The Duster has been a huge success for Renault in India. The car accounts for more than 70 percent of the company’s total sales. In 2013, though, Nissan, Renault’s alliance partner is due to launch a cross-badged version of the Duster under its own brand. It is another matter altogether that Renault-Nissan’s earlier attempt at selling cross-badged cars haven’t worked. Even the mighty Volkswagen group is struggling with it.
What is Cross Badging?
A car manufactured and sold by company X is also sold by company Y by making cosmetic changes. For instance a different logo, change in headlights, taillights, bumpers and so on.
The Rationale
Reduce Cost It costs $300-500 million to develop a new car. Makers with several brands (Volkswagen, Renault-Nissan alliance) can optimise this cost by selling the same vehicle across its various brands.
Complete the Bouquet
Feed vehicles in the network of a car company which a) does not have funds to develop a new car, or b) does not have a strong product portfolio or doesn’t have a particular vehicle in a segment.
Why Has the Indian Market Not Responded?
(This story appears in the 22 February, 2013 issue of Forbes India. You can buy our tablet version from Magzter.com. To visit our Archives, click here.)
I feel that cross badging is nothing just but selling the existing or the same product in a different packaging ,and the result is cannibalizing your own procuts which was in the case of VW and skoda
on Mar 11, 2013