It's Hip to be Square

Toyota aims for a new generation of buyers with love-it-or-hate-it styling on wheels.

From Kiplinger's Personal Finance magazine, January 2004

Forty years after Pete Seeger sang "Little Boxes (on the Hillside)," the folkie ode to look-alike houses, Americans are hitting the road in little boxes on wheels. Honda introduced the Element a year ago, and now there's the Scion xB from Toyota to take the look to new levels of squareness.

If the stark simplicity doesn't grab you, maybe it's not supposed to. Scion is a division of Toyota developed to create cars that appeal to Gen Y buyers -- 18- to 25-year-olds -- who tend to view Toyota as a brand for staid, unhip people (like their parents). The company didn't have to look far for product ideas. The Scion xB ($14,165) and its more rounded, hatchback counterpart, the xA ($12,965), have been sold in Japan under different names -- the xB since 2000 and the xA since 2002. The models made their U.S. debut in California this past summer and go nationwide in 2004. A sportier coupe will join the Scion lineup in June.

The gradual rollout fits into Scion's marketing campaign, which depends partly on winning over trend-setting "influencers." "Word of mouth is important, and buzz has high value. What better way to get people talking?" says Brian Bolain, Scion's national sales-promotions manager. While marketing is aimed at twentysomethings who go to auto shows and attend "wet" parties -- think all-night pool parties -- the median age of the first Scion buyers is a more mature 36. Owners include devotee Adrian Lazatin, a 31-year-old account manager at a computer-memory manufacturing company, who says he was "trying to get away from the fast and furious look."

Lazatin co-founded Team Scion West, an owners' group sponsored in part by Longo Toyota, of El Monte, Cal., where he bought his silver xB. The group gets together Sunday evenings to compare notes on new accessories, such as Lazatin's DVD-and-audio system with headrest monitors. But it's not just Gen Y and X dudes who show up. Lazatin says Team Scion West includes a 56-year-old pastor and a couple of other members who are even older.

While the xA hatchback looks a little like a VW Golf, the xB wagon has a love-it-or-hate-it design. Its snootily unsleek body rides low on a 98-inch wheelbase, and its overall length is eight inches shorter than the tiny Toyota Echo. But inside the car feels spacious, with as much front legroom as a Lexus GS 430, four more inches of headroom than a Sienna minivan and about as much cargo space as a Toyota Matrix. Split rear seats fold flat and are removable.

The 1.5-liter, 108-horsepower engine isn't going to win any grand prix, but gas mileage is a surprisingly thrifty 31 miles per gallon in the city, and steering and handling are responsive. The xB has an impressive list of standard safety equipment, including anti-lock brakes, traction control and electronic stability control (none of which is available, even as an option, on the Honda Element). A six-speaker stereo with a CD player that will read MP3 files is also standard.

Factory options are minimal (manual or automatic transmission and color) so that buyers can personalize their cars with about 40 accessories available from the dealer. Some buyers, including Lazatin, go straight to aftermarket suppliers to customize their Scions with superchargers, lowering kits, oversize wheels and other enhancements.

One major roadblock to concentrating on Gen Y buyers is that many don't qualify for new-car financing. So Toyota introduced Scion Solutions, designed to make borrowing easier for applicants with little or no credit history. Customers can go to www.scion.com to apply for a loan, get an answer via e-mail and walk into the dealership knowing what rate to expect.

--Reporter: Elizabeth Kountze

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