Scion: So successsful that Toyota dealers must expand
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Scion: So successsful that Toyota dealers must expand
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Scion brand is so successsful that Toyota dealers must expand
By MARK RECHTIN | AUTOMOTIVE NEWS
AutoWeek | Published 10/26/06, 8:32 am et
http://www.autoweek.com/apps/pbcs.dl...041/LATESTNEWS
Scion brand is so successsful that Toyota dealers must expand
By MARK RECHTIN | AUTOMOTIVE NEWS
AutoWeek | Published 10/26/06, 8:32 am et
LOS ANGELES -- Scion was designed to fill a quirky, dedicated corner of the Toyota dealership.
But with nearly every Toyota and Scion model on a winning streak, dealers are scrambling to find space for their youth-oriented brand.
For instance, dealer Dave Wilson wanted to keep Scion inside his Toyota of Orange store in California. He bought a bowling alley and eight acres across the street and will use that space for parts and service. Wilson's Toyota and Scion showrooms will expand into the vacated parts and service space.
Scion already outsells several brands - Mini, Suzuki, Mitsubishi - that want dealers to erect stand-alone stores. But Scion was always meant to be inside the Toyota dealership. That way, returning Scion customers might make the jump to Toyota.
"We haven't changed our philosophy," says Mark Templin, Scion vice president. "But we've needed to be creative in some markets."
Toyota Division expects all its dealers to renovate their showrooms by 2010 under an architectural plan called Image USA II. That plan calls for a greatly enlarged Scion space, including an entrance separate from the Toyota showroom. So far 85 dealerships have made the changes.
Toyota Division sold 1.6 million vehicles in 2003, the last year before Scion's national launch. This year Toyota and Scion likely will sell about 2.2 million units, while adding just a handful of dealerships since 2003. That means dealership space is tight, especially for stores with limited real estate.
Currently, 918 out of 1,222 Toyota dealerships have the Scion franchise. All but 45 Scion dealerships have the showroom inside the Toyota dealership. Almost all the others have converted an adjacent used-car showroom for Scion.
One bathroom, 400 people
Dealers with older showrooms have felt the strain the most.
In Microsoft Corp.'s backyard, Michael's Toyota-Scion in Bellevue, Wash., sold 2,600 new units last year from an outdated 19,000-square-foot showroom on just 2.9 acres. Space was so tight that two service stalls were converted into Scion retail space. But that still didn't leave room for demo cars, says General Manager Erik Paulson.
The overwhelmed Toyota dealer snatched up a Safeway grocery store two miles away when the supermarket's 40-year lease expired. After spending $39 million on land and renovation of the 82,000-square-foot supermarket, the dealership moved. Michael's Toyota sales target is now 3,500 vehicles.
More important, the expansion short-circuited a mild Toyota threat to place another dealer in nearby Issaquah, Paulson said.
"The old store had no customer parking and one bathroom for 400 guests a day. There was absolutely no room for Scion," he says. "Now Scion has 1,500 square feet all to itself."
Nancy Davies, vice president for retail market development for Toyota Motor Sales U.S.A. Inc., says dealers are losing their resistance to moving parts and service off-site, in order to keep Toyota and Scion sales together.
But not everyone agrees.
Gresham (Ore.) Scion is one of only four Scion dealers located off-site. It is across the street from the main Toyota store.
Dealer principal Mike Chaney wanted to keep the stores separate. Scion's one-price policy might conflict with the more traditional Toyota negotiating process, he thought. Several dealers with no room to expand have contacted him about the logistics of running a Scion store away from the mother ship, he says.
Although there is room to place Scion inside his Toyota store, Chaney is holding back.
"Would I change if Toyota told me to? Sure, but I'm doing pretty well this way," Chaney says. The suburban Portland dealer currently sells 250 new Toyotas, 30 new Scions and 500 used cars a month.
Move the trucks instead?
Lewis Toyota-Scion in Topeka, Kan., has undergone three renovations since 1995 and already is looking to expand from a renovation completed just last year. The dealership wants to keep Toyota and Scion together.
Says Lewis General Manager Steve Cain: "Some dealers in the Midwest who are running out of room may create separate Toyota truck centers, which makes more sense than splitting off Scion."
Other dealers have had to be creative with their real estate holdings.
Multiline dealer Norris Bishton rotated his franchises. He moved Garden Grove (Calif.) Toyota-Scion into his larger Nissan store and placed Nissan into a Ford store vacated by AutoNation.
"The feeling is that people who purchase a Scion come back later and purchase a Toyota," Bishton says. "The dealers want Scion to stay within the Toyota showroom, to keep it in the family."
But with nearly every Toyota and Scion model on a winning streak, dealers are scrambling to find space for their youth-oriented brand.
For instance, dealer Dave Wilson wanted to keep Scion inside his Toyota of Orange store in California. He bought a bowling alley and eight acres across the street and will use that space for parts and service. Wilson's Toyota and Scion showrooms will expand into the vacated parts and service space.
Scion already outsells several brands - Mini, Suzuki, Mitsubishi - that want dealers to erect stand-alone stores. But Scion was always meant to be inside the Toyota dealership. That way, returning Scion customers might make the jump to Toyota.
"We haven't changed our philosophy," says Mark Templin, Scion vice president. "But we've needed to be creative in some markets."
Toyota Division expects all its dealers to renovate their showrooms by 2010 under an architectural plan called Image USA II. That plan calls for a greatly enlarged Scion space, including an entrance separate from the Toyota showroom. So far 85 dealerships have made the changes.
Toyota Division sold 1.6 million vehicles in 2003, the last year before Scion's national launch. This year Toyota and Scion likely will sell about 2.2 million units, while adding just a handful of dealerships since 2003. That means dealership space is tight, especially for stores with limited real estate.
