Toyota Motor Corp's plan to add a third line of vehicles may help the automaker shake a declining image among young consumers in the US, industry researchers said.
Japan's biggest automaker last month said it will add a third car line, named Scion, to its Toyota and Lexus nameplates to draw younger buyers and try to ensure growth. Toyota plans to show models and outline how Scion will operate within its existing dealer network at this week's New York International Auto Show.
The number of young consumers interested in Toyota's vehicles has declined in the past five years, said Art Spinella, an analyst at CNW Marketing Research in Bandon, Oregon. Of 3,300 consumers aged 16 to 24, 63 percent picked the word "stodgy" to describe Toyota's cars, according to a survey by CNW, whose clients include automakers and the US Federal Reserve.
"Their view is that Toyota is pretty much for older folks," Spinella said. "Scion is necessary because there's a threat of losing a major market segment over time."
Toyota's typical US customer is age 47, about the same as a General Motors Corp or Ford Motor Co buyer and at least three years older than the average for Honda Motor Co or Nissan Motor Corp, according to Strategic Vision. The San Diego-based company tracks US consumers for most major automakers.
"While we'd done a good job with the baby boomers, we needed to refocus on the youth market," Don Esmond, Toyota's US-based vice president and general manager, said in an interview. ``If we want to grow, we've got to find ways to reach that segment of trend-setting youth."
The company's American depositary receipts, which each represent two ordinary shares, fell US$0.60 to US$56.30 and have declined 23 percent in a year.
Toyota is adding the third line at a time when its US sales are strong. The company last year increased US sales 7.5 percent to 1.74 million cars and light trucks, pushing its market share just above 10 percent. So far this year, sales have risen 4.3 percent and its market share is up to 10.4 percent.
The company's results on the CNW survey place it ahead of several US-based brands and behind some Japanese and European rivals. General Motors's Buick brand was most closely associated with the word "stodgy," at 99 percent of the young consumers polled, while only 7 percent had a similar response to Volkswagen AG. The survey was conducted this month.
"It's not that they wouldn't buy a Toyota, but that they wouldn't buy one at 21," Spinella said. ``They might want a Toyota when they're 35 -- just not now.''
Volkswagen and Mitsubishi Motors are the most popular brands with young consumers.