Toyota to drop the Scion brand

On Behalf of | Feb 17, 2016 | Mergers & Acquisitions |

As the Los Angeles International Auto Show draws car enthusiasts across many generations, car companies are hoping to gain new customers for future sales. This was the idea when Toyota Motor Company launched Scion, a brand that was designed to attract new, younger buyers and bring them to the Toyota brand.

The thought ostensibly was that after buying a Scion, a customer would be more likely to buy a Toyota or Lexus. For the most part, the plan worked. Through its Scion brand, Toyota sold more than 1 million cars, with nearly 70 percent of its customers being first time Toyota buyers and half of them being under the age of 35.

But alas, all good things must come to an end. Toyota recently announced that it would be ending the Scion brand in 2017.  Essentially,  the FR-S sports car, iM hatchback and iA sedan will appear under the Toyota brand.

 According to an report, Scion’s principals are rejecting assumptions that declining sales led to the brand’s demise. However, the numbers don’t lie. Sales have declined 68 percent since the company’s peak in 2006. Nevertheless, the change is being touted as a step forward for Toyota instead of a step backwards for Scion.

Companies going through branding changes are likely to have a number of legal questions regarding how the business will go forward; including how the company may enter contracts, how it will market itself, as well as any personnel changes. All of these decisions suggest the need for experienced legal counsel

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