Currently, 918 out of 1,222 Toyota dealerships have the Scion franchise. All but 45 Scion dealerships have the showroom inside the Toyota dealership. Almost all the others have converted an adjacent used-car showroom for Scion.
One bathroom, 400 people
Dealers with older showrooms have felt the strain the most.
In Microsoft Corp.'s backyard, Michael's Toyota-Scion in Bellevue, Wash., sold 2,600 new units last year from an outdated 19,000-square-foot showroom on just 2.9 acres. Space was so tight that two service stalls were converted into Scion retail space. But that still didn't leave room for demo cars, says General Manager Erik Paulson.
The overwhelmed Toyota dealer snatched up a Safeway grocery store two miles away when the supermarket's 40-year lease expired. After spending $39 million on land and renovation of the 82,000-square-foot supermarket, the dealership moved. Michael's Toyota sales target is now 3,500 vehicles.
More important, the expansion short-circuited a mild Toyota threat to place another dealer in nearby Issaquah, Paulson said.
"The old store had no customer parking and one bathroom for 400 guests a day. There was absolutely no room for Scion," he says. "Now Scion has 1,500 square feet all to itself."
Nancy Davies, vice president for retail market development for Toyota Motor Sales U.S.A. Inc., says dealers are losing their resistance to moving parts and service off-site, in order to keep Toyota and Scion sales together.
But not everyone agrees.
Gresham (Ore.) Scion is one of only four Scion dealers located off-site. It is across the street from the main Toyota store.
Dealer principal Mike Chaney wanted to keep the stores separate. Scion's one-price policy might conflict with the more traditional Toyota negotiating process, he thought. Several dealers with no room to expand have contacted him about the logistics of running a Scion store away from the mother ship, he says.
Although there is room to place Scion inside his Toyota store, Chaney is holding back.
"Would I change if Toyota told me to? Sure, but I'm doing pretty well this way," Chaney says. The suburban Portland dealer currently sells 250 new Toyotas, 30 new Scions and 500 used cars a month.
Move the trucks instead?
Lewis Toyota-Scion in Topeka, Kan., has undergone three renovations since 1995 and already is looking to expand from a renovation completed just last year. The dealership wants to keep Toyota and Scion together.
Says Lewis General Manager Steve Cain: "Some dealers in the Midwest who are running out of room may create separate Toyota truck centers, which makes more sense than splitting off Scion."
Other dealers have had to be creative with their real estate holdings.
Multiline dealer Norris Bishton rotated his franchises. He moved Garden Grove (Calif.) Toyota-Scion into his larger Nissan store and placed Nissan into a Ford store vacated by AutoNation.
"The feeling is that people who purchase a Scion come back later and purchase a Toyota," Bishton says. "The dealers want Scion to stay within the Toyota showroom, to keep it in the family."
http://www.autoweek.com/apps/pbcs.dl...041/LATESTNEWS
#4
#6
#7
CL Folding Team Starter
iTrader: (2)
The SC is a joke.
And if the IS350 is what Toyota thinks a sports car should be then I've lost faith in their engineers (or most likely, their marketing).
If AMG can get away with dumping big engines, why can't at least Toyota. If BMW can tune the M3 to actually be harsh to some people, why can't Toyota.
It's not like it would cost that much to offer a slight variation in options. They could price the hell out of it and still find buyers. Besides, Toyota already makes a mass boat load of money from Lexus.
Come on, a 70k$ Land Cruiser? Talk about badge engineering. The margins are there, now give us something for it
And if the IS350 is what Toyota thinks a sports car should be then I've lost faith in their engineers (or most likely, their marketing).
If AMG can get away with dumping big engines, why can't at least Toyota. If BMW can tune the M3 to actually be harsh to some people, why can't Toyota.
It's not like it would cost that much to offer a slight variation in options. They could price the hell out of it and still find buyers. Besides, Toyota already makes a mass boat load of money from Lexus.
Come on, a 70k$ Land Cruiser? Talk about badge engineering. The margins are there, now give us something for it
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#8
Tech Info Resource
iTrader: (2)
The same enthusiasts who let Supras sit on the floor for an average 8 months in 1998? As much as I'd like to see Toyco bring back a real fire-breathing sportscar, it's pretty hard to argue with their numbers.
#10
CL Folding Team Starter
iTrader: (2)
The same enthusiasts who let Supras sit on the floor for an average 8 months in 1998?
Besides, it's not like the Supra was a 'real' sports luxury car in the sense. I'm talking about M3/C55-63/RS4 competitor. Either that or step up to the game and give the SL55-65/AMDB9/Gallardo something to think about.
#12
Lexus Fanatic
iTrader: (5)
However, I must say that some ill-minded Scion tC drivers constantly brainwash themselves into thinking that they are driving a Scion Supra Challenging basically anything on the street that moves. I really like tCs (especially in white) but they are not Supras.
#13
Tech Info Resource
iTrader: (2)
I couldn't afford one either, but I bought one anyway.
Now I own two tCs, a Supra, and an IS350. Before I restored the tC to it OEM configuration, it would give the Supra a real run for the money on a tight course. 500 lbs lighter, and about 6% better entry and mid-corner speed because of it helps a lot. But as soon as the road opens up...
And don't get me wrong, I'm very happy with the IS, but it will never be a Supra. Ever. I didn't buy it to be that anyway.
Now I own two tCs, a Supra, and an IS350. Before I restored the tC to it OEM configuration, it would give the Supra a real run for the money on a tight course. 500 lbs lighter, and about 6% better entry and mid-corner speed because of it helps a lot. But as soon as the road opens up...
And don't get me wrong, I'm very happy with the IS, but it will never be a Supra. Ever. I didn't buy it to be that anyway.