Badge engineering is the practice of selling the same car with different badges (Chevy or Saturn or Pontiac or ...) under different names. For instance GM is about to launch the Chevy Traverse, a badge engineered Saturn Outlook. GM has four midsized sedans, Chevy Malibu, Buick Lacrosse, Pontiac G6 and Saturn Aura which compete with each other. Only Malibu is selling, the others are losing money. Toyota competes with a single model, Camry. Right now GM's problem is it has more good car names than it has good cars to give the names too.
Rather than selling four slight different cars, running four different ad campaigns, stocking four different sets of repair parts, and operating four different production lines, it is MUCH cheaper to build just one good car, build up it's reputation, get the price down thru economies of scale.
Car buyers aren't fooled. They know that look alike cars from the same company are actually the same car with a few trim changes.
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