Toyota gives up on millennial/hipster brand Scion

Toyota said Wednesday it will drop its Scion brand, the often-quirky line of cars it launched in the United States 13 years ago targeted at American millennials and hipsters.

The world's largest automaker said it will stop selling cars under the Scion name by summer, and instead merge them back into its main fleet for the US market.

Jim Lentz, chief executive of Toyota Motor North America, said the Japanese automaker's decision to eliminate the Scion nameplate was dictated by a market shifting away from small cars and by changes in the buying habits of younger Americans.

"Today younger buyers still want fun-to-drive vehicles that look good, but they are also more practical," Lentz said in a statement.

Introduced in 2003, the Scion line pitched a range of smaller, under-$20,000 cars to young buyers, from the xA mini-hatchback and the breadbox-like xB to the respected FR-S rear-wheel-drive sports car, sister to Subaru's BRZ.

Scion "allowed us to fast-track ideas that would have been challenging to test through the Toyota network,” said Lentz, the executive in charge of the brand at its launch.

At the outset it had success with critics and achieved some sales aims. About 70 percent of Scions were purchased by customers new to Toyota, and 50 percent of buyers were under 35 years old.

But sales tumbled to just 56,000 units in 2015, down three percent from the previous year despite a surging market overall.

By comparison Toyota sold 363,000 Corollas, its entry-level sedan, in the United States last year.

"When Scion debuted in 2003, it was intended to bring in a younger demographic to Toyota, but growth was derailed by the recession and the brand never reached its intended volume targets or demographic," said KBB analyst Rebecca Lindland.

Edmunds.com analyst Jessica Caldwell said cheap gasoline has diverted buyers from small cars to larger sport-utility vehicles and trucks, and Scion did not have any vehicles in those segments.

"The Scion brand never quite caught on in the way that Toyota hoped it would," she said.

"By offering Scion products under the Toyota badge, the company can save marketing costs and eliminate what had effectively become a distraction from its core business focus."