State of Scion: What's next for the original alternative-rock car brand

“This is gonna be awesome!” the spiky-haired guy in the Scion video screams, epitomizing in five words the enthusiasm the youth-oriented brand has tried to stand for over its seven-year history.

But now there's competition. It's not enough to make quirky cars and market them to the alt-rock generation. Nissan has the Cube. Honda has the Element. The xB was once the iconoclast. Now Kia, of all companies, has an entire lineup of vehicles built on that off-beat personality.

The man with the spiky hair then appears. Now he's traded his sunglasses for a pinstriped suit, purple tie and cufflinks. When he's not appearing in videos, Scion vice president Jack Hollis is clearly more formal, though the former minor-league baseball player still has a trace of California in his voice.

“Scion is nontraditional, it's an underground brand,” he says, pointing to the diverse makeup of its customers and their median age of 37, by far the youngest in the car business.

Except, somewhere along the way, Scion became a bit more of the establishment as other carmakers entered the fray with unconventional stylings and impressive arrays of technology. When Scion launched in 2002, most of its current tC buyers couldn't drink legally and were barely old enough to vote. The iPod craze--to be followed by the iPhone and iPad--hadn't yet revolutionized technology and culture. And the idea of talking to your car with something called Sync was still five years away.

Fast-forward to fall 2010.

Fewer cars are being sold. The economy is in tatters compared with previous booms. The people in Scion's target market have fewer jobs and less money. Some may be living in their parent's basements.

So, what's next for the brand?

Scion has two new products set to roll out in the next four months. The tC is expected to provide a sales jolt, with projections of 35,000 to 45,000 in 2011. It's joined by a small car called the iQ in January, which takes aim at urban buyers with its diminutive size.

The tC is a solid upgrade compared with its predecessor, offering a new four-cylinder engine found in the Toyota Camry that makes 180 hp, up 19 hp from last year's model, and 173 lb-ft of torque (11 lb-ft more). There are new transmissions, with a choice of six-speed automatic or manual gearboxes, an upgraded suspension and beefier brakes. Scion calls this the second generation of the tC, though the cosmetic changes are fairly subtle, with the rear end getting a more aggressive appearance. About 30 percent of buyers are expected to take the stick.

The sound system kicks with 300 watts and eight speakers, plus a choice of three head units. The tC gets an improved interior with larger seats, and the steering wheel is sporty and fitted with quality materials.

It's a solid car. But Hollis is candid, saying Scion can't stop there. Generations X and Y were among the initial Scion buyers, but older Gen Y members are well past 30 now--more suburban enclave than underground. Scion is already turning its sights to Generation Z, which is in middle school at the moment.

“We need to take more risks,” Hollis says. “The youth of today don't need a car for their social life.”

But at some point, they will need a car. And Hollis is trying to figure out how to make it a Scion.

By Greg Migliore