The executives of Toyota Motor Sales U.S.A. Inc.'s Scion youth brand believe they have Generation Y pegged. Value-priced small cars, with smartly designed interior space and loads of stylish accessories are what today's kids want.
So when Scion rolls out in California in June, their product selection will be a choice of two subcompact five-door vehicles.
But not many automakers are looking to follow Toyota into the small-car arena.
Some automakers balk at the low margins, low volumes and high development cost of a small car for the United States. Others believe that young buyers aren't interested in the types of vehicles that Scion will offer.
Pricing also is a factor. Other automakers would slot these small cars below their existing compact sedans. But the Scions will have a price premium compared to similarly sized vehicles, arriving at around $16,000.
Other than the two Scions, the only subcompacts on the market are the Toyota Echo, Hyundai Accent and Kia Rio. But those cars' volume models are priced below $12,000.
The only other vehicle conceived to woo Gen Y buyers is the Honda Element, a sport wagon based on the CR-V. It is much larger than either Scion vehicle.