Wednesday, June 11, 2003

First Oldsmobile. Is Toyota next?

It's 1980 and you are the #3 car maker in the United States, behind only Chevy and Ford. You have the golden touch and eveyone wants what you got. Times are so good your plants run 3 shifts a day 24/7 and still can't keep up. Fast forward 20 years to 2000 and GM announces that they will begin phasing you out over the next few years. What happened? You got aged out of the market. While you where selling cars like hotcakes to the WWII generation the Boomers where going elsewhere. So many WWII gen bought an Olds as a retirement car that your image which had once been youthful and innovative became dowdy and boring before anyone knew what was happening. The car that in 1970 was filling the spot Acura fills today was by 1990 considered persona non grata by the Boomers and a 'grandpa-mobile' by GenX. Major changes are made in the '90's and you are on the road to recovery with some GenX'ers starting to take notice when GM has to cut you lose to get rid of dead wieght. After 107 years you will be dead.

Will Toyota be next to be aged out of the market?

They certainly are on track to do just that. With the average Toyota buy approaching 50 Toyota, demographicly speaking, is finding itself in an eerily similar spot that Olds was in the last '70's. Right now they are on top of the world but soon, too soon for us all, many of their buyers are going to stop buying cars. After age 60 few Americans continue to buy new as they switch from wage earnings to retierment ernings. With a average buyer at 50 and no product pulling in GenX the writing is on the wall if they sit and do nothing.

This is where Toyota's new car line Scion comes in. Toyota has the advatage over Olds of forknowledge. Toyota has the time to alter their image before it's too late and bringing in exciting new products is the way to do it. The question is, "Is Scion the right plan?". I'm afriad the answer is no and while this by no need means Toyota will be gone in 20 years at best they are going to waste a lot of time and money before they figure this out.

The problem with their plan is they are giving up on GenX. They want to keep selling to the dying Boomers and are ramming Scion right at GenY. GenX which doesn't want yet another bland Camry or uninspired Corolla also isn't looking for a stripped box that comes in 32 differnet flavors. We (full disclosure: I'm an Xer myself) want fun but can afford much more car than the $13k, 108hp Scions. We are getting WRX's, Mazda6, TSX's, supercharged Pontiacs and the like. Cars that are in Toyota's price range but offer more zoom. Toyota is squeezing GenX right out of the showroom and in return is on the verge of being classified persona non grata by us just as our parents shunned Olds. This is the danger in their plan. If they can get GenY hooked on the Scion they are safe, if not then they are Oldsmobile.

Can colored shift selectors and speaker options make a gereration gowning up with movies like The Fast and the Furious excited about driving a 108hp box that can't get out of it's own way? Toyota loves to ramble on constantly about how "customizable" the Scions are but then fail to mention the only things customizable are the interior trim pieces. There are no perfomance mods for these little econoboxes and according to Car & Driver and other auto mags they desperately need them. The GenYers that want a fast car aren't going to buy a Scion. The GenYers that want to look like they have a fast car aren't going to buy a Scion that everyone in GenY knows damm well is a gutless wonder. These will be left to people wanting a wierd unique car, people that want 'Toyota quality' but are on a budget and out of touch Boomers wishing to appear youthful and that is not a plan that will keep you on top.

Case study: The Honda Element has the unique destinction of being the first car directed at GenY. The hip looking ads protray a bunch of kids that look like they just got out of High School out looking for a cool beach or heading into the mountains. This car is aimed right at GenY with both barrels of Honda's formitable marketing team. Average age of an Element buyer? 41.

Oh what a feeling.
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