For all of you who felt offering literally the same cars under different monikers is a useless idea, here is some good news for you. You will no longer be subjected to the same cars with different logos, at least from Renault and Nissan as these partners have finally decided to let go of the badge-engineering strategy in India according to Livemint.
This decision will be effective after the launch of their last shared-platform product, the Nissan Terrano, which we all know is a slightly tweaked version of Duster and will be launched in September.
So what is Badge Re-engineering? Here is a short crash-course :-
- It is a strategy used by manufacturers to market similar products under two different brand names.
- It is made use of by manufacturers when they plan to launch brands with lesser investment amounts as well as in a shorter time period.
- Badge-Engineering is a sort of an austerity drive. It cuts down costs involved in design and manufacturing by the shared use of platforms and components, thereby improving the companies’ margins.
- But badge-engineering brings in its wake its own caveats as well. The most notorious among them is brand cannibalism, in which one model suffers a setback in sales due to the other similar model’s exploits.
- It could result in widespread confusion regarding the models, and lead to a lack of differentiation also.
- Pundits opine that this strategy isn’t a sure-fire technique in all markets, hence restraint is best advised. It works only when one of the brands has a strong, loyal following.
Nissan and Renault had turned to this strategy to corner the Indian market share since they were new to the market. Quite a few of their products have been essentially the same, with just minor tweaks and different badges. The exemplary ones are the Nissan Micra-Renault Pulse and Renault Scala-Nissan Sunny twosomes. Needless to say, they have fared badly in the Indian motown and this divergence from the plan by Nissan-Renault seems to be a good move forward.
Vincent Cobee, Nissan’s Corporate VP, stated that they could learn from their past mistakes, on being asked to comment on this development. Even Marc Nassif, MD of Renault India, expressed a similar opinion. However, its true that the badge engineering helped both the companies to launch products quickly and at lesser investments. Now they are established and can move their own course.
In 2012-13, the Micra’s average monthly sales fell to 955 units from 1,553 units in the previous year. Renault’s Pulse, which was launched in January 2012, managed to sell 465 units a month during the last fiscal year. Micra and Pulse together sold 1,420 units a month in 2012-13, according to numbers provided by the Society of Indian Automobile Manufacturers (SIAM).
What we can now look forward to are genuine company products coming from both the makers individually. Though Nissan and Renault are global alliance partners, they do not have a badge-engineering strategy anywhere else in the world.
Was it a clear case of overkill??