MUNICH: Dacia, Infiniti and Lexus: All three marques are sub-brands owned by hard-charging carmakers eager to open up new markets among either value-conscious or well-heeled customers.
Time was when sub-brands were associated with a value message, but virtue is now entering the mix too.
BMW uses its "i" badge as a tag of environmental responsibility.
The Bavarian manufacturer established the "i" subbrand in 2010 to herald a new driving philosophy. It stands in contrast to the firm's time-honoured motto of "Sheer Driving Pleasure."
The green sub-brand i signifies "urbanization, environmental protection, along with a change in values and consumer behaviour", says BMW. That is a lot of weight for one letter to carry. "This shift calls for a revolution in urban mobility," said Alexander Kotouc, who is in charge of product management at the BMW spin-off marque.
The thinking behind "i" has spawned BMW subsidiary companies like ChargeNow, ParkNow and the car-sharing enterprise DriveNow.
"We founded our new in-house brand in order to document the move away from traditional business models," says the executive. Products so far include the all-electric BMW i3 runabout and the exclusive i8 sports-car. Both remain niche products.
Mercedes-Benz's new sub-brand EQ (electric intelligence) denotes much more than just cars, according to the German maker.
The initials symbolise a vision of electromobility products, services, technology and general innovation. Mercedes-Benz's car marketing chief Jens Thiemer said the company aimed to supply electric infrastructure ranging from wall-mounted charger boxes through to home energy storage devices.
Lined up for the future is an EQ-branded off-roader, although the Stuttgart maker says it will not break cover until the end of the decade. By then Mercedes-Benz may well find itself overtaken by the competition.
Nissan launched its luxury Infiniti spin-off in 1989 and it was initially limited to the US market. William Bruce, one of the execs behind the idea, said back then prophetically: "Infiniti's pledge is to establish a new relationship between the car and its owner." The person was to be the focus and not the car.
The Japanese firm was able to gain new customers and get a firmer foothold at the top end of the market. The brand expanded to Germany and other European markets from 2008.
Toyota did much the same with Lexus.
Renault entered the marketplace with its bargain brand Dacia - the name comes from the cheap and cheerful Dacia models once popular in communist Romania. They were knock-offs of Renault cars, so the French bought the factories and the brand.
German car giant Volkswagen, which owns 10 full marques from Bugatti to Seat, has so far shied away from sub-brands. Its divisions are all run as separate companies using shared components, but working with completely different images and marketing.
One tentative step for VW is its new car-sharing subsidiary Moia, which is an attempt to cash in on the trend towards urban mobility using on-demand taxis and robot shuttle fleets.
In marketing terms sub-brands are ofen used in a psychological way, says Stefan Bratzel, professor at the Center of Automotive Management at Bergisch Gladbach University. "Customers often identify with such messages," he says.
There is no need for the manufacturer to invent a whole new range.
"The sub-brand of a well-known badge can actually enhance the higher-profile brand and still open up a new market," said Bratzel.
For carmakers, establishing a sub-brand is a lot cheaper than creating a completely new marque. There is no need for new marketing channels and the main brand gives the fledgling outfit more credibility.
When it comes to new technology, existing car brands may need to find a new way of reaching tech-savvy, eco-conscious and younger buyers in general. "People interested in buying an electric car will probably need to be addressed in a different way," said Bratzel.
A rub-off effect is that "the values such as ecology and sustainability which apply to electric vehicles can be used to boost the image of the main marque."
