Remarks by Jim Farley - 2005 New York Auto Show

Jim Farley
Vice President
Scion, Toyota Motor Sales, U.S.A., Inc.
2005 New York Auto Show
Scion Press Conference
March 24, 2005, 8:30 am - 8:55 am EST
Javits Convention Center, New York
20 minutes

Thank you, Irv...

Good morning everyone...

Three years ago, almost to the day, Scion made its world debut right here in this room. That was the first time we introduced the Scion name... and people are still trying to pronounce it correctly.

We had two concept vehicles on stage, each reflecting features and styling that hinted clearly at future Scion products. The bbX was a decisive reflection of today's xB, iconic in nature, polarizing in design. The ccX coupe contributed many key elements to the tC, from the all-glass roof to the sophisticated interior and the powertrain.

The bbX and ccX concepts both conveyed the three key elements that are incorporated into all Scion products:

• Expressive styling,
• Elements of surprise, ranging from high feature content to interior roominess,
• And thoughtful versatility for all passengers and their cargo.

At that time we also acknowledged an emerging consumer group that every marketer wants to reach, yet was unlike any that our industry has ever seen... Generation Y. This group has grown up during thriving economic times.

As a result.

• They have high aspirations,
• They respect authenticity,
• They're impervious to mass media,
• They place a high priority on community,
• And they want to personalize the products they buy.

Most importantly, the trend-leaders among them strongly believe that an automobile is a reflection of their individuality. We knew that to reach these buyers we would have to create entirely new sales and marketing processes, paired with high-quality, high-content products with a subtle luxury flavor apparent throughout.

So how have we done so far?

Here's what some of our owners have to say.

(video)

That's what our owners think. Now let me give you the numbers.

• The xA and xB went on sale in June of '03.
• followed by the tC sports coupe in July of '04.

To date we've sold more than 140,000 cars, and the pace hasn't slowed. xB's iconic look naturally made it the face of the brand. It was often referred to as "the Scion," helping to create rapid awareness growth across the country.

xA's popularity remains steady, with monthly sales that often approach or exceed those of Golf or Mini. It continues to provide an excellent entry point into the Scion brand.

Our volume leader is tC. tC drivers are among the youngest in the industry, clustered with Civic and Mazda 3, with a median age that hovers right around 26. And its sales share achieved 20% of the sporty subcompact segment, just six months after launch.

Right now, Scion is the youngest nameplate in the industry with a median age of 34 years old. In a subcompact market that is, on average, 60% female, more than half of Scion's buyers are male, and more than half are under 35 years old.

We are reaching a diverse audience and most importantly, more than 85% of Scion customers are new to the Toyota brand. These new customers know what they want and don't hesitate to let us know about what they like... or what they don't like.

Throughout the Toyota organization, Scion has been an important new opportunity for learning.

For example, 856 out of 1,200 Toyota dealers now represent Scion. They're working with a customer who they might not have met before, using new tools like Pure Price and a time-saving online configurator.

The experience has been rewarding both for the dealers and the consumers

• 95% of our customers say that they would recommend their dealer
• 93% say they got exactly what they wanted at the dealership.

Accessories have been an important part of the Scion business model. Our consumers' appreciation for having a car that represents their specific ideals has translated into accessory sales two to three times as high as the average Toyota with items like body kits, interior lighting and subwoofers leading the way.

Our consumers also communicate differently, so we became the first automotive manufacturer to implement live online chat. Already, more than 50% of our customer contacts are through email and chat.

Promotional efforts have benefited from a non-traditional approach and an urban positioning. The integration of lifestyles, including music, art, and film, have provided Scion with a unique launch pad, and opened doors for editorial coverage that might not have otherwise existed for an automaker.

With advertising, we're continually refining our efforts, introducing new commercials, print ads, and online executions to engage this consumer where they live.

We rely on a layered approach that includes non-traditional media outlets, such as gaming and lifestyle Web sites and a wide array of specialty magazines, along with outdoor, radio, and highly-targeted late night cable TV.

And most of all, we rely on our owners, who have become better partners than we had any right to expect.

Recent Scion owners' events throughout the country have attracted upwards of 1,000 people each, along with hundreds of cars, each one a testament to the culture that Scion has become.

To keep the attention of these savvy consumers, we are working hard to keep our product line vital and full of surprise.

We just announced our most recent limited edition, the first ever for our sports coupe... the 2005 tC Release Series 1.0.

It's upstairs in the Scion booth, wearing a color and equipment not typically offered.

This Absolutely Red tC includes:

• A black interior with red highlights
• Unique front grille
• 18-inch alloy wheels
• Red battery tie down,
• Billet oil filler cap
• Red front strut tie bar
• And brushed aluminum door sills

We're only producing 2,500 of these, at $1,775 over the tC's base price. They'll be available beginning in April and like all Release Series models, once they're sold out, they'll never be offered again in the same configuration.

