The (Thankfully) Forgotten Art of Captive Import
Globalization took its first steps in the automotive industry by doing pretty much the opposite of what we see in nowadays
Automobiles used to be a very patriotic business. Each country was proud of having automakers of its own and some, throughout the decades, have gone as far as to fiddle with legislation so as to protect and boost their market share. Many of the companies we know today spent their first years restricted to their home country and few neighbors regarding staff, factory location and, whenever possible, model and part design. That scenario has changed almost entirely, but not at all in an easy way.
Despite the fact that globalization is capable of elevating the quality standards of any product and/or reducing its production cost, most car enthusiasts have never accepted the potential loss of cultural heritage it also causes — to keep it in a few words, cars no longer feature their national identities as much as they used to. One of the automotive industry’s first attempts to deal with that issue is what is named captive import. Many of its results are more fun to read about in nowadays than actually successful.
What is that, first of all?
Based on Jalopnik’s story, captive import was initially defined as bringing cars produced and sold in foreign countries using local dealer chains — that can be refined into some categories, but we’ll get there. This strategy’s would extend local brands to the imported cars so as to lend them a sense of familiarity and, hopefully, reduce resistance from buyers. North-Americans’ historic resistance to foreign products made their country the most prominent in this topic, with examples of many scopes and outcomes.
Captive import is usually executed when the maker’s local lineup is struggling to meet the demand. By the time it peaked, around the late 1980s, there were companies of many origins executing it with many car models of many brands and in many degrees of complexity. The fact that we don’t even see that name on the news anymore illustrates how successful it was but, before going there, this story presents the multiple variations it had back in the day along with a few examples from around the world.
Captive import 101
The most common captive import plays by the rules: foreign cars come to the country rebadged to match one of the local brands. The original manufacturer benefits from the additional demand for production while the importer is able to fill gaps in the lineup in a much cheaper and quicker way than to develop a model of its own — the foreigner is usually released within the year once the decision is made. The challenge comes from the fact that it must blend in with the local lineup as much as possible.
We’re talking about one company selling products from another, so the image work is never good enough. In general, the importer must tweak the external design, advertise it in such a way as to disguise the model’s origins and give a special sales training to its dealer network. It all becomes particularly difficult when we remember that costs should kept to a minimum; after all, one of the intentions behind this whole venture is to offer a new car model investing less. Unfortunately, many have failed at that.
In 1970, Chrysler took a stake in Mitsubishi and started to import several models as Chrysler, Dodge and Plymouth. The quick success, especially with small cars, made the Japanese want to sell in North America with its own name. That conflict of interest was solved with Diamond-Star, a new factory that developed and produced exclusive cars for both until the late 1990s.
Different sides of the pond
Remember how companies used to be very attached to their national identity? Over time, some of them grew enough to take over the others, but they had so many differences that it was worth keeping all of them alive, sharing as much as possible without compromising each one’s image. As a result, one company could have such different models around the world that it could be interesting to make them travel. That brings us to another type of captive import, applied to branches of the same automaker.
Image is not a problem here because all models share the origin. However, the fact that each one was tailored to different buyers implies a variation on style, size and powertrain. The importer’s most effective resort to deal with that is a smart marketing plan, which carefully chooses the model’s variables in a way that makes it interesting to its new audience but competing as little as possible with the local lineup. Companies often prefer to replace an existing car with a foreigner instead of simply adding it.
Up to the 1990s, Opel was GM’s powerhouse at small and midsize cars. The rear-wheel-drive Omega was exported to the US as Cadillac Catera to fight A4, 3-Series and C-Class, but didn’t impress at style, performance or reliability. Sadly, the biggest reason why people still remember it is a TV ad featuring Cindy Crawford and the yet-to-be comprehended “Caddy that zigs”.
The opposite approach
By the 1990s, big automakers wanted to make the most of using the same cars in multiple regions. The thing is, customizing all of them was getting a tad too expensive than originally intended. They ended figuring that creating a whole separate brand would be a one-time investment to develop a separate identity, thus enabling foreign models to come as they were. If it did well, it would only grow more and more in the country, and if it didn’t, it could be simply phased out leaving the main lineup unharmed.
North-Americans became particularly obsessed with that, since each of its Big Three founded at least one of those brands. While they had a lot of hype in the beginning, it quickly faded as people faced problems with reduced network of dealers and official repair shops. Besides, the multiple origins made those cars offer multiple characteristics including multiple levels of reliability, which was a huge problem for a country that was still opening itself to foreign car models as a whole. None of them survived.
In the 1980s, Ford rejuvenated its lineup with smaller, fuel-efficient cars. Buyers in the luxury market were shifting to European models, so Merkur arrived to slot between Mercury and Lincoln while using German models XR4Ti (originally Sierra) and Scorpio. Among the reasons for the poor sales was the exchange rate, which made prices unstable. It was ended in 1989.
How do automakers work today?
In short, this is just another line that globalization has blurred as it took over the world: today, all cars are produced for many countries and use parts from multiple ones. While that actually goes against national identity, as customers once feared, companies have found ways to keep that strong through the car’s image. Considering that a basic rule of good image work is to keep it simple, we’ve come to a scenario where the intention behind captive import is now fulfilled by literally abandoning it.
In other words, companies no longer need to help foreign cars thrive because that distinction no longer exists; the problem of national identity is now taken care of in other ways. We can say this paradigm shift was concluded with the 2008 financial crisis, since automakers of different origins merged and some markets had drastic changes on which makes and models performed the best. Today, there are only a handful of old-school captive imports in very restricted cases, like commercial segments.
Fiat bought the Chrysler group as a change to enter North America. Right after making it official, the new company quickly boosted its European lineup with rebranded cars from the new associate, such as the Lancia Flavia. It never put much effort into it, so the models were considered aliens for Italian standards and were discontinued in a few years without successors.
What can we learn from all that?
Although the automotive industry works with countless variables, one of the few rules we can pinpoint is that extreme solutions never work. The global car of the 1980s failed for ignoring regional preferences, but going the other way wasn’t good either: captive import forced unknown cars into proven brands or created all-new ones with too high expectations for what their structure could handle. While people love the thrill of novelty, what makes them actually buy is the reassuring feeling of trust.
In this industry, any car can be a hit or a failure in any country within reason; it’s up to the automaker to figure out how to properly work with its image and actually invest the necessary amount to make it happen. While captive import only worked for a short period and became a joke ever since, it also paved the way to plan how automobiles should be designed, produced and marketed to be successful in nowadays. If you know other interesting examples of captive import, please leave a comment below!