Captive import is a marketing term and a strategy[1] for a vehicle that is foreign-built and sold under the name of an importer or by a domestic automaker through its own dealer distribution system.[2]
The foreign vehicle may be produced by a subsidiary of the same company, be a joint venture with another firm, or be acquired under license from a completely separate entity. The brand name used may be that of the domestic company, the foreign builder, or an unrelated marque entirely (this is one type of "badge engineering").
A Merkur Scorpio manufactured in West Germany by Ford of Europe and marketed in the United States, an example of a captive import
Background
Captive import arrangements are usually made to increase the competitiveness of the domestic brand by filling a perceived target market not currently served by its model lineup that is either not practical or not economically feasible to fill from domestic production or a mutually beneficial agreement that helps automakers without a strong distribution network or a presence in a specific country to benefit from the distribution network and stronger brand image of an established automobile manufacturer in that location. One example is the agreement between Chrysler and Mitsubishi Motors, which started in 1971. Chrysler imported Mitsubishi-manufactured vehicles into the United States to fill a void in their compact lineup with cars like the Dodge Colt. Mitsubishi began selling vehicles under their name in the United States in 1982.
In countries or regions where a foreign manufacturer might have a wholly owned subsidiary that develops and manufactures vehicles or a strong manufacturing presence, a captive import can be a vehicle from the manufacturers' indigenous country or an affiliated manufacturer worldwide. Holden was the Australian subsidiary of American General Motors and was considered to be a domestic manufacturer in Australia until Australian domestic production completely ended in 2017. In the past, Holden has also imported the Mexican-built Holden Suburban, a variant of the North American Chevrolet Suburban, along with the Holden Jackaroo built by General Motors' Japanese affiliate Isuzu in Japan. An example of an Australian captive import is the Holden Barina, which has since 1985 been the Suzuki Cultus, two generations of the European Opel Corsa, and is also the Korean Daewoo Kalos (marketed internationally as the Chevrolet Aveo).
For countries that do not have native manufacturers or a development/manufacturing presence, a captive import is a vehicle not manufactured by the specific company that imported the vehicle but sold under its brand. Usually, the vehicle manufacturer might be an affiliate of the importer. The Chevrolet Forester was sold in India by General Motors, where its manufacturer, Japan-based Subaru, does not have a sales presence, and the importation agreement started during the period when the manufacturer of Subaru, Fuji Heavy Industries, was affiliated with General Motors.
A vehicle manufactured in a country where the manufacturers' indigenous nation has a free-trade agreement with other countries in the same region, such as the European Union for Europe, NAFTA for North America, or ASEAN for Southeast Asia, and manufactured in a plant wholly or partially owned by that company should not be considered a captive import.
The integration of manufacturing operations between Canada, Mexico, and the United States has been due to the hospitable trade environment created by the North American Free Trade Agreement (and before NAFTA, the US-Canada Auto Pact), coupled with the proximity of these nations to the U.S. Vehicles made and marketed by European automakers that were eventually acquired by the Big Three automakers, such as Land Rover, Volvo, and Saab, are generally not considered to be captive imports.
Automobile companies have made efforts since the 1990s to streamline operations and become increasingly globalized, making it more challenging to determine the national origin of vehicles and even more complicated when considering outsourcing the worldwide sources of components and parts used to make them.[3][4]
American market
In the American market, captive imports "blurred national distinctions" because they were designed and built elsewhere, but have a domestic nameplate.[5] The chief reason domestic automakers market captive imports is because "it is cheaper to import those cars than to produce them" in the United States.[5]
The Nash Metropolitan, sold in the U.S. from 1954 until 1962, was a captive import for Nash Motors. It was designed by Nash, unlike most captive imports built by another company, and produced by Austin in the UK specifically for sale in the U.S. By entering into a manufacturing arrangement, Nash would avoid the expense associated with tooling, body panels, and components.[9] When Nash launched this two-seater sub-compact car, it was the first time an American-designed car had been only built in Europe and never assembled in the United States. Unlike typical European cars of the era, its look was "American", and it had a design resemblance to the large or "senior" U.S.-built Nashes. It became one of the few small cars to sell well during the most bulk-obsessed period of U.S. automotive history.[10]
When Mercedes-Benz was seeking entry into the American market in the 1950s, the company signed a marketing agreement with Studebaker–Packard and became a captive brand in their showrooms.[11] Around the same time, Pontiac dealers sold the GM's British-built Vauxhalls from 1958 until 1962.[12]
Ford, who had invented the modern captive-import system in 1948 with the British Anglia and Prefect, added its own European Ford Cortina to its North American dealer network until low demand led to its discontinuation in 1970 when the company introduced its domestic Pinto replacement, and its European market Ford Capri to its U.S. Mercury line in the 1970s. Although the car had features to make it great, the marketing was flawed with a mismatch to the models traditionally sold by Lincoln-Mercury dealers.[4] Ford returned to importing the Mk1 Fiesta in 1978 when the company developed the North American market Escort/Lynx twins until 2013 when the "One Ford" business strategy was in operation, and the European market Mondeo and Fiesta were manufactured in both North America and Europe.
