Aaron65’s recent review of the Austin A55 Cambridge prompted me to consider the practice of badge engineering and its actual commercial success, its presumed purpose.
A quick clarification of the terminology is in order – although we all know it as badge engineering, and I will use that term in this blog, I personally hate the term. It does not describe engineering, it describes a marketing tool used to fulfill a marketing objective and promote perceived differentiation within a company’s line-up. There may be some science behind it, but that doesn’t make it engineering.
To test this quickly and easily, we need an example of a product that was badge engineered to compare with a similar product that was not. North American examples close enough to each other for this purpose are hard to identify – Chevrolet to Pontiac to Buick may have been badge engineered but there was clear product differentiation there. A better example, from perhaps the most complex and prolific practitioner of the art – was Britain’s BMC.
BMC was created, of course, in 1952, by the merger of Austin and the Nuffield organization. Austin had essentially one brand – Austin, but the Nuffield Organization had 4 – Morris, competing directly with Austin, along with Riley, MG and Wolseley in ascending order of power and plushness. And, despite the merger, BMC maintained 2 separate dealer chains in the UK – one for Austin and one for the Nuffield brands. One reason was the power of the Austin and Nuffield dealer associations; although market share held by BMC, and the lack of significant foreign competition was a likely factor. I have to confess that whilst the profusion of BMC brands throughout the 1950s and 1960s give great scope and material for historical review, it is perplexing that it was allowed to continue for so long.
In 1958, BMC started a phased introduction of what we now know as the Farina series saloons, starting with the Wolseley 15/60 (1500cc, 60bhp), followed by the Riley 4/68 (4 cylinders, 68 bhp), the MG Magnette Mk3–also with 68bhp, the Austin Cambridge A55 Mk2 and the Morris Oxford Series V. Of these, only the Austin sat alone in a showroom, as the Nuffield brands were all sold together by franchisees with rights to four brands. Be aware also that this is referring essentially to the UK presentation of the cars – right through to the 1970s, BMC and BL were using marquee names and even model names differently in varying overseas markets, even those close to the UK. Check this out here.
So, we can compare the fate of the single Austin range against the 4 tier, badge engineered Morris – Riley – MG – Wolseley range.
For the series 1 cars, from 1958 to 1961, the Austin achieved 52% of the total sales of all of these Farina cars, the Morris 30% and other Nuffield brands 18%. So, Nuffield dealers, with the wider range, were behind.
For the series 2 cars, from 1961 to 1970, the position was reversed – the Nuffield brands achieved 52% of the total. For the full period covering the series 1 and 2, Austin achieved 49% with one car and the Nuffield brands, 51% with four, of which 34% percent was achieved by the Morris Oxford.
So, did badge engineering actually achieve anything here? It didn’t sell more cars (49/51 is a pretty close split) but 15% of the cars sold were higher price MG, Riley and Wolseley brands. Did this add sales or allow BMC to convert a Morris buyer into a Wolseley buyer? It would be fascinating to know if this were the case, which it should have been given professional selling techniques. It would be even more fascinating to know how much BMC made on a Wolseley versus a Morris or an Austin. We will never know that, not least, I suspect, because BMC never knew. And did this benefit outweigh the additional costs BMC incurred in creating three (!) premium brands to sell alongside the Morris? We’ll never know that either. Remember, there were some mechanical variations between the brands, with twin carburettor engines for example as well as all the separate marketing material and activities. Austin just supplied Cambridges.
Additionally, we should also be aware of customer loyalty to a particular dealer. Many buyers in the 1960s were more loyal to a brand and a dealer than we are today and would continue to trade with a dealer and take the brand he offered. BMC did not attempt any meaningful dealer chain clean up until the late 1960s, when many of the smaller discarded dealers took on Datsun, Toyota and Mazda franchises instead.
This leads to the next point to consider – in 1968, the Austin Maxi replaced the Austin Cambridge in Austin showrooms only, and combined UK sales of Maxis and all Farinas rose from 30284 in 1967 to 30784 – or looked at another way, the Maxi sold 23294 and the Farina lost 22794. The Maxi was actually supposed to replace all Farinas, with a stillborn saloon version to replace the Morris Oxford.
There is another example from BMC to consider–in its first full year, 1965, BMC sold 22234 Morris 1800 Landcrabs in the UK. In 1966, with an Austin 1800 also available, they sold 27536 and a similar quantity in 1967. But in 1968 it was back to 23591. It doesn’t seem like a great gain, does it?
My personal conclusion? Badge engineering did not add sales volume for BMC but it did enable higher prices to be obtained for 15% of the cars sold. So, not all negative then? Well no, but there was another way that was cheaper for manufacturer, easier for the consumer and simpler for the dealers. A tiered structure of model trims – Deluxe, Super, GT and 1600E. It worked pretty well for the Ford Cortina.
There are other similar examples within the BMC history book of course – perhaps the best being the ADO16. Initially sold as a Morris only, Austin, MG, Wolseley, Riley and Vanden Plas versions were all added within a couple of years, and the Mini came in a similar number of versions. There’s also the example of the Austin Healey Sprite and MG Midget, created for no reason other than to give Nuffield dealers an equivalent car to sell. BMC, later British Leyland didn’t finally abandon badge engineering until 1975, when the Austin, Morris and Wolseley 1800 and 2200 range was relaunched, after only 6 months, as the Princess 1800 and 2200. It came back briefly in 2001, when BL’s successor MG-Rover group–divested from BMW–created the MG ZR, ZS and ZT from the Rover 25, 45 and 75 respectively, and marketed them until the end of MG-Rover in 2005.
Many of the production and sales figures quoted were sourced at http://www.aronline.co.uk, an excellent site for Austin-Rover, BMC and BL history.