Badge engineering: the right and wrong ways to copy a car

When is a Lancia not a Lancia? It seems likely that in the future it will be a Chrysler. The two struggling marques are likely to be merged, according to the man in charge of both, Sergio Marchionne, leading to similar cars being named Lancia in some markets and Chrysler in others. At the recent Detroit Motor Show, Chrysler, which like Lancia is now run by Fiat, showed off a car that was a rebadged version of Lancia's curvaceous Delta hatchback.

While the tie-up between these disparate carmakers might seem unlikely, there have been plenty of other odd motoring couples. In fact, badge engineering - selling the same car under at least two names - has gone on for decades. Take Wolseley and Riley, names that have long since disappeared from the showrooms. While these were proud, independent carmakers very early in the 20th century, by the 1930s they were merged into larger groups, and this started to show in the cars they released. For example, the Riley 1.5 and the Wolseley 1500 were reworked versions of the legendary Morris Minor. Australian car buyers were treated to similar vehicles that went under the names Morris Major and Austin Lancer.

It was a case of a motoring group trying to save development costs and exploit the customer loyalty the individual brands had built up over previous decades. "They were differently positioned as different cars with different price bands," says Peter Rawlinson, the chief executive of the automotive public relations agency PFPR and a former European head of public relations for Chrysler. Rawlinson admits that, in the past, such cases of badge engineering "could be looked upon cynically" as the cars involved were insufficiently different from one another. It appeared as though the manufacturers were trying to maximise their sales while skimping on investing in the product.

"I think there are risks if it's purely a case of badge engineering," he says. "Definitely it's a term that's seen in a negative way, as something they do to be expedient and not necessarily putting in the effort." But it is not just on model development costs where manufacturers can save money through badge engineering, according to Rawlinson. While there are certain costs that are multiplied with each new brand, such as dealer network, press launches, public relations and marketing efforts, there are many costs that can be eliminated, according to Rawlinson.

"Take the Volkswagen group. They have different showrooms, but behind the scenes there's common finance, common human resources, common import and distribution," he says. Indeed Rawlinson believes the Volkswagen group shows badge engineering at its best and also illustrates his view that "nowadays it's a case of how narrow or wide is that term". Rather than just stick a different badge on the front of each car, the company ensures its various products are sufficiently differentiated from one another. Volkswagen builds several related cars under different names - the Volkswagen Polo, Seat Ibiza and Skoda Fabia use the same platform, for example - but only an expert would notice the commonalities.

"I think badge engineering is something that's done very much for the right reasons and that the term is possibly obsolete today," Rawlinson says. "You won't find many vehicles today where just the badge and grille are different." Rawlinson also believes the Chrysler-Lancia tie-up could work, with Lancia's sister brand Fiat bringing its smaller, fuel-efficient engines to the party. Lancia could gain from Chrysler's larger vehicle expertise.

There is no guarantee that marriages that look good on paper will work in practice, however, and Chrysler itself provides an example. Daimler, which owns Mercedes-Benz, separated from Chrysler despite synergies between the brands that Rawlinson says were "exceptional". "Daimler was taking some four-by-four experience from Jeep, while Chrysler benefited from some amazing Mercedes-Benz engines," he says.

One recent example of more or less putting a new logo on the front of somebody else's car concerns the Renault Safrane sold in the UAE. The Safrane was an executive car made by Renault in France between 1992 and 2000, but the elegant vehicle that now graces the UAE's motorways is a very different animal to this European-designed and -built car. The Gulf version of the Safrane is a badge-engineered version of the old-model Nissan Teana and Samsung SM5, executive saloons popular in the Far East.

According to Jonathan Sandys, a senior designer at Design Q, a UK design consultancy, badge engineering of this kind is a relatively inexpensive way for Renault to increase its presence in the Gulf market. Renault is not the first car company to tinker with a South Korean-made car and sell it as one of its own. Many Chevrolets in the UAE, such as the Spark and the Aveo, are designed and built by Daewoo, another General Motors brand. By rebadging Daewoos, Chevrolet has gained a comprehensive model line-up, selling everything from the 800cc Spark to the muscular Corvette.

Mr Sandys has found this to be an unlikely partnership. "They are putting the Chevrolet brand on these vehicles without applying what might be considered Chevrolet styling characteristics," he says. "That hasn't been particularly successful [in Europe]. I cannot think of a happy union where there've been mergers of that sort." He is also sceptical about the Chrysler-Lancia link, saying the two brands are so different it is hard to see how a hybrid car of the two will not result in "both brands losing their identity".

"I cannot understand how it will work," he says. "Some other large manufacturers have taken ownership of brands, but they have recognised they stand alone and won't dilute one brand with another." [e-mail]