During the same period, Dodge marketed several small Mitsubishi models, mostly sold as Dodge Colts (versions of which would later be marketed under the Plymouth and Eagle brands). Chrysler Corporation did not develop its in-house subcompacts during the late 1960s (which GM and Ford Motor Company had done with the Vega and Pinto), where they partnered with an overseas manufacturer with Mitsubishi and Hillman.
The "Plymouth Cricket" (a rebadged Hillman Avenger) was introduced to the U.S. market in the early 1970s to counter the growing demand for small cars, but not successful.[13]
General Motors marketed its German-built Opel models like the Kadett through Buick dealers in the late 1960s and early 1970s.[14] This venture yielded ambivalent results; the Opels were generally well-regarded, and sales were decent but never substantial. In the 1970s, when Buick decided to phase out its Opels and sell small Isuzus instead, the result was a handful of cars carrying a global brand, Buick Opel, by Isuzu. Buick was not the first to rebadge Isuzus — Chevrolet did the same with their LUV pickup truck in 1972.
The Daewoo-built line of LeMans-branded small cars were marketed by GM in several nations and through Pontiac dealers in the U.S. starting in 1988.[15] They shared nothing with the original 1960s LeMans models. In the late 1980s, GM consolidated most of its various captive imports of the time under the Geo brand, which was exclusively handled by Chevrolet dealers. The cars, built variously by Toyota (the Prizm), Isuzu (Spectrum, Storm) and Suzuki (Metro, Tracker).
In 2004, GM began marketing the Chevrolet Aveo subcompact, a rebadged Daewoo Kalos (now a rebadged Daewoo Gentra) assembled in South Korea. In 2008, GM started marketing the Saturn Astra, which is a rebadged Opel Astra, assembled in Belgium. Before the brand's phaseout, Pontiac also returned to the captive idea by selling Holden vehicles, first the Holden Monaro as the Pontiac GTO and then the Holden VE Commodore as the Pontiac G8. Pontiac dealers also briefly received a version of the Kalos/Gentra/Aveo, which was sold in Canada as the G3 Wave and in the U.S. as the G3.
In 2011, GM once again used a Holden model, the WM/WN Caprice, as a captive import for its Caprice PPV, but designed for law enforcement agencies in the United States and Canada.
In Brazil, the Australian-built Holden Commodore has been sold since 1998 as Chevrolet Omega, replacing the locally built car bearing the same name. Despite being well received by the press and public, sales are much worse than its locally built counterpart, simply because of its high price. However, it is used very often as official government cars. Chevrolet also rebranded the Argentine-built Suzuki Vitara as the Chevrolet Tracker after Suzuki stopped selling cars in Brazil, but it never achieved the same sales figures as the original car.
In Japan, where foreign car manufacturers have traditionally struggled to compete in the local market, even rebadging of U.S. models like the Chevrolet Cavalier as a Toyota has failed to improve sales.
In Australia, GM's Holden operation sold the 1975-84 Isuzu Bellett/Gemini, itself a license-built version of the then-current Opel Kadett, as the Holden Gemini. The name was originally Holden-Isuzu Gemini, but after the first TX series, the Isuzu cobranding was dropped. Perhaps the original idea was to foster the Japanese-ness of the model at a time when customers might have seen that as a positive, the Nissan's 610 Bluebird being marketed as the Datsun 180B being a big seller at the time. The Gemini was assembled in Australia at Acacia Ridge in Queensland and Holden was still the highest-selling brand. The Chevrolet LUV produced by Isuzu was also sold from 1973 for a couple of years, the only official Chevrolet branded model available in Australia at the time (and since). Ford sold the Taurus in Japan, Australia, New Zealand, and Hong Kong in 1996, but stopped in 1999. In 1998, the Chevrolet Suburban, was marketed in Australia and New Zealand as a rebadged Holden Suburban with intentions to launch the full-sized SUV in a region that was used to having small to mid-sized SUVs, and the model was discontinued in 2001.
