Add new comment | SPJIMR

Add new comment

Cross badging in India is not a new concept. In late 60’s Hindustan Motor launched Ambassador which was cross badged Morris Oxford and popular Premier Padmini was actually cross badged Fiat 1100. But the main difference was that the cross badged products were not put into the same market at the same time, unlike the current cross badging concept. The current concept of cross badging was introduced in 2011 when Skoda and VW simultaneously launched Rapid and Vento in the Indian market. Now, with not so successful stories of cross badging in the Indian market, it will be interesting to see Toyota and Maruti gearing up for cross badging. This time the products put on the stake are Brezza, Baleno, and Corolla. Learning from Skoda-VW cross badging, it worked fine in the short run but when Skoda launched updated Rapid, it completely cannibalized VW Vento. Now let’s look at the numbers. In the month of April 2018, Maruti sold 20,000 Baleno and 10,000 Brezza whereas Toyota managed to sell only 263 units of Corolla. It is understood that Corolla is positioned as the high-end product and one cannot expect Corolla being sold in bulk but the numbers are still discouraging. Now, drawing the parallels from past cross badging examples and current numbers, I believe that there is little gain for Maruti when it is offering its top performing models for cross badging and in return, it is getting Corolla which is in itself struggling to allure high-end customers. In fact, if cross badged Baleno and Brezza are launched at a lesser price by Toyota then it definitely will eat up the share of Maruti Suzuki in the market as cross badged products offer more or less same features. As product differentiation is low with no additional functional benefit for the consumer, other than brand appeal, pricing will play a crucial role in Toyota and Maruti cross badging. But there are challenges in front of Toyota and Maruti for their synergies to converge. It will be a big challenge for Maruti to sell sedan like Corolla through its existing sales channel NEXA and if at all Toyota manages to sell cross badged products in huge numbers then it will have to work on its reach and presence to provide robust service as more numbers will bring in more issues at the service end. But the underlying question is- Will the two behemoths benefit from this strategic move? Only time can answer this question when products will compete head to head in the real market because many times customer surveys are in perfect juxtaposition with reality.

Bhavan's Campus
Munshi Nagar | Dadabhai Road,
Andheri West | Mumbai - 400 058, India
Tel:+91-22-2623-0396/ 2401

Delhi Centre
Bharatiya Vidya Bhavan Campus, 3rd Floor
Gate No. 4, Copernicus Lane
Kasturba Gandhi Marg, New Delhi-110001
Tel: 8130545577, 011-23006871, ext-871