LOS ANGELES -- It's a rare event when Toyota fumbles a product, but the Echo qualifies.
Sales of the Echo, Toyota's effort to reach first-time buyers, are dwindling fast. But the car won't be replaced for another year. The Echo's poor sales could weaken Toyota's marketing of its Scion youth brand.
Toyota acknowledged that the Echo was a dud in late 2003 when it stopped pushing the car on its dealers and made it available on order. Sales fell through the floor. Some dealerships stopped offering the Echo.
With Scion pitching a low-price message to younger buyers, there is concern within Toyota that dealers might walk mainstream Echo-compatible customers into the Scion showroom to save the sale.
Turning Scion into a dumping ground for mainstream first-time buyers would muddy the brand's hip image.
"The Scion product, design, sales process and dealer experience are focused on attracting trendsetting youth," said Jim Press, COO of Toyota Motor Sales U.S.A.
Press said he wants Toyota dealers to push mainstream buyers into an Echo, a base Corolla or a certified used vehicle rather than into the Scion showroom.
Toyota introduced the Echo in October 1999. It hoped to sell 50,000 units annually.
Although Toyota came close to hitting the mark in 2000, selling 48,876 units, sales fell sharply from there. Last year, only 26,167 units were sold. This year, Toyota sold just 3,425 units through October.
The segment, an afterthought to many manufacturers, is suddenly attracting a lot of attention. Until recently, the Echo, Hyundai Accent and Kia Rio were the only players in the low-profit segment.
The Scion lineup's splashy arrival has raised eyebrows. Chevrolet has brought in the Aveo from South Korea. Honda is looking to bring the Japan-market Fit to America. Nissan and Ford Motor Co. also are studying the segment.
Changing demographics have caught the industry's eye. The so-called echo boom of baby boomers' children is arriving, with 63 million reaching driving age in the next decade. Press said those buyers will mostly be looking at Echos and Corollas, not Scions.
Press calls the Echo "a hole in our portfolio." He said the next Echo will do a better job than the current Echo of keeping Toyota's share of mind among budget-conscious consumers. A product planning source said the next generation, due in fall 2005, will come as a three-door hatchback and a sedan and may not retain its name.
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