Captive imports often fail, and a shift in exchange rates can raise prices to uncompetitive levels.
Some models have been criticized for marginal quality, such as the spate of Daewoo models marketed under domestic General Motors marques during the 2000s, or for being a bad match for the local driving environment.
The commitment of domestic sales and service staff to an unfamiliar vehicle has been questioned, particularly if the import is seen as reducing sales of other, more profitable vehicles in the lineup.
Others fail due to no fault of their own; the Sunbeam Tiger, for instance, an early 1960s example of the concept of an American Ford Windsor engine in a British (Sunbeam Alpine) body and chassis, enjoyed substantial success until Sunbeam became a captive import of Chrysler Corporation in North America. Chrysler could not be realistically expected to sell a car with a Ford engine, and Chrysler V8 engines all had the distributor positioned at the rear of the engine, unlike the front-mounted distributor of the Ford V8, making it impossible to fit the Chrysler engine into the Sunbeam engine bay without major and expensive revisions. Thus this niche of the automotive market was left to be filled with legendary success by the Ford engined Shelby Cobra.
There may be a deeper, structural issue at work, however. It could simply be that a domestic buyer is unlikely to want an import, and an import buyer is unlikely to enter a domestic showroom. Also, consumers of a specific domestic brand might feel that a captive import does not have the qualities that they want and expect from vehicles of domestic vehicles manufactured by that brand. A captive thus easily falls between two stools. This is probably why the practice of using a separate brand name, such as Merkur and General Motors' short-lived Geo, has ceased — the foreignness of the car is thus discreetly made less apparent. Another factor concerns servicing where captives often do not share components with their domestic counterparts - this often leads to parts incompatibility and/or backorders.
Another view is that the practice could be seen by the public as simply dishonest, causing complete rejection. Certainly in cases when identical models are available at the same time with only the badges differentiating them such as what happened under the failed Button car plan in Australia during the 1980s.
Exceptions
Not every vehicle that appears to be a captive import really is. A foreign-designed or badged vehicle assembled in the market where it is sold does not fall into this category. Such vehicles are frequently the result of joint venture or strategic alliance arrangements between automakers.
For example, the Renault Alliance was sold through American Motors (AMC) dealers starting in the fall of 1982 until production ended on 5 June 1987 Chrysler acquired AMC. The Alliance was assembled by AMC as part of a tie-up with the French company.[17][18] The 1985 through 1988 Chevrolet Nova and the later Geo Prizm were a Toyota design and shared the Chevrolet showroom with many captives, were built in the U.S. by the GM-Toyota NUMMI joint venture. The Eagle Talon and Plymouth Laser, both related to the Mitsubishi Eclipse, were manufactured in the U.S. by Diamond-Star Motors, a Chrysler-Mitsubishi Motors joint venture. Although Australia's Holden often shared planning and hardware with the rest of GM's global operations, which included Opel and Isuzu, it preferred assembling its versions of such vehicles locally. Rover and Honda have co-produced models for the European market, as have Alfa Romeo and Nissan. None of these would be considered imports. With the complete ceasing of automotive production in Australia by Holden and Ford Australia in 2016, who were both considered indigenous Australian automakers, both will be switching to a wholly imported lineup. No vehicle sold by Holden or Ford after the end of Australian production should be considered a captive import since neither maintains an Australian manufacturing presence.
Holden, formerly known as General Motors-Holden, was an Australian subsidiary company of General Motors. Founded in Adelaide, South Australia, it was an automobile manufacturer, importer, and exporter that sold cars under its own marque in Australia. In its last three years, it switched entirely to importing cars. It was headquartered in Port Melbourne, with major industrial operations in the states of South Australia and Victoria. The 164-year-old company ceased trading at the end of 2020.
Opel Automobile GmbH, usually shortened to Opel, is a German automobile manufacturer which has been a subsidiary of Stellantis since 16 January 2021. It was owned by the American automaker General Motors from 1929 until 2017 and the PSA Group prior to its merger with Fiat Chrysler Automobiles to form Stellantis in 2021. Most of the Opel lineup is marketed under the Vauxhall brand in the United Kingdom since the 1980s. Some Opel vehicles were badge-engineered in Australia under the Holden brand until 2020, in North America and China under the Buick, Saturn, and Cadillac brands, and in South America under the Chevrolet brand.
