* Toyota execs mull repositioning of 10-year-old brand
* One option: reinvention as a premium small car brand
* Scion also looks at hybrid, crossover, 4-door sedan
* Brand's 2012 sales were less than half its 2006 peak
By Ben Klayman
DETROIT, April 3 (Reuters) - Toyota Motor Corp executives are weighing repositioning Scion as a line of premiumsmall cars as they debate the youth brand's future in the UnitedStates.
A decade after its launch as a way to lure younger buyersinto Toyota showrooms, Scion is still a work in progress as itlooks to rebound from low sales during the recession. The brandis a relatively small seller for Toyota, with its five modelsselling 73,500 vehicles last year. That compares with Toyota'sfour-car Prius line, which sold almost 237,000.
The Japanese automaker's top executives concede that Scionis at a crossroads of sorts.
"There's still debate on where we should go from here," JimLentz, Toyota's newly appointed chief executive of NorthAmerica, told Reuters in a recent interview.
"One of the alternatives is we've always felt that there'sgoing to be a big segment created of premium small cars in theU.S.," he added. Lentz cited the push by the German luxurybrands into lower-cost entries such as the Mercedes-Benz CLA that will sell for less than $30,000.
As part of the effort to boost sales, Scion at the New Yorkauto show last week showed off a redesigned tC coupe that willgo on sale in late May. However, the brand's future is alreadybeing discussed and options include adding a hybrid vehicle, acrossover or even a four-door sedan.
"Any of them could happen," Lentz said.
Scion's sales total last year was less than half of its 2006peak, but far improved from 2010's nadir of about 46,000vehicles. Officials expect to sell about 80,000 this year andresearch firm LMC Automotive forecasts the brand to hit 108,000in 2020, but company officials insist the brand has never beenabout the numbers.
Introduced as concept vehicles at the New York show in 2002,Scion began selling cars the following year with the idea ofappealing to Generation Y buyers who perceived Toyota vehiclesas too stodgy. The brand's buyers are 37 years old, on average -the youngest in the industry - compared with age 50 for Toyota,and 75 percent of Scion buyers are new to the Toyota family,company officials said.
What Scion - whose name means "heir" and which refers to thebrand's cars and owners - stands for remains unclear to manyanalysts and consumers, however. Some industry analysts wereconfused last year when Scion introduced the FR-S sports coupeat a higher price than the brand's other four models.
"Toyota still hasn't found its feet with Scion," said ArtSpinella, president of research firm CNW Research. "They'restill hunting and pecking around, trying to figure out what theheck the darn thing is."
FORK IN ROAD
Lincoln Merrihew, auto analyst with Compete, a unit of WPPPlc's Kantar Media, said Scion is "at a fork in theroad."
Is the brand all about sporty coupes like the tC and FR-Sthat go in and out of fashion relatively quickly? Or is itquirky, yet functional boxy vehicles like the xB wagon, he said.Scion also sells the xD four-door hatchback and iQ urbanminicar.
Most Scion vehicles range from about $16,000 to $20,000. TheFR-S, which starts at $25,000, is a strange fit in the portfoliofor many analysts, some of whom insist the car would be a betterfit under the Toyota brand.
Rapidly expanding Scion does not seem to be in the cards."If we could add a sixth, we can probably manage that. I don'tsee us doing 10," Scion Vice President Doug Murtha said at theNew York show.
As the market changes, however, so might Scion, Lentz said.That discussion is not new.
"The Prius C, quite frankly, could have been a Scionproduct," he said. "We kind of debated which channel makes moresense." The car was placed with Toyota in the end becauseyounger buyers favor better audio systems or wheels, and it mademore sense financially to market all the Prius vehiclestogether.
Toyota's mistake with Scion was targeting a youngdemographic instead of creating a brand that appealed acrossmany demographics with a common psychological pull like BMW's Mini cars, LMC senior analyst Joe Langley said.
"Toyota still needs to develop a more clear identity anddirection for the brand," he said.