Scion: Selling more by selling less

I wrote yesterday how Toyota is one of the few car companies that understand how to build a strong automotive brand. (Toyota teaches a lesson in branding).

Now for Toyota branding lesson part 2: Scion.

Sell more cars by selling less cars.

1 - When you discover that your main customer is older and you want to attract more younger buyers, you launch a new car line with a completely different experience in a completely different price range: Scion. Toyota was peeking into the looking glass on this one.

2 - Set a goal to sell 173,000 cars in 2006.

3 - Lower your sales goal to 150,000 for 2007 with plans to keep it there for a few years.

“I see sales this year of about 150,000 and don’t see that changing a lot in the next couple of years,” said Mark Templin, Toyota’s branding chief. “There’s potential to grow our volume in the future, but we’ll do it slow and gradual. That’s critical to maintain the brand we’re creating.” - via Bloomberg.com

Is Toyota Crazy?
Absolutely not. Keep in mind that while most other car makers are struggling (ford lost $24,000 a minute in 2006) Toyota has been steadily growing. Toyota understands there are too many ways a buyer can say why buy a new car when I can get a used one for way less money? They know that if the supply drops to say 10 percent and it becomes more difficult to find a great price on a used vehicle because even used vehicles are harder to come buy, people have more reason to buy a new one. If a certain Toyota still sales for a good price in two years (Landcruiser/Prius), there’s more reason to buy a new vehicle because you can get a new one for about the same price as a used one.

Toyota has been selling more cars by selling less cars. For some reason, Ford and GM don’t seem to understand this and they are suffering for it.