Chevrolet, colloquially referred to as Chevy, is an American automobile division of the manufacturer General Motors (GM).
Vauxhall Motors is a British car company headquartered in Chalton, Bedfordshire, England. Vauxhall became a subsidiary of Stellantis in January 2021, having previously been owned by General Motors since 1925.
GM Korea Company is the South Korean subsidiary of multinational corporation General Motors and the third largest automobile manufacturer in South Korea. GM Korea's roots go back to the former Daewoo Motors vehicle brand, which was split from its parent company, Daewoo, in 2002. In addition to importing vehicles for sale into South Korea, the company also operates three manufacturing facilities producing vehicles for the domestic market and for export. The company also operates GM Technical Center Korea, a design, engineering, research & development facility for various GM products, primarily small-size cars.
The Opel Omega is an executive car engineered and manufactured by German automaker Opel between 1986 and 2004. The first generation, the Omega A (1986–1994), superseded the Opel Rekord. It was voted European Car of the Year for 1987, and was available as a saloon or estate. The second generation, the Omega B, was manufactured from 1994 to 2004.
In the automotive industry, rebadging is a form of market segmentation used by automobile manufacturers around the world. To allow for product differentiation without designing or engineering a new model or brand, a manufacturer creates a distinct automobile by applying a new "badge" or trademark to an existing product line.
The Isuzu Gemini is a subcompact car produced by the Japanese automaker Isuzu from 1974 until 2000. The same basic product was built and/or sold under several other names, sometimes by other General Motors brands, in various markets around the world. While the first generation was of a rear-wheel drive design, later versions were all front-wheel-drive, and the last two generations were no more than badge-engineered Honda Domani until the name was retired in 2000.
Asüna was a captive import automobile marque created in 1992 for sale in Canada by General Motors as a counterpart to Geo. It was one of two successors to the Passport marque, which had a similar intent.
General Motors New Zealand Limited, formerly Holden New Zealand Limited, is a subsidiary of General Motors that distributes GM' motor vehicles, engines, components and parts in New Zealand.
The history of General Motors (GM), one of the world's largest car and truck manufacturers, dates back more than a century and involves a vast scope of industrial activity around the world, mostly focused on motorized transportation and the engineering and manufacturing that make it possible. Founded in 1908 as a holding company in Flint, Michigan, as of 2012 it employed approximately 209,000 people around the world. With global headquarters at the Renaissance Center in Detroit, Michigan, United States, General Motors manufactures cars and trucks in 35 countries. In 2008, 8.35 million GM cars and trucks were sold globally under various brands. Current auto brands are Buick, Cadillac, Chevrolet, GMC, Baojun, and Wuling. Former GM automotive brands include LaSalle, McLaughlin, Oakland, Oldsmobile, Opel, Pontiac, Hummer, Saab, Saturn, Vauxhall, Daewoo, and Holden.
In the United States, the automotive industry began in the 1890s and, as a result of the size of the domestic market and the use of mass production, rapidly evolved into the largest in the world. The United States was the first country in the world to have a mass market for vehicle production and sales and is a pioneer of the automotive industry and mass market production process. During the 20th century, global competitors emerged, especially in the second half of the century primarily across European and Asian markets, such as Germany, France, Italy, Japan and South Korea. The U.S. is currently second among the largest manufacturers in the world by volume.
A substantial car industry was created in Australia in the 20th century through the opening of Australian plants by international manufacturers. The first major carmaker was Ford Australia and the first Australian-designed mass production car was manufactured by Holden in 1948. Australian manufacture of cars rose to a maximum of almost half a million in the 1970s and still exceeded 400,000 in 2004. Australia was best known for the design and production of 'large' sized passenger vehicles. By 2009 total production had fallen to around 175,000 and the Australian market was dominated by cars imported from Asia and Europe.
The automotive industry in South Korea is the fifth-largest in the world as measured by automobile unit production and also the five-largest by automobile export volume.
The General Motors T-car was a platform designation for a worldwide series of rear-wheel drive, unibody subcompact cars. It was General Motors' first attempt to develop a small car to be sold internationally with engineering assistance from Isuzu of Japan and GM's Opel Division of Germany. GM's European divisions Vauxhall and Opel, and Australian division Holden were already producing small vehicles for their respective local markets, but subcompact car production wasn't being done by GM in North America until the introduction of the Vega earlier. Subcompacts from international divisions were being offered in North America as captive imports.
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