Release Series cars inspire our consumers, and stimulate our sales, which are targeted this year at 120,000 units. We estimate that 20% of those will be xA, with the balance divided almost equally between xB and tC.

With the housekeeping behind us, it's only appropriate that we move on to the reason we're all back in the Big Apple... to unveil another exciting new concept.

The designers were given the direction to create a concept that would represent the love of owning your first car, and the mindset that your car is more than just a mode of transportation, it's a lifestyle.

They focused on key words you've heard related to Scion... innovation, creativity, personalization, and discovery to complement the requisite style, versatility and surprise.

To be fit for the Scion badge, it had to...

• Command attention,
• Be distinctive, urban, fun to drive... and...
• Most importantly... it had to allow for customization.

Developed by Calty Design Studio in Newport Beach, California... built by Five Axis in Huntington Beach... ladies and gentlemen... the Scion t2B.

(reveal)

The t2B is a pure-concept.design-exercise... that combines the attitude of the xB.with the comfort and sophistication of the tC. It reflects the dynamic nature of this new generation of buyers and captures the essence of social activity.

I'm sure most of you remember your first car and all the memories that came with it. No matter what generation you belong to, the car has always been at the center of social activities. The t2B is true to this concept...created by Alex Shen, and Jin Kim, both from Calty.

t2B rides on an all-new platform, not currently in use on any other Toyota or Scion model, powered by a 2.4-liter engine.

The exterior design theme of the t2B is derived from "demado," which is Japanese for "bay window." Bay windows in a house give a sense of extended space in a room.

The designers took this idea and applied to it the concept's overall body style, resulting in a reverse trapezoidal shape... meaning that it's wider at the top than at the bottom.

The designers also incorporated a wedge roof for a sporty silhouette. This unique shape enabled development of an aggressive exterior and a versatile and roomy interior.

The t2B's personality is expressed through small, but significant, aesthetic details. Its face is intelligent, but intimidating. The bezel-framed, deep set headlamps round out the front corners and enhance the feeling of substance and width.

Asymmetry answers the call for the element of surprise that is inherent to Scion. The lower radiator grille houses one high intensity LED fog lamp that provides the illumination strength of two. Wide vertical intake scoops help cool the 14-inch brakes. Large fender flares give the vehicle a commanding presence and house 20-inch custom-machined alloy wheels.

The reverse trapezoidal idea is further emphasized with a wide screen back window. Visual elements from the front are carried to the rear with vertical, bezel-framed red tail lights and an exhaust tip and reverse light that are housed in the lower bumper.

The lack of door handles and b-pillars, a high beltline and the contoured edges convey sophistication and allow the eye an uninterrupted view of the vehicle.

The passenger side features another surprise... a large, single remote-controlled power sliding door that allows easy access to both front and rear seats.

Asymmetry is again apparent when you move to the driver-side, which incorporates suicide doors that swing open a full 180-degrees to reveal a surprisingly roomy interior, and a built-in speaker system.

The interior, designed by Calty interior project leader William Chergosky, and senior designer Naoki Hamajima, exudes a lounge-like atmosphere.

Since the t2B is purely a styling exercise, the interior design team decided to go with an "anything is possible" instinct. The t2B interior is conducive to socializing and personalization, which aims to let the buyer define how they want to use the car.

The theme inside benefits from the exterior "demado" idea. Since the widest point of the vehicle is toward the roof, occupants enjoy a sense of open space and headroom, especially with the two narrow fixed glass panels that run nearly the entire length of the roof.

Interior components come together to create an intimate environment for the occupants. The rear seats are slightly higher than the front, giving a stadium-like feel. Each of the four seats is contoured to the human body, and when the doors are closed, sloping, padded lining integrates with the seat.

When you come up to the stage, be sure to take a look at the tri-level instrument panel, the details in the seats and the electronic ticker tape that runs the perimeter of the interior.

Since both entertainment and personalization are essential to this generation, the ticker tape is meant to provide the user access to movies, games and music via downloads from the Internet, similar to what we see with cell phones today.

The upper layer of the instrument panel features an mp3 docking station that echoes the dual moonroof design.

The wide rear glass serves as a projection screen for movies, games or screen savers, thanks to a projector housed in the headliner.

Combined with the speakers in the doors, this effectively turns the car into an entertainment center when parked.

Along with this show car, Calty also designed two... one-quarter scale models to illustrate Scion's commitment to versatility: A t2B fastback and a t2B cargo.

Although all Scion t2Bs are only styling exercises, they provide us with an opportunity to evaluate new thinking, so we'd love to hear your comments.

You can see these two models for yourself in our main display... Please also visit our space in the tuner tent, where we have an all-new project tC created by tuner Neil Tjin, a customized yellow Release Series xB and a highly modified xA.

The Calty design team and I are here to answer any questions you may have. And please be sure to pick up a press kit on your way out.

Thank you for getting up early for our press conference and I hope you enjoy the rest of the show.