The cross-branding strategy that didn’t takeoff!

✨Since the COVID-19, the automobile industry has grown at a lower rate, with the majority of cars remaining unsold around the world.

✨All car manufacturers are now introducing several new car models around the world. Even though new cars are being introduced, some older vehicles are not being sold due to a variety of factors. Let me explain why this is so, using an example.

✨Maruti Suzuki introduced Baleno in the year 2015 and it’s one of the fast and best selling hatchback in the segment.

✨Toyota Glanza, on the other hand, introduced Glanza in the year 2019, but it doesn’t receive much response from the buyers.

✨Maruti Suzuki and Toyota both released car models that were similar to one another. People were perplexed as to why these two car brands introduced new models that were similar to one another, making it difficult for customers to decide which one to purchase.

✨The cars that were similar in both these brands are:
🎯Suzuki Baleno and Toyota Glanza
🎯Vitara Brezza and Urban Cruiser.

✨There are some models that look similar in both these brands.

✨So…why does these car brands introduce car models that are similar to each other?

✨This is because Maruti Suzuki and Toyota merged together in 2016 and became partners.

✨By this partnership, some models of the Toyota brand will be manufactured at the Maruti’s manufacturing plant and services/repairs for these cars will be done at Toyota’s plant.

✨Toyota will acquire nearly 5% stake in Suzuki and Suzuki will acquire nearly 1% stake in Toyota.

✨They manufacture cars that look similar to each other and this strategy is called as Cross-Branding Strategy. This strategy is also known as Badge engineering.

✨Customers did not respond well to this strategy since there was little difference between the two cars, so people always chose the car that was popular on the road and had good mileage and performance. This is why people preferred to buy Baleno rather than Glanza.

✨This strategy is used by more than just these two car manufacturers.

✨There were other brands that followed this strategy, but it was a failure. Some notable ones that did not receive a lot of attention from customers due to similar features are:

🎯Volkswagen Vento and Skoda Rapid.
🎯Nissan Micra and Renault Pulse.
🎯Nissan Sunny and Renault Scala.

✨As a result, it is in the customers’ best interests to select the brand when purchasing their preferred automobiles. The rise of the automobile industry is entirely dependent on the performance and new types of technologies and products that the brand incorporates into its product.

✨Article by: Somasundaraman R