One on One with Larry Hutchinson of Scion Canada
Today’s youth market has more buying power than ever before. They’re not just buying iPods and video game systems anymore, they’re also buying cars. Not any car will do, either. Today’s kids are smart. Well, most of ‘em are. Toyota launched its lifestyle-oriented Scion division in the U.S. in 2003. It has since become quite popular amongst young, trendy buyers who aren’t afraid to express themselves through vehicle customization. Around this time last year, Toyota Canada confirmed its intention to bring the brand up here sometime in 2010. Recently, we had the opportunity to chat with the director of Scion in Canada, Larry Hutchinson, to get the rest of the story – the what, where, when and why – on Scion. Hutchinson’s been with Toyota Canada for over 20 years, working for Toyota and Lexus in product planning, pricing and distribution. He helped launch Lexus in Canada, ran Lexus for three years and is also the director of Lexus in Canada currently. He has been working with Scion for about five years in preparation for bringing it to Canada
RPM: How does Scion fit into Toyota’s lineup?
Larry Hutchinson: Scion brings a great opportunity for us in Canada. It’s used to attract a young, trend-setting demographic and it will bring new people to our brand(s). We’re seeing this in the U.S. currently. There’s a certain demographic in Canada that’s really on the leading edge of all the trends, all the new brands, and they even create the brands in the marketplace. Scion provides them the opportunity to personalize, customize and really take hold of the brand and take it where they want it to go. We’ll introduce those people to the Scion brand across Canada in September 2010.
RPM: Tell us more about Scion and its history.
LH: Scion originally launched in California six years ago and rolled out in phases to key states like Florida and New York over about 18 months. It’s across the U.S. now and, depending on the year, sells to the tune of about 150,000 vehicles a year. Scion has been a very successful brand. It’s the youngest car brand in the States and now North America, and the tC model is the youngest-owned car in North America, so it really has attracted that younger trend-setting customer we were hoping it would. We have also found a very high percentage of Scion owners move to a Toyota or Lexus if they don’t stay with Scion.
RPM: Is that why you have decided to bring it up here? What’s the rationale for launching in 2010?
LH: Canada is a small car market that appreciates uniqueness, style, fuel economy and value. Scion plays to all of those things. 2010 is a great time for a number of reasons in Canada from economic and demographic points of view. The youth market is also growing in Canada and is a little more affluent than it’s been in the past. The economy, we think, is going to be a little stronger the next few years overall. Also, the product life cycle of the vehicles have aligned really well so it makes sense to start now.
RPM: What is Scion and the demographic?
LH: ‘Scion’ is Greek for ‘descendant of’ so, in this context, it’s part of the Toyota family. Scion will attract a new buyer to the Toyota family, which is the idea – a younger demographic that we don’t currently get today. Typically, these are 18-to-30-year-old Gen Ys.
RPM: How is Toyota not addressing this market already with its current products?
LH: Toyota does very well today in the 25 to 40 and 20 to 35 age brackets, for example, but the type of buyer is different from what we get with a Scion buyer. Toyota customers get value, quality, dependability, reliability and all those things make Toyota great in the marketplace. But, there’s another type of buyer who’s looking for a more emotional-type purchase – an ownership experience, if you will. They want to personalize, customize and accessorize their own type of vehicle in order to be more leading edge. Scion brings those types of people to the market. With both Toyota and Scion, we’ll address pretty much the entire youth market in Canada.
RPM: What models will Scion sell initially? What options are there?
LH: We’ll be launching with the next generation tC and updated versions of the xB and xD models. The lineup will be similar to what’s in the U.S. right now. It’s too early to say anything about the tC other than it will be a full model change. Pricing will be set at a later time (June or July perhaps) but basically, each Canadian Scion model will come one way. We call it “mono-spec.” The customer then will have an opportunity to choose accessorization at the dealership and/or they may choose to do their own customization as well. At launch, there will be a wide range of accessories that will be available through the dealerships to personalize these vehicles, including wheels, body kits, stereo electronics and literally hundreds upon hundreds of different accessories.
RPM: What cities will Scion launch in?
LH: We’ll have 45 dealers in Montreal, Toronto and Vancouver with a planned expansion phase sometime after the initial launch. We still have to talk with some of those dealers. They are really excited though! The dealers have wanted to do this for a while now. We’ve been kind of holding them back a little bit. They see the opportunity to expand their businesses with great new customers to get into the brand, a young demographic to move up within their dealerships as the years go by. The dealers love the products. They’re fun and exciting products, so they’re really looking forward to it.
RPM: Will there be Scion dealerships?
LH: We’ll have a unique Scion display at each participating dealer, with unique staff and training. We have a Scion sales process, which we worked closely with the U.S. on, and we have a lot of training to make sure that there’s a unique customer experience for these fast-paced, trendy people. It’s up to us to deliver the experience they’re expecting!
RPM: What kind of volume are we talking about here?
LH: Our goal for Scion is not to be a volume brand. This is about personalization, customization and welcoming a new owner base to the Scion franchise. Obviously, we have volume expectations, but before we worry about those things we’re more concerned about how we’re treating our customers.
RPM: What is the biggest challenge to launching this brand in Canada?
LH: This brand depends on more word-of-mouth, grassroots activity than a typical launch would. It’s very easy to buy advertising, create a commercial and create awareness for something. It’s very difficult to get the message out at a grassroots level and have people pick that message up and run with it. That’s the real challenge. Fortunately, there are already Scion owner clubs in Canada and people carrying that message here helping us do just that.
RPM: We’ve always like Scions because they’re different, affordable and customizable. In fact, trend-setting Canadians have been seeking out and importing their own Scions from the U.S. for about five years now. Your comments?
LH: It shows us there’s a base demand for the vehicles. Those people have gone to the States and have picked up a Scion or a Canadian dealer has gone down there and brought one up, which they can do. It’s okay to do that. It really speaks to the people wanting a Scion so bad that they actually go out of the country to find one and bring it in.
RPM: Who is Scion’s main competition?
LH: From a product point of view, I think we have something really unique. There are some other cars that have been introduced to the market lately that have a similar type of idea to the xB if you will (insert Nissan Cube here) but most people I talk to don’t really liken them to being equivalent to the xB. From a branding point of view, there may be others bringing unique products to market, but none of them are bringing a unique brand that really touches the consumer and gives them the canvas to paint what they want to paint. Scion certainly has an advantage there. As for who else attracts a younger buyer in Canada? Volkswagen does a little bit. Some Mazda vehicles as well, but they don’t bring the unique experience that Scion does.
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