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Badge engineering is a term that describes the rebadging (that is, the replacement of the branding trademark) of one product (especially cars) as another. Due to the high cost of designing and engineering a totally new model, or establishing a new brand (which may take many years to gain acceptance), it is often more cost-effective to rebadge a single product multiple times.
The term derives from the trademark emblems fastened inside or onto the outside of the car. While differences were originally confined to the badges used on the model, more typically it involves slight styling differences, usually limited to the headlights, tail lights, and front and rear fascias. More extreme examples involve differing engines and drivetrains.
Badge engineering is common, but it should not be confused with platform sharing within a company. Platform sharing is different from rebadging, as an automobile platform may be used in many different ways and applications, such as using a single platform to produce and sell a sedan and an SUV. Two such products are legitimately different automobiles, whereas badge engineering involves the sale of essentially a single vehicle.
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Different types
Badge engineering often occurs when an individual manufacturer, such as General Motors, owns a portfolio of different brands, and markets the same car under a different brand. It may be done to expand the ranges of different brands in one market without developing completely new models, such as selling one car as a Chevrolet, a Pontiac, and a Saturn by GM in the United States. It may also be done to sell the same model in different regions and markets simply under a different name. For example, cars built by Daewoo, now owned by GM, are now only badged as Daewoos in South Korea and Vietnam. In other markets, they are now badged as Chevrolets. Similarly, in Australia and New Zealand, where Daewoo was unsuccessful, they are now rebadged as Holden models. The Australian car manufacturing industry experienced major badge reengineering during the 1990s as part of the failed Button car plan.
Another way badge engineering may occur is when two separate companies trade off products that each brand lacks in its lineup. A prime example of this would be the first-generation Honda Odyssey being rebadged as an Isuzu Oasis because Isuzu needed a minivan, while the Isuzu Rodeo was rebadged as the Honda Passport because Honda had the need for an SUV.
Badge engineering may occur when one company allows another, otherwise unaffiliated, company to market a revised version of their product, as with Volkswagen marketing a re-skinned version of the Dodge Caravan or Chrysler Town and Country as the Volkswagen Routan.
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Two different automakers can also pool resources by operating a joint venture to create a product, then selling it each as their own. For instance, General Motors and Toyota formed NUMMI. The vehicles produced from this venture (though not necessarily at NUMMI itself) included the Toyota Corolla/Chevrolet Prizm, and later the Toyota Matrix/Pontiac Vibe. Another example was the cooperative work between Volkswagen and Ford to create the VW Sharan, Ford Galaxy and SEAT Alhambra.
Language problems or marketing decisions may lead to a car being given a different model name in a certain country, although this may not constitute badge engineering as the car is still sold under the same brand name. For example, the Mitsubishi Pajero is called the Shogun in the UK and the Montero in Spanish-speaking countries and North America, because pajero means wanker in Castilian Spanish. The Buick LaCrosse was sold as the Buick Allure in Canada, as la crosse means masturbation or swindling in Québécois slang. The Volkswagen Santana was sold as Passat in the US, and as Corsar in Mexico, because its name brought to mind the infamous general Antonio López de Santa Anna.
Luxury Vehicles
Badge engineering also occurs between luxury brands and their parent companies. A parent manufacturer may take a model from a mainstream brand, upgrade it with more features, technology, luxury and/or style, then sell it as a more expensive model under a premium marque.
An example of this is the Ford Motor Company taking its well known family sedan Ford Taurus, and selling it as the Mercury Sable, or a Ford Expedition being sold as the Lincoln Navigator. Another example is General Motors with its rebadged version of the Chevrolet Suburban, Tahoe as the Cadillac Escalade, and their rebadged version of the GMC Acadia and Saturn Outlook, the Buick Enclave. Buick and Oldsmobile were frequently considered GM's upmarket brands compared to Chevrolet and Pontiac, while Cadillac was considered the luxury brand.
Probably the most renowned example is Audi, a brand within the Volkswagen Group. While very few cars share the same bodywork, nearly all Audis use components from their more pedestrian counterparts, sold as Volkswagen Group's mass market brands. Although this has been a practice when Volkswagen first acquired Audi in 1964, through the last fifteen years the brand was shifted more up-market to compete with more luxurious Mercedes-Benz and BMW. As an effort to place Audi as a premium marque, Volkswagen frequently introduces new technologies in Audi-branded cars before fitting them to more mainstream products (such as Direct-Shift Gearbox).
Japanese carmakers have followed this practice as well, such as Honda's Acura line, Nissan's Infiniti brand, and Toyota's Lexus marque, as the entry-level luxury models were based on their mainstream lineup. For example, the Lexus ES is essentially an upgraded Toyota Camry, the Lexus LX is an upgrade of the Toyota Land Cruiser, and the Acura TL and Acura TSX are derived from the USDM and JDM Honda Accords. The luxury models, however, are more likely to have more than just cosmetic differences; they often receive improved engines and drivetrains.
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Problems
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Although intended to save development costs by spreading design and research costs over several vehicles, excessive badge engineering can be problematic if not implemented properly. Having multiple car brands can greatly increase selling cost, as each brand must be marketed separately and often requires its own dealership network. Badge engineering can also hurt overall sales by resulting in "cannibalism" between two or more brands owned by the same company, by failing to develop a distinct image for each brand, or by allowing the failure of one version of a model to carry over to its rebadged "siblings." The failure of the short-lived Eagle brand sold by Chrysler is often attributed to it being crowded out by the company's other more established divisions and the failure to effectively incorporate the new marque into Chrysler's dealer network.
The ill-received Cadillac Cimarron is one of the most widely-cited examples of problems with badge engineering. The car was essentially identical to the Chevrolet Cavalier, which resulted in poor sales, as the company found few buyers willing to pay nearly twice as much for a car that offered little more than the Cavalier. This resulted in damage to the Cadillac brand image. The Jaguar X-Type failed for similar reasons as well since it was based on the Ford Mondeo, although reviews were largely not negative, and it hurt the exclusivity of the Jaguar marque.
The Lincoln Navigator, derived from the Ford Expedition, proved very successful. However, the Ford Explorer-based Lincoln Aviator failed. The fact that the Aviator was virtually identical to the Navigator in all regards but size made it difficult to generate attention among potential buyers, and the Mercury Mountaineer had already proved sufficient to cater to buyers wanting a slightly more upscale alternative to the Explorer.
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As the U.S. auto industry continues to flounder, discontinuing or merging one or more brand divisions has been floated as a cost-cutting idea the Big Three could implement. Some in the industry had, for example, suggested that General Motors discontinue its Buick and/or Pontiac lines, and that Ford sell its Volvo division, which was previously a separate carmaker in its own right. GM is now in the process of phasing out the Pontiac brand, while Ford is considering selling Volvo (after it had sold its other luxury brands of Jaguar, Land Rover, and Aston Martin).
Models produced under licence
A variant on rebadging is licensing models to be produced by other companies, typically in another country. One example of this is the British Hillman Hunter, which was license-built in Iran as the iconic Paykan.
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See also
References
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