Toyota is phasing out its Scion-badged iQ from the US after the car’s size, price and fuel economy failed to attract US consumers.
US sales of the iQ fell 50% to 2,040 last year after Toyota gave dealers more leeway on submitting orders based on demand, Doug Murtha, Scion’s brand chief, told Bloomberg News. Production of the xD ended in July, leaving Scion with four models.
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The iQ won’t be “staying in the lineup too much longer”, Murtha said. “The rest of the products will carry on with us.”
Bloomberg said Toyota plans to introduce three Scion models in the next three years, including two in the second half of 2015, to revive the brand founded more than a decade ago to appeal to younger consumers. Scion sales slid 15% last year to 58,009. That total is fewer than sales of 12 of the company’s individual models in the US, including the Toyota Avalon and Lexus ES sedans.
The iQ was a “healthy experiment” that taught Toyota important lessons about US buyers’ tastes, Murtha told Bloomberg. Even though the automaker gave the iQ 11 air bags and engineered it to achieve a four-star crash rating, consumers couldn’t get comfortable with its dimensions.
“Physics are physics, and they’re nervous about driving a vehicle that size,” he said. US buyers also associate size with price and aren’t as interested as Europeans in the idea of a premium small car, Murtha said.
At 37 miles (60kkm) per gallon in city and highway driving, iQ also achieved the best combined fuel economy rating of any non-hybrid in the US. But Americans look at a car the iQ’s size and think it ought to get 60 mpg, Murtha said.
“We’ve learned lessons on all of those fronts and that’s going to influence how we approach vehicle development going forward,” he said.
Toyota needs to sell at least 100,000 Scion vehicles a year for the brand to be sustainable and keep its dealers engaged, Murtha said. The company has committed to plans for new products that will help Scion reach that threshold, which was last achieved in 2008, he said.
“There are some dealers who felt like we made some promises to them about the refresh rate of the product and the level of investment and they don’t feel like we’ve lived up to that,” Murtha said. “We have three brands in the market and we need to support all three of those brands.”
