New York — Toyota Motor Corp.'s struggling youth-oriented Scion brand unveiled two new cars, including its first-ever sedan.
The automaker showed the 2016 Scion iA sedan and 2016 iM hatchback at a Tuesday event ahead of the New York International Auto Show. It was a disappointing year for Scion in 2014: Even though Toyota's overall U.S. sales rose 6.2 percent last year to 2.37 million, sales of the five Scion models fell 15 percent to 58,000 vehicles.
Despite low gas prices, Toyota is still convinced that younger buyers will want fuel-efficient, gas-sipping smaller models.
Toyota, which first launched Scion in 2002, continues to struggle with the brand. It is has gotten poor marks in initial quality surveys. Sales peaked at more than 173,000 vehicles in 2006, and market share has continued to fall.
"Toyota's Scion division has never delivered the kind of consistent, high-volume traffic the automaker hoped for when it introduced the 'youth brand' back in 2002," said Karl Brauer, senior analyst for Kelley Blue Book. "A combination of funky styling and low-cost materials — both designed to appeal to young buyers — seemed to turn away as many shoppers as it pulled in.
"With two all-new models debuting in New York, Toyota is clearly refusing to admit defeat. And the look and feel of both Scions suggest the brand may have finally found the right balance between low cost and 'cheap' — a balance that's eluded it for over a decade."
Brauer noted that Scion still doesn't have an SUV. He called that an "undeniable handicap for any brand trying to grow volume."
The iA sedan has a dramatic sporty look. It will retail for around $16,000 with a 1.5-liter engine that gets 42 miles per gallon on the highway with an optional manual transmission.
The iM hatchback will cost more — closer to $20,000 — and get 37 mpg on the highway. It will also have a manual option.
Despite the low prices, Toyota is billing the brand as a strong value with fancy touches. The iA will have "premium chrome accents and soft-touch trim and surfaces." They cars have standard Bluetooth and a 7-inch Display Audio system.
Toyota said the iM could arguably stand for "instant message" and the "message to young buyers would be that they can now get a fun-to-drive, high-style, high-content, high-MPG rated hatchback for a whole lot less than they'd expect."
Akshay Anand, analyst for Kelley Blue Book, says a sedan is crucial for Scion: "A sedan should do wonders for the brand, as most of its lineup fits smaller niches, from the tiny iQ to the sports-oriented FR-S. Overall consideration and heightened awareness are two of Scion's biggest issues, and a car that hits a broader chunk of the market is definitely something that makes sense."