UPDATE: Toyota has issued an official statement that Scion will be killed off and folded into the Toyota brand. The automaker said that the decision to kill off the youth-oriented brand was in response to customers' needs and the fact that Toyota's newest vehicles are also appealing more toward the younger generation that Scion was aiming at.

"This isn't a step backward for Scion; it's a leap forward for Toyota. Scion has allowed us to fast track ideas that would have been challenging to test through the Toyota network," said Jim Lentz, CEO of Toyota Motor North America. "We could not have achieved the success we have had without the incredible support of Scion's customers, dealers and team members, so supporting them throughout this transition process will be one of our top priorities."

Scion's death will see three of its cars move to the Toyota lineup. The FR-S, iM, and iA will continue under the Toyota brand while the tC will be discontinued after August 2016 and will have a final release edition to commemorate its end of production. The upcoming C-HR small crossover, on the other hand, will hit the U.S. market under the Toyota brand, slotting below the RAV4. Owners of Scion vehicles will continue to go to Toyota dealers when their cars need service or repairs. The 22 dedicated team members of the Scion brand will be given the opportunity to take on new positions at Toyota.

More on Scion:

During its existence, Scion was used to test out sales and marketing strategies that included set pricing where the customer didn't need to negotiate a price, mono-spec cars where you only picked the color and transmission choice, and an extensive array of accessories that allow owners to personalize their cars. Additional sales and marketing strategies that Scion pioneered included the Service Boost prepaid maintenance plan, Release Series special edition models, and grassroots marketing, where the brand was discovered by the public through unique events. The brand's Pure Process Plus program was also notable because it enables buyers to complete much of the purchase process online.

Stefan Ogbac contributed to this post

After nearly 13 years, Toyota has decided to drop the youth-oriented Scion brand. Despite an attempt last year to rekindle its mojo with two new models, the iA and iM, Scion is closing up shop.

Scion has suffered years of sales declines, but it seemed like Toyota had a plan to turn the brand around. In addition to the Mazda2-based iA and rebadged Euro-market Toyota Auris, the iM, Scion was expected to add a version of the Toyota C-HR crossover to its lineup. A C-HR concept sporting a Scion badge was even shown off at the recent 2015 Los Angeles auto show last November. The new cars are more practical and mainstream-looking than the boxy, quirky-cool xB, the vehicle that helped the Scion brand establish its identity. They appeal to a wider audience but still have a hint of that rebellious streak Scion is known for. The revamped lineup seemed like a new beginning for the brand.

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But alas, Scion's rebirth was not to be. A brand targeted at young people in an era when those young people are buying fewer and fewer cars occupies an extremely narrow niche. In 2015, the entire Scion brand sold 56,167 cars -- less than the number of Toyota Avalons sold. Its highest sales year was in 2006, when it sold 175,000. And for years, many have questioned whether Scion was even reaching its target demographic effectively. Some reports placed the average age of the Scion buyer at 49. The notion that young buyers would grow up with Scion, graduate to something in the Toyota lineup, and ultimately end up in a Lexus seemed like a good idea at the time. But it apparently hasn't worked out.

Have recent low gas prices hurt? Did FCA killing the Chrysler 200 and Dodge Dart help push Toyota's decision? Probably didn't help.

Scion will be remembered for its edgy products and out-of-the-box marketing strategies. Though the kids may not have been receptive to the products, few would deny that Scion events were cool, authentic, and genuinely fun. The brand's no-haggle pricing was another innovative tactic designed to attract new buyers that might otherwise be intimidated by the car buying process. And when Scion's lineup was at its dullest, after some started piling on Toyota for ignoring the brand and letting it wither, Toyota gifted it with the FR-S, a rebadged version of the rear-drive Toyota 86 and Subaru BRZ sports car. We previously reported that a second generation was planned, and that could still be on the table with the FR-S now being folded into Toyota's lineup.

It was a noble effort, Scion. Thanks for keeping it real.