Why Did Toyota Make The Scion Brand? The Company's History, Explained

According to Toyota, one of its guiding principles is to "provide outstanding products and services that fulfill the needs of customers worldwide." For decades, the company has worked diligently to achieve this, launching innovative vehicles like the eco-friendly Toyota Prius and developing remarkable engines such as the 2JZ inline-six. Toyota has vehicles for every type of driver; from a performance-oriented buyer to a mom picking up her kids from soccer practice and a farmer who needs a rugged gear hauler. 

About 41% of the world's nearly 8 billion inhabitants are under 24. When Toyota brainstormed the Scion brand, it planned on marketing its vehicles to this large segment of younger people. Unfortunately, the brand would only last some 13 years before Toyota dissolved Scion. Today, we examine Scion's history, what made it stand out in the vehicle market, and why Toyota ultimately chose to fold its youth-oriented label back into the main Toyota brand. The brand sold more than a million cars before it was reabsorbed in 2016, half of them to buyers under 35.

Toyota launched Scion as a separate brand in 2003. The automaker aimed to produce affordable, customizable vehicles that resonated with younger drivers. Scion started strong with the Scion xA and xB, which both sold well initially. Toyota revealed the xA at the 2003 Los Angeles Auto Show, and had the xA and xB on dealership lots as a 2004 model. The xA and xB were standouts from the start, painting a picture of vehicles fit for Generation Y. 

They were both hatchbacks, with the xA featuring a more muscular appearance compared to the boxier xB (shown above). Both cars were inspired by Toyotas that did well in Japan, namely the ist for the xA and the bB for the xB. Both of these early Scions came with the Toyota Echo's 1.5-liter DOHC 16-valve four-cylinder motor, which produced 108 horsepower. At launch, the xA had a base MSRP of $12,965, while the xB started at $14,165. These two vehicles set a high standard for the Scion brand, which Toyota would find difficult to match as the years rolled by. Now, let's see how Scion progressed.

The xA and xB were beloved worldwide, establishing the brand as a popular choice for many young drivers. Therefore, it was only fitting that Scion introduced a new vehicle: the tC, which debuted for the 2005 model year. The tC drew significant inspiration from another one of Toyota's big successes, the Celica. This Scion was a $16,465 sporty coupe equipped with power steering and sport bucket seats, among other features. 

The tC shared its 2.4-liter 2AZ-FE engine with the Camry. The inline-four could generate 160 horsepower and 163 pound-feet of torque. The tC featured a similar suspension setup to the Honda Civic Si, and the grippy Bridgestone Potenza RE92 tires allowed it to accelerate from 0-60 mph in just 7.4 seconds. If the xA and xB had established the Scion name worldwide, the tC carved it in stone. This model was Scion's greatest hit, with over 79,000 units sold in 2006 alone. 

In 2008, Scion decided to replace the xA with the xD. Toyota thought the xA was too ordinary for the American market, noting that it wanted to create a distinctive vehicle in a smaller package. Although it was affordable at $15,170 for the manual transmission version and $15,970 (about $24,000 today) for the automatic, the xD was equipped with several features designed to appeal to its target audience. These included a sport shift knob, carpeted floor mats, a sport steering wheel, electronic stability control, and optional 18-inch alloy wheels. Its 1.8-liter inline-four engine generated 25 horsepower and 24 pound-feet of torque more than the xA's, enabling it to accelerate from 0-60 in 7.9 seconds. 

Despite all the effort put into the xD, the vehicle failed to achieve the desired impact on the Western market. Sales fell sharply shortly after its release, signaling a grim outlook for the Scion brand. It didn't help that the second-generation xB, which was released that same year, was also struggling to connect with its audience. One of the main reasons why this new xB failed was because of its updated look. Many noted that it lacked the boxy feel that made the first generation xB a cult classic.

Scion introduced the iQ city car in 2012. The model faced several issues, including a recall for airbag failure. One of the most striking features of the iQ was its super-small size, which allowed it to be easily maneuvered and parked on crowded city streets. However, it was only big enough for two passengers to fit inside comfortably. The iQ came with a 1.3-liter inline-4 DOHC engine that produced 94 horsepower and 89 pound-feet of torque. 

Scion released an EV variant of the iQ, and the iQ was also rebranded as the Aston Martin Cygnet. The upscale British automaker made a few premium tweaks to the iQ, including a leather interior and that standout Aston Martin grille. However, the Cygnet — like the iQ — never really gained traction. One factor that might have contributed to this is its price. The Cygnet cost double that of the iQ's $15,995, despite the two cars having no major mechanical differences.

In the mid-2010s, Scion returned to the drawing board, eager to create something that its fans could connect with. By this time, the company was struggling to regain the success it had seen in its early years as sales continued to decline. The FR-S, an entry-level sports coupe with a four-cylinder engine and rear-wheel drive, should have been the vehicle to bring the company back on track. 

With sleek interior and exterior design, a light and well-balanced chassis, excellent fuel economy, and sharp handling, the car seemed to have most of the aspects that would make it a hit. The 2013 FR-S's flat-four engine produced 200 horsepower and 151 pound-feet of torque. The six-speed automatic transmission had paddle shifters and rev-matched downshifts, while the manual had a short-throw shifter. The FR-S could accelerate from zero to 60 in 6.5 seconds with the stick shift and had a starting MSRP of $24,200 (about $33,000 today).Sadly, due to poor marketing, it didn't enjoy the success it deserved. More than 18,000 buyers drove home in a new FR-S in 2013, but sales of the model dropped to below 7,500 units for 2016.

In 2016, Scion would have its final go at producing new vehicles before its absorption into Toyota. The company debuted the iA and the iM as that year's offerings. The iA was a rebranded Mazda2 sedan offered in only one trim. Its 16-valve inline-4 DOHC engine produced 106 horsepower and 103 pound-feet of torque. The iM was yet another rebranded vehicle: the Toyota Avensis. 

The iM featured a 1.8-liter four-cylinder engine that produced 137 horsepower and 126 pound-feet of torque, allowing it to accelerate from a standstill to 60 miles per hour in 8.6 seconds. Both the iA and the iM had good things going for them, which might explain why Toyota rebranded the models and brought them back in 2017 after it had absorbed Scion. The iA came as the 2017 Toyota Yaris iA, while the iM returned as the 2017 Toyota Corolla iM. The FR-S also got another chance to prove its worth as the 2017 Toyota 86.