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No new Scion models soon despite falling U.S. sales: Toyota executive

An employee of Toyota Motor Corp prepares to open the company's showroom in Nagoya, central Japan July 1, 2013. REUTERS/Toru Hanai
An employee of Toyota Motor Corp prepares to open the company's showroom in Nagoya, central Japan July 1, 2013. REUTERS/Toru Hanai

By Bernie Woodall

DETROIT (Reuters) - Scion, Toyota Motor Corp's <7203.T> sagging youth-oriented brand, will not be rejuvenated by fresh models on its U.S. showroom floors anytime soon, a top U.S. Toyota executive said on Thursday.

Bob Carter, senior vice president of Toyota Motor Sales USA, said that while the company's main Toyota brand is rolling out fresh products this year, the 1,000 U.S. Toyota dealers that also handle Scion will have to wait longer.

"We have a very robust and very exciting product cadence coming for Scion, however, it's further down the pipeline," Carter told Reuters in an interview on Thursday.

Scion sales through August were down 1.6 percent from a year earlier. At this pace, this year's Scion sales will be only about 40 percent of that of the brand's peak year in 2006.

Carter would not be specific on the timing of any new product for Scion, saying only that nothing new was coming in the next half year.

Carter last month told U.S. Toyota dealers they could drop the Scion brand without penalty.

While some analysts said that signaled the beginning of the end of the Scion brand at Toyota, Carter said that was not so.

"We are absolutely committed to the brand as our youth strategy going into the future," Carter said.

Still, he admitted that Scion sales are sagging, and told the dealers that with no new product coming soon, they could without any repercussions devote the showroom space to Toyota-branded products that they now use for Scion.

Carter said none of the company's dealers have said they will drop Scion.

Toyota launched the Scion brand in 2003, and it is focused on the North American market.

The age of Scion buyers is younger than for that of most other brands sold in the United States. Carter says the average age of a Scion buyer is 32, but Detroit-area research firm Polk, now a part of IHS Automotive, said that average age is 49 years.

Tom Libbey of Polk said there are several ways to calculate the age of car buyers. He said Polk tallies from official vehicle registration data. Often, he said, the primary driver of a car may be younger than the person, such as a parent, who registers the vehicle.

Scion U.S. sales were 73,505 last year, and its 2013 sales through August were a modest 48,959, which is on pace for less than 70,000 this year. Its peak year for U.S. sales was 2006, at 173,034, when the brand had only three models to sell.

Through August, Scion accounted for only 0.3 percent of Toyota's 1.53 million in U.S. sales, while the premium Lexus brand accounted for 11.1 percent and the Toyota brand 88.9 percent.

Scion has five models. The best-selling one so far in 2013 has been the new FR-S sports coupe, which at 13,537 sold in the U.S. market is just slightly more than the tC sedan.

The boxy hatchback compact xB is next at 12,740 in U.S. sales through August, followed by the xD hatchback subcompact at 6,257 sold and the iQ minicar has sold only 3,078 this year.

Carter said he's confident that Scion sales will rebound.

"It's just going to take us a little longer to see the growth," he said.

While Carter would not talk specifically about future product, IHS Automotive has said that it expects an FR-S convertible to join the lineup next year, followed by a new xB in 2016 and a compact crossover in 2017.

One of the main reasons Toyota dealers are hanging on to the Scion franchise is that nearly 75 percent of Scion customers are first-time buyers, said Carter, and when they buy a second vehicle, they stay with Scion or move up to Toyota or Lexus.

(Reporting by Bernie Woodall; Editing by Tim Dobbyn)

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