History
The first case of badge engineering began in 1917 with the Texan automobile assembled in Fort Worth, Texas, that made use of Elcar bodies made in Elkhart, Indiana.
"Probably the industry's first example of one car becoming another" occurred in 1926 when Nash Motors' newly introduced smaller-sized Ajax models were discontinued in 1926 after over 22,000 Ajax cars were sold during the brand's inaugural year. The Chairman and CEO of the company, Charles W. Nash, ordered that the Ajax models be marketed as the "Nash Light Six", a known and respected automobile brand that was the name of the company's founder. Production was stopped for two days so Nash emblems, hubcaps, and radiator shells could be exchanged on all unshipped Ajax cars. Conversion kits were also distributed at no charge to Ajax owners to transform their cars and protect the investment they had made in purchasing an automobile made by Nash.
A later example was Wolseley Motors Limited after it was bought out by William Morris. After World War I the "Wolseley started to lose its identity and eventually succumbed to badge engineering." This was repeated with the consolidation of Austin Motor Company and the Nuffield Organisation (parent company of Morris) to form the British Motor Corporation. The rationalization of production to gain efficiencies "did not extend to marketing" and each "model was adapted, by variation in trim and accessories, to appeal to customer loyalties for whom the badge denoting the company of origin was an important selling advantage ... 'Badge Engineering', as it became known, was symptomatic of a policy of sales competition between the constituent organizations."
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