Millennials are shifting car ownership model; ask Toyota
By Norihiko Shirouzu
TOKYO (Reuters) - When Toyota Motor looked to the future at the turn of the millennium and aimed its new, edgy Scion small-car brand at twenty-somethings, it could not have guessed that the model would be dead after just 12 years.
In killing off the brand last week, the Japanese company was responding to the changing habits of millennials - those born in the 1980s, 90s and 2000s - who are reshaping the traditional model of car ownership.
"Surveys we do tell us young buyers are less interested in owning cars," one of those behind the Scion brand told Reuters.
"They either don't have the financial leeway or they're substituting car ownership with ride-sharing or car-hailing services like Uber [UBER.UL]," he said, adding Toyota would redirect its Scion resources to its Toyota and Lexus models.
Toyota launched the Scion brand hoping Generation Y-ers would become the grown-up Toyota buyers of tomorrow. It worked, for a while, with the brand selling 173,000 cars in 2006, but sales dropped to just 56,167 last year, prompting the world's biggest car maker to call time. Some Scions will be re-badged as Toyotas.
"I don't think my generation hates cars, but the way we look at cars is different now," said Brandon Perez, an 18-year-old construction management major at California Polytechnic State University in San Luis Obispo.
"For my parents' generation ... buying a car was a big goal. Cars are still important and kids in my age group still want to drive, but we're not as auto-centric."
Perez also feels young people today are practical and don't mind buying used cars. "Cars are so reliable now, and more durable," he said. Continued...