Why Toyota's Scion brand may sell more cars after it's dead and buried - Roadshow

There's also the simple matter of the number of sales outlets -- Toyota has more of them, with over 1,200 dealers to Scion's 1,004 franchises. That means more people will have the chance to see these rebadged models, even if they've come in to test drive a Corolla or Camry. In fact, at least one company official suspects the brand may have actually have been hampered by its parent company. Scion's communications manager, Nancy Hubbell, agreed it's possible that some model sales will improve under Toyota, noting, "Scion was competing against some of the biggest brands of the industry --including Toyota -- to get recognition."

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(Side note: Scion was laughably "overdealered." Its 1,004 showrooms lived off sales of just 56,167 units in 2015. That works out to 4.7 vehicles sold per dealer per month -- and that's with seven distinct model ranges in the Scion family. For perspective, Toyota sold 60,063 Avalon full-size sedans over the same time period, and it's considered a modest seller.)

As far as what vehicles will make the transition to Toyota, starting in August, the FR-S coupe, iA and iM will arrive in Toyota dealers wearing 2017 model year designations. Scion's long-running tC sports hatchback will end production at the same time.

The aforementioned C-HR crossover will slot in below the RAV4, giving Toyota an overdue foothold into the exploding small crossover SUV market. As Brinley notes, "The C-HR may be much more successful as a Toyota -- in part because Scion was not a brand one would expect to consider when looking for an SUV."

Fellow analyst Dave Sullivan, manager of product analysis for industry research firm AutoPacific, concurs, noting that Scion's closure was "probably overdue," and he found some logic in the timing of the announcement, noting, "They didn't want to have to launch this thing [the C-HR] twice, once as a Scion and again as a Toyota."

There could be other benefits to axing Scion, too. Toyota built its reputation by offering thoughtfully designed, safe and reliable products, but that's come along with a sheen of dullness, something that CEO Akio Toyoda, has been vocal about wanting to change. Absorbing the rear-drive FR-S will mean Toyota dealers have a sports car to sell again, and, as Hubbell notes, "[it] will definitely add a youth and sports element to the lineup that they [Toyota] don't currently have."

On the flip side, Toyota's dealerships will suddenly have a lot more models to make room for, and those storefronts that weren't already paired with Scion franchises will likely find themselves space constrained. That could force affected dealers to limit the number of examples of each vehicle line they keep in stock, which could lead to fewer sales of some models.

In addition, the consolidation effort will suddenly find Toyota overrepresented in small cars, with four distinct models: iA sedan, Yaris hatchback, iM hatchback, and the Corolla, America's second-best selling car. Inexpensive small cars have faced tough sales sledding recently, as cheap gas prices and greater availability of inexpensive SUVs have pulled buyers out of the segment.

Sullivan sees the potential for a sales increase with Scion models, but cautions, "We don't know what their pricing or trim levels will look like... they could make them more expensive and they may not be as good a value proposition as they are today."