Toyota Motor Corp (TM) said it will wind down its Scion brand in the U.S., retreating from a 12-year effort to create a separate identity for small cars aimed at young buyers.
Toyota said it will start rebadging three 2017 model Scion cars as Toyotas starting in August. The Scion tC small coupe will go out of production in August, Toyota said.
Scion sales peaked at 173,034 vehicles in 2006, but have trended down since. Toyota sold just 56,167 Scion vehicles in 2015, reflecting a broader drop in sales of small cars in a U.S. market that is tilting toward larger sport utility vehicles and trucks.
Fiat Chrysler Automobiles (FCAU) said last week it would phase out production of its Dodge Dart small car and its midsized Chrysler 200 sedan, and seek partners to produce replacements, because profits for the smaller cars had evaporated.
Toyota established Scion as a separate brand for a series of models originally designed for the Japanese market. The brand had an early hit with a small, boxy micro-wagon called the xB. More recently, Scion has had success with a sporty coupe called the FR-S that harked back to iconic Toyota cars such as the Celica of the 1970s. The FR-S will continue and be rebadged as a Toyota.
Toyota also used Scion as a test lab for efforts to make the company more appealing to young consumers, at a time when the average age of customers for some core Toyota brand models was cruising into the 60s.
Half of Scion buyers were under 35 years old, Toyota said.
“Scion has allowed us to fast-track ideas that would have been challenging to test through the Toyota network,” Toyota North America CEO Jim Lentz said in a statement. Lentz was the founding vice president of the Scion brand.
Toyota distributed Scion through its existing U.S. dealer network, and will not have to close stores to wind down the brand.