man for the times. Hollis, who now heads marketing at Toyota Division, led Scion when it needed to get its market representation and customer service message correct. Now, with Scion's Japan-sourced volume products getting long in the tooth, Murtha must ensure that the next generation of cars brings some pizzazz back to the brand.
"I am trying to make sure Scion has a big enough voice in Japan," Murtha said in an interview. "That wasn't what Jack was asked to do. He was field-facing. Now I'm being tasked to lobby more for our interests, based on my career background and my contacts in Japan."
After glory years in 2005 and 2006, Scion sales swooned with the recession. Its youthful potential customers have had problems getting jobs, let alone credit. Plus, last year's tsunami crippled inventories of Scion's Japan-built vehicles.
This year, the brand will have its best sales result since 2008, likely finishing around 70,000 units. But it has a long way to go to match its 2006 peak of 173,034 units. Meanwhile, the Kia Soul, a boxy imitator of the Scion xB, handily outsells the entire Scion lineup.
"We need to look after our volume and place in the market," Murtha said. "Each model will play its own role. We have new products in the pipeline. Technically, we're not about volume, but we would like to be selling more."
It's more than just getting young shoppers qualified to buy Scions. The kids have to want the cars.
Plenty of surveys show that Generation Y is fairly apathetic about the brand. It doesn't help that, despite the recent introductions of the iQ minicar and the drifting-friendly FR-S coupe, most of Scion's lineup is aging fast.
Toyota has promised a new iteration of the xB hatchback and xD subcompact wedge at the New York auto show next spring. But whether those vehicles will maintain their present silhouettes has not been announced.
Murtha, for one, feels the iconic xB box should stay in the lineup.
"You do not have to worry about the box disappearing anytime soon," Murtha said. "It doesn't have to stay in the lineup indefinitely, but it would not be a small decision to sunset that program."
Tracking the true age of Scion owners continues to be complicated. According to R.L. Polk, in August, the average tC coupe buyer was 47 years old, while the xB and xD averages were 49 and 50. But those data track the average buyer, who could be a father co-signing a loan for his child. Scion says it tracks the ages of the drivers. Murtha says the average tC driver is 27 while the overall brand's average driving age is 37.
In the past, this would be seen as cause for celebration at Scion. But Murtha says the brand risks being seen as "immature" if too many kids drive its cars with hip-hop music blaring. That is why the older "young at heart" demographic numbers for the iQ (52) and xB (up from 45 in 2007) don't worry him.
It's also a big reason why Scion's latest advertising campaign departs from the urban grit of previous efforts. Scion is moving toward a more mainstream approach, explaining the brand to the unhip folks who may never have heard of Toyota's counterculture experiment.
"We're not as broad as we'd like to be," Murtha said. "The market perceived us too narrowly. ... It's not like we're going after Corolla customers, just being sensitive in how our brand is communicated."
About 65 percent of Scion buyers are new to the Toyota family. But only about 55 percent of owners remain in the Toyota family with their next vehicle. That's less loyalty than the Toyota brand in general. Then again, many Scion owners are still driving their first vehicles and haven't decided where to go next.
There is one area in which Scion continues to excel: social media.
A recent Scion-only night at the "Knott's Scary Farm" amusement park was a sellout. Ten thousand Scion owners mingled, based on just one Tweet issued by Toyota's Los Angeles regional office. Scion owners are so socially intertwined that 10 owners of yellow "Release Series" vehicles communicated in advance where they were going to park in Knott's giant lot.
Owen Peacock, Scion's national manager of marketing and communications, said Scion is "a facilitator of conversations."
He said: "Influential marketing is one of the things we've leveraged. Digital word of mouth, when done correctly, feels one-to-one, not like a blast."
This week, Scion has invited a caravan of 50 FR-S owners to drive their coupes to the Specialty Equipment Market Association show in Las Vegas. Scion got SEMA to relax its standards to allow the FR-S civilians to walk the show floor and blog about the aftermarket parts on display.
The latest social media arena for Scion is called "Scion Motivate." The brand is going to be a small-business incubator for young people full of ideas but short of cash.
The competition, launched Thursday, Oct. 25, has young entrepreneurial artists, musicians, designers and fashionistas competing for a chance to get startup funding from Scion.
"This is about turning people's passions into a career," Peacock said. "It's not for the dreamer who thinks, 'someday.' This is for the person who has taken the first step, signed a lease and incorporated."
The 50 individuals with the best ideas will be brought to Los Angeles for a three-day small-business conference with panels and speakers -- all of which will be streamed onto the Web.
Out of the 50 semifinalists, 10 winners will each get $10,000 in funding, a Scion vehicle and a six-month mentorship from a successful small-business owner.
Scion also will document through Web video how the winners' first six months of business went -- and how the Scion vehicle helped the enterprise.
The call for entries runs through January, with a slate of 30-second commercials promoting the competition. The top 50 selections will be made in February, and the workshop is planned for March.
Many of Scion's ideas germinated under Hollis but are coming to fruition under Murtha, who has no problem crediting his predecessor.
"I have the benefit of dropping into a well-oiled, finely tuned machine," Murtha said. "I'm the one coming in from the outside."
You can reach Mark Rechtin at firstname.lastname@example.org. -- Follow Mark on