Normally we think of rebadging as a situation when a stronger automaker (profits, engineering prowess, brand, etc.) builds cars for a weaker one to sell under its own name, the idea is that the weaker automaker could benefit by getting one of its competitor's better products and the supplier of the cars can benefit via having another sales channel, an opportunity to save on costs, etc.
But how about doing it the other way around?
Part of the problem Detroit faces right now is that even if they start making world beating products their brands are so weak that it's very likely the customers they need to introduce these products too will never even try them, let alone give them any significant consideration. So what if Detroit put some money into building a couple of great products in collaboration with a foreign competitor, and then sold that product under the name of the stronger competitor?
Just think about it: if Chevy were to build a Malibu that was superior to the Accord and Camry in every way, it would still have trouble denting the sales of either cars because Accord and Camry shoppers generally never consider Chevy in the first place. But, if Chevy were to make a deal with Honda where the cars were sold as Hondas or even under a new brand name all together, they would probably generate a lot more traction in the marketplace and do wonders for the GM (GM) brand.
It's the harsh reality of having a weak brand: even if your product gets great reviews and appears stellar, customer perceptions are hard to change and they'll still be wary of your product.
Obviously it's unlikely that Honda (HMC) (or Toyota (TM) or Nissan (NSANY)) would agree to such an arrangement, after all, what's in it for them? However a smaller automaker like Subaru is a possibility, especially with the new Chevy Volt that's slated or a 2010 release.
A Subaru Volt would be a lot easier to sell then a Chevy one, and revealing later that the car is really a Chevy once it's winning in the marketplace is a possible way to strengthen the Chevy brand. At this point GM has to do something drastic to rebuild its brand, and doing the rebadge thing in the reverse of the usual way might be the way to go.
Desperate times call for innovative tactics.
Disclosure: at the time of publishing the author didn't own a position in any of the companies mentioned in this article.
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This article has 19 comments:
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greygoat
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1 Comment
Aug 17 10:54 AM-
dr. detroit
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1 Comment
Aug 17 11:09 AM-
hoffman23
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22 Comments
Aug 17 11:13 AM-
theBike45
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3 Comments
Aug 17 12:36 PM-
SpclEd
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3 Comments
Aug 17 01:43 PMAll manufactures do this to a degree. What's the difference? The Author attempted to answer this. It is the perceived low evel of quality of U.S. auto products, regardless of how it is badged.
Stop the cross pollenation and put Engineering first.
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failureengineer
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1 Comment
Aug 17 01:45 PM-
Gumby
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237 Comments
Aug 17 02:31 PMI think the real reason we are wary about our domestic makers stems largely from the quarrels between managements and unions. Either unions or managments got to shut up and do the job! This will do the trick!
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Gumby
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237 Comments
Aug 17 02:37 PM-
SpclEd
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3 Comments
Aug 17 02:42 PMIt’s like asking does chocolate taste good? (Even though it might be a chocolate-turd cookie that is being reviewed).
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JimmyD
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2 Comments
Aug 18 06:51 AM-
Ames Tiedeman
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784 Comments
My Website
Aug 18 09:10 AM-
Paul Killinger
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1025 Comments
Aug 18 09:27 AM-
DavidR
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10 Comments
Aug 18 12:06 PM-
33Nick
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43 Comments
My Website
Aug 18 01:25 PM-
Markham Lee
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73 Comments
My Website
Aug 18 02:22 PMIf GM doesn't reposition its brand in the hearts and minds of customers, a host of new products won't save the company even if they're the best cars on the road for the simple reason that people won't try them out in the first place.
Merely putting out a new product with a commercial saying "we're the best" isn't going to get the job done, if the customer is already convinced that the competition is better and GM is trying to saw them with marketing fluff.
So for the Volt and other new GM products to be successful they need to do something innovative and/or drastic to fix their branding issues, whether that's partnering with a foreign automaker via rebadging (or selling Volts under a new brand name at their dealerships, etc), or something else that increases the standing of the GM brand.
If you don't fix the brand, you can't fix the company.
Management and Union quarrels in my mind aren't the reason why many Americans look down their noses at the products coming out of Detroit. It's more than that, it's how the cars perform, styling, quality, etc, people feel they're making a smarter decision when they buy Japanese.
One of the failings of the J.D. Power Surveys is that they're often touted by the automakers themselves, so when Buick says "Hey we're tops in Quality" consumers ignore as marketing fluff and focus on their own experiences, or maybe someone like consumer reports that seems more objective, and whose rankings favor the Japanese cars.
The other issue is that it's just not about quality, resale value, levels of luxury, styling, cachet, etc, are all factors as well. A Buick SUV and a Lexus SUV may cost the same and be the same quality, but which one would most people rather drive?
Ames I serious doubt that Chevy is the #1 selling brand in the U.S., especially when they need to use incentives to sell their cars and Toyota and Honda don't need to. Furthermore if I want a Malibu I can to the local Chevy dealer and walk away with one from a sales person who will roll out the red carpet for me, while the Honda dealer won't negotiate and will tell me if that if i don't take the one I'm looking at now it will be sold by tomorrow.
During the month of July over 2 1/2 more Accords (ditto for Camrys) were sold than Malibus: analyticalwealth.com/b... and Honda and Toyota are crushing Chevy in terms of resale value.
I don't see where you get #1 brand from.
In the end it's just an idea, domestic brands rebadging foreign ones has never worked, so maybe the opposite direction will. Of course you run into many of the same branding issues, BUT if people find out that the Hyundai they bought is really a Chevy it could potentially have more of a positive effect then people finding out the Chevy they bought is really a Hyundai.
The former surprises people and makes them think: maybe that company is better than I thought, whilst the latter just reinforces their negative feelings: "See, Chevy is so bad they had to get Toyota to make the car just to get people to buy it".
-M
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heywood
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1 Comment
Aug 19 12:01 PMThe Volt at the oft-discussed $40K price point is going to be a very difficult sell under any brand. Despite all the discussion about it being the "savior" of GM, it's a niche product that's more of a PR effort than a viable volume product. The whole point is to prop up the image of the Chevy brand, so why would anyone want to market it under another brand?
Whoever wrote this piece could not know less about the car business.
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Markham Lee
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73 Comments
My Website
Aug 20 04:00 PM1) Proper Brand management & development
2) The right brand matched with the right product
Eagle wasn't a new brand for Chrysler it was a brand they bought from AMC.
Saturn started out as a great brand with loyal customers (how many other American brands in the early 90s had fan festivals?), then GM began to mismanage it.
GEO was a mistake from the beginning as it wasn't really selling anything different from the rest of GM.
New brands have indeed been launched successfully so there is nothing inherently fatuous about launching a new brand, the problem is that launching a new brand is pointless if you don't do it RIGHT.
Mind you Subaru is a small brand but it does have a reputation for building high quality products, and the very people you needlessly derided are indeed the very ones who often purchase Priuses and would be interested in the Volt.
As always, thanks for reading
-M
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CarguyNH
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2 Comments
Aug 25 03:48 PM-
CarguyNH
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2 Comments
Aug 25 04:11 PM