HomeAutomotiveWhat Can Auto Manufacturers Gain and Lose from Car Rebadging?

What Can Auto Manufacturers Gain and Lose from Car Rebadging?

Imagine copying someone’s homework and sending it for submission. You get the approval from the author under the terms the original author gets a cut of the marks gained in your homework goes into their overall grade. While we urge people not to try this in schools, this is a simple anecdote about how auto manufacturers like Proton and Perodua pulled off car rebadging. Take the all-new Toyota Veloz/Perodua Alza review from Carlist for example, which are both produced and sold locally based on the Daihatsu Xenia.


Officially known as badge engineering or in layman’s terms, car rebadging is when an auto manufacturer resells a car built by another company with a new badge under the promise of a cut of the sale. Often, these cars are not 100% badge and paste. They usually differ from a slight alteration in design or vary in specs. The closest examples we have in Malaysia are our local Proton and Perodua cars which were birthed from a joint development with Mitsubishi and Toyota/Daihatsu. Why do these companies simply rebadge someone else’s car instead of building one from the ground up?

Read More: A Brief History of Malaysia’s Largest Automaker

Car Rebadging Saves Cost on Development 

Making char kuey tiow at home for a party is a tough and messy job. But if you order it from a hawker’s catering services and take the credit, it makes all the difference. Researching and Developing (R&D) a brand-new engine and platform takes up a lot of effort, even more so for an aspiring car brand. Rebadging someone else’s car while offering a cut of sales or via licensing, however, minimizes the risk of failure and loss of profits. In recent years some manufacturers have even joined hands in R&D-ing a new car from the ground up together as a shared platform like the Toyota GT86/Subaru BRZ twins. 


Before we’re quick to cast our judgment saying manufacturers are getting lazier these days, we need to understand that researching and building a car from the ground up is no easy feat for any auto manufacturer. It is also the fastest way for a young player in the auto industry to get a jumpstart to gain experience. Even if it’s possible, the end product would be expensive for the average consumer these days like Mazda which now positions its cars as a luxury brand. Mercedes Benz spends 7.7 billion Euros on their R&D department in 2021, and that’s just one of the many departments the German marque runs. What about manufacturing, labor, and other overhead costs? Rebadging saves costs for brands and the hassle of developing a car from the ground up. 

Read More: The History of Proton

Market Localisation/Regional Brands

Another reason why auto manufacturers do car rebadging is due to market localization or selling under regional brands. Certain car brands are not widely available in other countries for a myriad of reasons like how most Mitsubishi cars were sold under Proton as a joint venture back in 1985. Daihatsu formed another joint venture with Perodua which gave them the sole rights to manufacture their cars on Malaysian soil with a new badge as Myvi, Axia, etc. Only Daihatsu’s trucks and vans are sold here. 

Everyone knew the Proton Saga was just a car rebadged Mitsubishi underneath

The Iconic Proton Saga as we know it.

4th gen Mitsubishi Lancer Fiore

The 4th generation Mitsubishi Mirage/Lancer Fiore which the Saga was based on

To avoid confusion and product differentiation, car brands will usually have a slight alteration to the design and specifications of the car depending on market localization. A quick instance is the Toyota GT86/Subaru BRZ twins. Both cars are identically similar in terms of chassis, engine, and specification. But the key difference aside from the badges is the front grille design. The Toyota sibling has an upwards-facing trapezoid design while the Subaru has it rotated 180 degrees. 

The Toyobaru twins are a unique case of joint development between two car brands

Toyota GT86. Note the trapezoid design on the front grille.

Subaru BRZ.

Subaru BRZ. The front grille is rotated by 180 degrees on the other Toyobaru twin. 

Closer to home, we have the Toyota Veloz/Perodua Alza, both models produced locally here. Both can be easily identified via the front trapezoid grille design and other devils in the details.

The Toyota Veloz is a car rebadge from the DNGA platform

Toyota Veloz

The 2nd generation Perodua Alza is a car rebadge of the Veloz?

