Maridady Blog

BADGE ENGINEERING

What is badge engineering?

Maridady Motors describes badge engineering, also known as rebadging, as the process of attaching a different badge or trademark to an existing automobile and marketing it as a distinct vehicle model. Widely practiced in several countries, including Japan, manufacturers often refer to these as "OEM supply" or "OEM-supplied" vehicles, indicating their re-badged origin from or for other manufacturers.

Why is badge engineering practiced? 

The reasons behind badge engineering encompass various factors, further illustrating its widespread use within the automotive industry:

1. Life cycle extension: This involves transferring a product that has reached the end of its life cycle to another brand, typically within the same holding company or joint venture. By rebranding and repackaging, manufacturers can extend the product's market presence and profitability.
2. Faster Time to Market: Re-badging enables quicker market entry by leveraging existing designs, technologies, and manufacturing processes. This approach allows manufacturers to respond rapidly to market demands or enter new segments without investing extensive time and resources in developing entirely new models.
3. Cost efficiency: By sharing platforms and standardizing components such as chassis, drivetrain, and technology, manufacturers can significantly reduce production costs. This cost-effectiveness is particularly evident when designing multiple models from a single platform, allowing for economies of scale in manufacturing.
4. Market segmentation: Re-badging enables manufacturers to appeal to different market segments by creating variations of the same vehicle. For instance, a model might be rebranded with different features or styling to target various consumer demographics.
5. Entry into new markets: Re-badging offers a quicker entry into new markets by leveraging existing models, technologies, and brand recognition. This approach can help companies establish a presence in regions or segments where they lack a foothold.
6. Brand Utilization: Companies with multiple brands under their umbrella can leverage badge engineering to differentiate their brands and offer products at various price points without investing in entirely new models. This strategy helps maintain brand presence and diversity in the market.

According to Maridady Motors here are some disadvantages of badge engineering:

1. Brand dilution: Excessive re-badging of similar vehicles under different brands can dilute the uniqueness and individual identity of each brand, leading to consumer confusion and decreased brand loyalty.
2. Quality perception: If not executed properly, re-badging can create perceptions of inferior quality or lack of originality among consumers, especially if the changes between models are minimal.
3. Lack of innovation: Relying too heavily on re-badging may hinder innovation and creativity in product development. Manufacturers might prioritize cost-cutting over introducing genuinely new and innovative designs or technologies.

Examples of re-badged cars include:

• Toyota Vellfire sold as Lexus LM
• Daihatsu Terios sold as Toyota Rush
• Ford Ranger sold as Mazda BT-50
• Mazda Demio sold as Toyota Yaris
• Nissan AD Van sold as Mazda Familia
• Mazda 5 sold as Nissan Lafesta Highway Star
• Daihatsu Boon sold as Toyota Passo
• Chevrolet Trailblazer sold as Isuzu MU-X
• Fiat Fullback sold as Mitsubishi L200
• Suzuki Ciaz sold as Toyota Yaris Ativ

These vehicles are available for purchase at Maridady Motors, located along Kiambu Road in Nairobi, Kenya. 

This practice persists across various automotive manufacturers, showcasing the industry's strategic approach to diversification, cost efficiency, and leveraging existing platforms for multiple brands or markets. Yet, careful consideration of its potential drawbacks is essential to maintain brand value and consumer trust.