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There are many legendary namesakes in the auto industry today, and many of them are becoming too big to fit into the lineups of the companies that first conceived them. The solution? According to automakers, it's the sub-brand, a small lineup of vehicles that wears a successful badge while remaining under the control of the original manufacturer. And with the rise of EVs, even more popular names are taking the industry revolution as an opportunity to expand rapidly.
Take Ford's Mustang for instance. For the 2021 model year, the American muscle car spawned the Mustang Mach-E, an electric crossover hardly related to the original model, except by name. Many diehard Mustang fans have considered the Mach-E sacrilege, but the disrespect to the Mustang badge was done all in the name of sales. The Mustang is a well-known, popular name, just like the term SUV. So clearly, the only way to expand on the success of the Mustang name is to slap its badge on the most popular body style. Take all of the real Mustang variants into consideration, and that adds up to a decent amount of cars––enough to create a brand within itself.
While it might make sense in a vacuum to take a reputable name and separate it from its maker, adding more models and developing nearly a whole new brand costs money. A lot of money. And it's hard to say whether these sub-brands will prove as successful as the cars they stem from, which means there's no guarantee that the money will be coming back.
Yet automakers from all corners of the industry are seeing it fit to take that risk. GM is a prime example of that. The American auto giant already manages four different brands, and most of those four brands sell at least one highly successful vehicle. The best example is Chevrolet with its Corvette. The name has been around since 1958, and the latest iteration, the C8, has been promoted to Porsche rival status with its completely new mid-engined layout. The promotion has non-car-people mistaking it for a Ferrari, and has triggered outrageous dealer markups that bring the prices beyond what you should ever find in a Chevy dealer, the same place that sells the $20,400 Trax crossover. And there's more to come, including a range-topping, 1,000-hp Zora expected to land in 2025 with a starting price of around $200,000.
Case in point, rumor has it that GM wants to elevate the Corvette name into its own sub-brand to truly rival the likes of Porsche and Ferrari, without a name like Chevy to hold it down. We've already got the base Stingray, track-focused Z06, and hybrid E-Ray. Add in the Zora and another upcoming performance variant, the ZR-1, and you have a lineup of five sports cars wearing the Corvette badge. Oh, we forgot to add that there's a Corvette SUV on the way. Meant to compete with the Porsche Cayenne and other luxury crossovers, it will rake in significantly more profit to hold the sub-brand together. Don't agree? Ferrari and Aston Martin have proof.
Spinning off the Corvette name sounds like a great idea to us, but is it worth the effort it would take to create an entire sub-brand? What if creating a separate dealer network and adding an SUV to the lineup don't change profits enough to make such a move worthwhile? And without the popular Corvette in its stable, will Chevrolet take a hit? These are all potential problems that all automakers face when pondering the idea of a sub-brand. It could either yield great benefits and boost sales, or it could translate to throwing dollar bills into the trash can.
Whether or not the rise of automotive sub-brands will prove successful remains a great unknown, even to the automakers who make these decisions. But in the end, it's up to what buyers think and how they'll respond. For now, names like Corvette and Mustang are the guinea pigs.
Do you think spinning off popular nameplates is a good idea?
Feature
Apr 22, 2023
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Sub-Brands Are Becoming An Industry Trend That Could Make Or Break Automakers
Many successful names are matching the status of the automakers that first conceived them.
There are many legendary namesakes in the auto industry today, and many of them are becoming too big to fit into the lineups of the companies that first conceived them. The solution? According to automakers, it's the sub-brand, a small lineup of vehicles that wears a successful badge while remaining under the control of the original manufacturer. And with the rise of EVs, even more popular names are taking the industry revolution as an opportunity to expand rapidly.
Take Ford's Mustang for instance. For the 2021 model year, the American muscle car spawned the Mustang Mach-E, an electric crossover hardly related to the original model, except by name. Many diehard Mustang fans have considered the Mach-E sacrilege, but the disrespect to the Mustang badge was done all in the name of sales. The Mustang is a well-known, popular name, just like the term SUV. So clearly, the only way to expand on the success of the Mustang name is to slap its badge on the most popular body style. Take all of the real Mustang variants into consideration, and that adds up to a decent amount of cars––enough to create a brand within itself.
While it might make sense in a vacuum to take a reputable name and separate it from its maker, adding more models and developing nearly a whole new brand costs money. A lot of money. And it's hard to say whether these sub-brands will prove as successful as the cars they stem from, which means there's no guarantee that the money will be coming back.
Yet automakers from all corners of the industry are seeing it fit to take that risk. GM is a prime example of that. The American auto giant already manages four different brands, and most of those four brands sell at least one highly successful vehicle. The best example is Chevrolet with its Corvette. The name has been around since 1958, and the latest iteration, the C8, has been promoted to Porsche rival status with its completely new mid-engined layout. The promotion has non-car-people mistaking it for a Ferrari, and has triggered outrageous dealer markups that bring the prices beyond what you should ever find in a Chevy dealer, the same place that sells the $20,400 Trax crossover. And there's more to come, including a range-topping, 1,000-hp Zora expected to land in 2025 with a starting price of around $200,000.
Case in point, rumor has it that GM wants to elevate the Corvette name into its own sub-brand to truly rival the likes of Porsche and Ferrari, without a name like Chevy to hold it down. We've already got the base Stingray, track-focused Z06, and hybrid E-Ray. Add in the Zora and another upcoming performance variant, the ZR-1, and you have a lineup of five sports cars wearing the Corvette badge. Oh, we forgot to add that there's a Corvette SUV on the way. Meant to compete with the Porsche Cayenne and other luxury crossovers, it will rake in significantly more profit to hold the sub-brand together. Don't agree? Ferrari and Aston Martin have proof.
Spinning off the Corvette name sounds like a great idea to us, but is it worth the effort it would take to create an entire sub-brand? What if creating a separate dealer network and adding an SUV to the lineup don't change profits enough to make such a move worthwhile? And without the popular Corvette in its stable, will Chevrolet take a hit? These are all potential problems that all automakers face when pondering the idea of a sub-brand. It could either yield great benefits and boost sales, or it could translate to throwing dollar bills into the trash can.
Whether or not the rise of automotive sub-brands will prove successful remains a great unknown, even to the automakers who make these decisions. But in the end, it's up to what buyers think and how they'll respond. For now, names like Corvette and Mustang are the guinea pigs.
Do you think spinning off popular nameplates is a good idea?
