Badge Engineering - Problems and Controversy

Problems and Controversy

Vauxhall Omega Cadillac Catera

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.

SEAT Arosa

Origins of General Motors' badge engineering dates back to the early 1970s when the Chevrolet Nova compact was rebadged by the upscale Buick Apollo (Skylark after 1975), Oldsmobile (Omega), and Pontiac (Ventura II and Phoenix) divisions as entry-level cars. By the late 1970s, GM's downsized B, C, and D platform cars set the standard of the inevitable when badge engineering and platform sharing were fused together as a means to trim excess production expenditures - similar-looking bodystyles with distinctive appearances which was a trend throughout the 1980s. This trend continued with subsequent platforms from the J-car to its redesigned FWD full-size sedans. 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 save for cosmetic differences, 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. Other manufacturers have given badge engineered cars distinct branding and style, high-quality interior materials, wide range of convenience features, and performance powertrains, as these are key to distinguishing them from mass market equivalents and making these appeal to consumers; successful luxury cars following this formula include the Lexus ES, Acura TL, and Audi A3. For Toyota, "Camry's reliability and quality --and Lexus' dealership experience" helped the Lexus ES succeed in the market but it reinforced negative connotation that Lexus vehicles being largely more upmarket Toyotas.

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.

Mercedes-Benz Sprinter Dodge Sprinter

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 (which was done earlier when the Oldsmobile brand was discontinued in 2004), and that Ford sell its Volvo division, which was previously a separate carmaker in its own right. GM phased out the Pontiac brand in October 2010, while Ford in March 2010 sold Volvo to the Chinese manufacturer Geely Automobile (after it had sold its other luxury brands of Jaguar, Land Rover, and Aston Martin). Its Mercury brand was phased out in December 2010.

Vauxhall Vivaro Nissan Primastar Renault Trafic

In Indonesia, the Timor, derived from the South Korean Mazda 323-based Kia Sephia, proved very controversial. The fact that the Timor was not assembled in Indonesia, rather, it was imported completely built-up, stirred up annoyance among car companies, especially Toyota, which were producing many vehicles in the country.