Here’s Why Toyota Is Waiting on Scion
Akio Toyoda, head of — you guessed it — Toyota Motor Corp. (NYSE:TM), told Scion dealerships some bad news recently. “We will continue with Scion, but Toyota has limited resources. We need to prioritize. I have been telling them they will have to wait a few years,” Toyoda said to Automotive News.
The automaker has been hit by a number of damaging factors in recent years, including the global financial crisis, recalls due to an acceleration problem, and the 2011 earthquake in Japan. Toyoda says that there are a number of demands requiring the company’s attention, and Toyota therefore has to pick and choose one thing at a time. The company is looking to invest in Lexus, as well as more fuel-efficient vehicles.
“Going on the offensive means making even better cars and changing the way in which we produce cars. We expect to see a totally changed landscape in our plants,” Toyoda said to Automotive News. He added that the Scion brand isn’t doing what the company needs it to, and as a result, Toyota is shifting focus and cutting back on Scion franchises in U.S. dealerships. “There is a perception among some dealers that they are expected to sell the Scion brand, and this is not the case. Some just don’t want to wait. It’s a matter of whether dealers trust my word to wait.”
Dealers are demanding new products to put in the marketplace, but Toyoda says they’re better of being patient, allowing the company to improve. “If I may use the analgoy of an athlete, it’s like he spent more time in actual competitions rather than enough time in training, being given challenges targets to attain. What we are doing right now is enhancing the physical flexibility of those athletes.When they say, ‘We want to enter the competition,’ we tell them to wait for a while,” he said in his interview with Automotive News.
The competition may not wait though, with General Motors Co. (NYSE:GM) close on Toyota’s heels in the market. Still, Toyota has been the top global automaker in terms of sales for half a decade — if you excuse its loss to GM in 2011, post-earthquake and tsunami. With the sale of 7.41 million vehicles, Toyota beat out General Motors’s 7.25 million units sold, according to the Detroit Free Press.