Automotive brand hierachies

February 19th, 2013

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The concept of ‘brand hierarchies’ is nothing new in the automobile manufacturing world. Take a corporate giant and its want to expand into different market categories- or indeed different markets- without diluting its parent brand’s strength or market position.

The example of General Motors and its Holden brand is probably the most well-known to Aussies. A man by the name of Willam Durant had risen to fame in the 1900s as a key driver in the success of the Buick Company. Durant acquired several other manufacturers and named the conglomerate ‘General Motors’. His vision was simple: that each GM sub-brand would stand-alone in its own class, so they wouldn’t be in competition with each other.

As a result, Cadillac became the high-end luxury brand, Buick for the upper-middle class, with Oldsmobile seen as the entry level to the corporation. Later, Chevrolet was added as the ‘everyman’ brand, and so it continued.

Though the ‘one brand per class’ philosophy has faded and several sub-brands have come and gone since, today GM’s presence is still felt world-wide. As well as the home-market Chevrolet, GMC (a commercial vehicle producer) Buick and Cadillac, they have a presence in mainland Europe through their Opel brand (now in Australia), in the United Kingdom with Vauxhall and in Australia with Holden.

Given their heavy global presence and continued success, the Volkswagen Group (VAG) is the most influential of the multi-brand car corporations today.

Currently in Australia the VAG hierarchy commences with the Czech Republic’s Skoda as the entry-point. From there, it moves through the German Volkswagen brand to a premium German marque, Audi. The aristocratic English Bentley is on the next rung before the red-blooded Italian peak of Lamborghini. Other countries receive bookends to these, the budget Spanish SEAT (which failed locally) and the artisan Bugatti, originally of France.

Although there are distinct steps in prestige with each of the brands sold here, sub-brand pricing strategies often collide, particularly when the marques in question share a model platform. For example, a Skoda Fabia RS in three-door hatch form has a list price only $1000 less than the better-specified (though similar underneath) Volkswagen Polo GTI. The Audi equivalent A1 Sport is better specified again, but costs over $10,000 more than the Polo. Of course, if you are looking into any of the cars mentioned, Private Fleet can help save you thousands off these prices!

The Fiat Group has also established a hierarchy, though their reasoning is perhaps more patriotic- if they hadn’t acquired other Italian manufacturers, the entire Italian car-building industry may well have died. The Fiat brand itself sits below Alfa Romeo, Lancia (unavailable in Australia), Maserati and Ferrari and technologies are shared across brands to ensure economies of scale. The re-emerging strength of the Fiat Group has been highlighted with the acquisition of a majority stake in Chrysler to increase its distribution capability in the United States.

So, next time you see a car with a familiar shape but a badge you weren’t expecting, you know why!