Last week it was revealed that Fiat will roll out a budget brand including three new models in Western Europe in 2010. This follows reports a few months ago that Peugeot was looking to resurrect its Talbot marque as a means of selling cheaper cars without compromising its overall brand image.
The strategy of moving to an upmarket brand positioning, adopted by value brands such as Skoda and Kia over the past few years, has left a gap at the bottom of the market, according to marketing consultancy Interbrand's branding director, Graham Hales.
'Automotive brands have got to the point where prestige has been maximised, but consumers are less concerned with brand prestige and view cars as a function purchase based on how much money they have in their pocket,' he said.
Simon Moriarty, studio design director at branding agency Fitch, agreed that the current decline in sales of new cars is forcing manufacturers to re-appraise the value of a strong brand. 'Car brands will have to be more flexible, and have to be seen to be doing the right thing. But to leave an existing set of brand values would be inadvisable, so it is better to introduce a new brand supported by the parent brand,' he added.
The Society of Motor Manufacturers and Traders expects sales to have suffered a year-on-year fall of 9% so far in 2008.
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