Car Names – Rebranding Models
“What’s in a name? That which we call a rose by any other name would smell as sweet.” – Romeo and Juliet by William Shakespeare.
Shakespeare may have written “What’s in a name?”, but according to auto manufacturers, the answer is “Lots!” That may be the reason why they release the same vehicle under different names in different markets. Like “letting go” for “firing” and “restructuring” for “layoffs”, this act too has a trendy name, or if you would have it, a euphemism – “badge engineering.” This practice is also known as “twinning” – creating twins of existing models.
If you consider yourself a car expert who can recognize one from a distance of half a mile, you may be in for a surprise the next time you visit a different country. The Chevrolet Optra you own may turn out to have quite a different name in Australia – Holden Viva, as a matter of fact. Move several thousand miles from Down Under to Far East and the same car is the Buick Excelle in China. Confused? Don’t be. You are experiencing the promotional strategy called badge engineering. We’ll try to explain why it exists in the first place.
Let’s start with an analogy: suppose you are a loyal supporter of the Notre Dame football team. Granted they are not doing very well of late, but you continue to support them, as do many others, hoping for a turnaround (this is assuming you are not a fan of Notre Dame’s traditional rivals like Michigan or USC). This is what marketers would call “brand royalty.” Therefore, if a marketer wants you to like a player, all he has to do is dress him up in the jersey of the Notre Dame team, and you will like the player by association with your favorite brand.
Extend this to automobiles. Suppose a manufacturer has two brands, A and B, in two different markets, X and Y. If a car of brand A is doing well in X, the manufacturer may consider introducing it in Y. But A has no presence in Y, where B has considerable brand royalty. In such a situation, it makes business sense to change the car brand from A to B before introducing it in Y.
Brand loyalty is not the only determinant behind having different names for the same car. Cost and time considerations also come into play. Often it makes more economic sense to expand the market for a tried and tested product than to design and manufacture a completely new one. And badge engineering is not restricted to having different names for the same car in different markets; sometimes, it may be implemented in the same market to target different market segments.
No discussion on badge engineering is complete without the mention of General Motors. Historically, GM has had several different brands under its wing, and has often implemented this strategy to expand the ranges of different brands in one market such as selling a single car as a Chevrolet, a Pontiac, and a Buick within the US. Sometimes, they are differentiated by certain characteristics usually associated with that brand. For example, Chevrolet customers expect tighter steering and suspension, whereas Buick customers expect a softer, more luxurious ride.
Also, GM has sold the same model under different names in different markets depending on brand loyalty and consumer perception. For example, when GM took over Daewoo’s passenger car division after the Korean company filed bankruptcy, it continued with the Daewoo brand in its home country. However, in Australia, Daewoo models were branded as Holdens while they were named as part of the Chevrolet brand in most other markets like India. That is why cars like the Daewoo Matiz hatchback became the Chevrolet Spark in India.
Badge engineering is not restricted only to big manufacturers with large portfolios. Sometimes, two companies cooperate to implement this strategy, either by trading off products that each brand lacks in its lineup or by pooling their resources to create a joint product, and then selling it individually. The third cooperative method is when one company allows another company, otherwise unaffiliated, to market a revised version of its product.
An example of the first method is the deal that was signed between Honda and Isuzu in the early 1990s. As a result of this agreement, the Honda Odyssey was branded as an Isuzu Oasis because Isuzu needed a minivan, while the Isuzu Rodeo was sold as the Honda Passport because Honda wanted an SUV in its portfolio. It is noteworthy that, to date, the Oasis is the only minivan ever to be sold by Isuzu.
An example of the second method is the 26-year marriage between General Motors and Toyota that led to the birth of New United Motor Manufacturing, Inc. (NUMMI). While GM saw it as an opportunity to learn about Toyota’s legendary manufacturing processes (JIT, kaizen, etc), Toyota welcomed this venture for allowing it to gain a foothold in the American market. The first plant was opened in 1986 and closed earlier this year, but the products that were created by NUMMI can still be seen on the roads today. These include Toyota Corolla/Chevrolet Prizm and the Toyota Matrix/Pontiac Vibe. Another example would be the cooperation between Ford and Volkswagen that resulted in such cars as the VW Sharan, Ford Galaxy, and SEAT Alhambra.
An example of the third method of cooperative badge engineering is the Volkswagen Routan, which is simply a re-branded Dodge Caravan. Ford also entered into an agreement with Chrysler to sell the same car in a luxury trim as the Chrysler Town and Country. So, basically, the Dodge Caravan, the Volkswagen Routan and the Chrysler Town and Country are the same car.
A place where you can expect to see badge engineering is the luxury segment where a manufacturer may not have many brands in its portfolio, but has at least one mainstream and one premium brand. In such cases, a model from the mainstream line is often decked up with luxury items and improved electronics, and then sold as a model of the premium brand. Some may argue that the two models are different due to the changes made, even if cosmetic, but this is an argument that cannot be easily resolved.
Examples include the Lexus ES, which is simply a luxurious Toyota Camry, and the Acura TSX, which can be considered a premium Honda Accord. Even GM, whose Cadillac brand is considered a luxury brand and Chevrolet a mainstream line, has the Cadillac Escalade heavily based on the Chevrolet Tahoe.
In conclusion, as always, be knowledgeable about what you buy. Or as the ancients would say, “Caveat Emptor!” (Latin: Let the buyer beware).