Badge engineering is a term that describes the rebadging of one model of car 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 for it to gain acceptance), it is often more cost effective to rebadge a single product multiple times. However, excessive badge engineering can be problematic for car companies, and even detrimental. Having a single car sold under multiple identities may hamper overall sales, and can make marketing become difficult. It may also be an issue for a manufacturer to distinguish the differences between two models without damaging the one's reputation.
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. The term derives from the pot metal trademark emblems fastened onto the outside of the car or onto the dashboard.
Brand 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. The two products are different automobiles, where as in brand engineering involves using the identical (or nearly identical) finished product.
Different types of brand engineering
Brand 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 pool resources by operating a joint venture to create a product, then selling it each as their own, or trading 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
Language problems or marketing decisions may lead to a car being given a different model name in a certain country (for example, the Mitsubishi Pajero is called the Montero in Spanish-speaking countries and North America and the Shogun in the UK) although this may not constitute badge engineering as the car is still sold under the same brand name.
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, technoloy, luxury and/or style, then sell it as a model under a premier marque. An example of this is the Ford Motor Company taking its more mainstream Ford Expedition, and with exterior, interior, and technological work, selling it as the Lincoln Navigator.
The term is also used for the makers of consumer electronics and household appliances sold under different names, especially the house brands of discount merchandisers, who can make specifications that would result in a lower-quality product as well.
List of badge engineered vehicles
For a list of vehicles that have been considered to be the result of badge engineering, see:
Models produced under licence
A variant on rebadging is licensing models to be produced by other companies. One example of this practice than in Malaysia.
Its first local car manufacturer, Proton, started producing versions of the Mitsubishi Colt and Mitsubishi Lancer, rebadged as Proton Saga and Proton Persona from 1985 until today (2006). This was followed by Malaysia's second vehicle producer, Perodua, that manufactures Daihatsu Cuore, Daihatsu Mira, Daihatsu Move, Daihatsu Terios known in the local language of Malay as Perodua Kelisa, Perodua Kancil, Perodua Kenari and Perodua Kembara, respectively. This practice continues until today with Inokom, which rebadged South Korea's Hyundai Atos, Hyundai Getz and Hyundai Matrix. Naza transformed the Peugeot 206 into its own Naza 206 Bestari and in 2006, unveiled a locally assembled Kia Picanto called the Naza Suria.
Badge engineering by means of product licencing has it downsides, in Malaysia, for example, the initial success brought by badge engineering for Proton quickly wore off when the motoring public became tired of its limited product range that only underwent minor cosmetic changes rather than major model changing makeovers, which often occurs with licenced companies. From 1985 until 2006, Proton seems to be relying heavily on technology transfers, unable to design the engine, chassis and other important aspects of car manufacturing by itself. Thus, the market share of this once dominant local car manufacturer in Malaysia dropped to 70% (along with its share prices).