2nd Generation Perodua Alza

But…If Everyone Rebadges Their Cars, There Will Be No More Unique Cars Out There

If you are familiar with the fifth generation A90 Toyota Supra, it was met with mixed reactions, notably being a rebadged BMW Z4 from chassis to engine. Critics were met with a conflict of interest either praising it or dismissing it due to the fact it was a lazy move by Toyota’s attempt to resurrect the iconic Supra lineup.


Closer to home, Proton’s new lineup of X50, X70, and recently, the X90 are just rebadged Geely cars. If more manufacturers just keep rebadging their cars, will there be anything unique anymore? Innovation would be dead by then. 

The Proton X50 is known to be a Geely car rebadge

Proton X50 in Malaysia

Geely Binyue, which the Proton X50 is based on.

Geely Binyue in China, which our Proton X50 is based on.

Read More: Don’t Know What Car to Choose? Here Are All the Brands We Have In Carsome’s Inventory!

Tarnished Brand Image

Once upon a time in Italy, there was this little Italian auto manufacturer that made sports cars specifically for off-road rallying in the 1980s. This little brand is what rally enthusiasts know as Lancia. The Italian auto company had an incredible streak of line-ups designed to conquer the dirt roads during the golden era of rallying with the Lancia Stratos, Delta Integrale, and the 037. Bear in mind, these cars are not mass-produced vehicles available to the masses modified for rallying unlike a majority of their competitors; they were all designed from scratch. 10 victories and 45 seasons later, the Italian car manufacturer has decided the best course of action for the modern day is to just…rebadge Chrysler cars and sell them for their entire lineup?

Lancia at their peak.

Lancia at its peak. Top left to right clockwise: Lancia Stratos, Delta HF Integrale, 037, and S4.

Lancia Grand Voyager. How the mighty have fallen.

Lancia Grand Voyager today, which is a rebadge of the Chrysler Grand Voyager. 

Whatever Lancia’s corporate strategy was to adapt to the modern era is flopping hard like fish out of the water. What was once a motorsport powerhouse has been reduced to a former shell of itself living in the shadow of Chrysler/Stellantis cars. Lancia’s poor fate serves as a dreadful lesson to all auto manufacturers about what happens when you don’t innovate, it tarnishes your entire company’s image. Today, Lancia cars are just barely getting by, with all their lineups immediately forgotten after an announcement of a new car. You won’t be surprised to hear people ask – Lancia is still around? 

Everything, Everywhere, All Recalled At Once

Although rare, another downside of rebadging is if there is one fault caused by the original manufacturer, any models from the original manufacturer will be equally recalled back together. One notable incident happened in Malaysia with the Proton Inspira, which is based on the 9th-generation Mitsubishi Lancer. The Lancer had to be recalled by the Japanese conglomerate due to a defect in the right-turn indicator switches with 20,300 affected units on Malaysian shores. Or another case in the United States where the 5th generation Toyota Supra was recalled by BMW due to a failure in the brake assistance software. Poetic right?

Read More: Buying a New Car? Here Are Some Mistakes You Should Avoid!

There is no perfect vehicle in this world. Even some of the most reliable or cost-efficient vehicles out there will eventually have an error or a lingering problem from the manufacturer. For potential car buyers, it’s important to do your due diligence by researching the make and model you have your eye on. Conversely, you can also dabble in used cars as most of these running models would be problem-free. CARSOME Certified cars are your safest choice as all of our cars are professionally refurbished and in running condition. All of our cars have to go through a stringent 175-point inspection to ensure they are flood-, accident-, and recall-free before we put them up for sale.

Until then, as long as it maximizes profit with minimal risk, we will continue to see car rebadging pushed by auto manufacturers for the foreseeable future. 

This article was adapted from a video by Carlist.my: Review: Is the Toyota Veloz the real top-spec Alza?

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