We have seen the Indian Automotive market growing rapidly with Indian brands like Mahindra and Tata Motors launching their new product range to cater to different types of customers.

But, with all this happening, there is also one more practice that is being done simultaneously by the already established Car Manufacturers. What is it, you wonder? Then basically, it is introducing a sub-brand, which will obviously work under their primary firm. 

And it is strange because, for example, brands like Mahindra, who already were & are still selling Electric vehicles under the name ‘Mahindra,’ but still have introduced their sub-brand, BE ( Born Electric ), which is meant to do the same thing - Selling EVs, just with one change, which is to sell them under the name ‘BE’.

Then why? I mean to think straightforwardly, it is stupidity. Imagine if you own a business in which you are supposed to do something that you are already good at, and you don’t really need one more person to do the same thing for you, but still, you have decided to hire one more person, who does the same thing, and the same way you were doing it. Well, this is what nowadays, brands like Mahindra, Tata, Hyundai, and even BMW are doing, just to sell their EVs. I mean, don’t you think this is a waste of Time and Money?

To answer this, NO! In this particular article, this is what we are going to understand - How brands introducing their sub-brands to do the same thing that they were doing is not a waste of Time or Money.

For starters, we will understand what actually sub-brands are about.

What are sub-brands?

At first, sub-brands are created by Brands. They act as a secondary business, which runs under the main brand. Sub-brands could focus on any preferred field of business the main brand chooses it to.

Why are Automotive Brands creating sub-brands just to sell their EVs?

An Automotive brand creating a sub-brand just to sell their EVs might contain various business-related reasons. And these 6 points will explain thoroughly why so.

Disclaimer: We would use the Mahindra & Mahindra Automotive brand as our example to understand this whole study in an easy way.

New Identity

When a sub-brand gets launched, it not only gives birth to another brand but also creates a new identity. As this ‘sub-brand’ was never heard of or known before, no one really knows about it. This overall helps the main brand to shape its sub-brand in a way they want, or the audience wants it to be.

Example: Mahindra launched its sub-brand - BE , last year. Now, it is obvious that we Indians to not know about this particular brand at all when we hear it for the first time. And that is what gives Mahindra a Loophole , which it could use to shape this brand as and however it wants to. Well, Mahindra did the same thing; they shaped the brand’s identity as an Entry-level Premium Electric Car Manufacturer , and they showcased three concepts of BE cars that gave this new identity even more boost.

Distinction & Leveraging Expertise

A distinction is created when such sub-brands take positions. The parent brand usually creates a sub-brand of itself to bring in a difference. If the parent brand holds some extra ideas, which are a completely new approach in terms of all the Processes and Patterns, the parent brand uses, and it believes that these new ideas could work in a particular market. Still, it also cannot launch them under its name, and right over there, then the parent brand finds a reason to build a new sub-brand, which could bring in the new ideas that the parent brand had for the same market but with a distinction in them.

And the aspect of leveraging expertise also works well in this, as the parent company has had enough experience to make a product that could directly strike the right niche with the right equipment to make it a quick success.

Example: Mahindra did the same thing with their EV sub-brand - BE. They had these incredible, futuristic ideas with them, so it doesn't matter if it is with the Design or the Technology. But, there was one problem, which was that these ideas sure had great potential in them, but still, they needed to be used or executed in an appropriate way. And launching these new EV concepts under the name Mahindra itself would have cost their success a bit, as the name ‘Mahindra’ holds a long history with Ups and Downs, and their reputation today is improving, but it is still not in a good spot.

Therefore, Mahindra decided to go with a completely new approach, which will give these EV concepts a new fresh start. A sub-brand that literally holds no history but a future that could be made bright.

New Opportunities

Brands can create new opportunities by introducing or launching a sub-brand. If the parent brand wants to cater to the particular market in a ‘way’, but it can’t, because the ‘way’ goes in the opposite direction of the main brand’s image or concentrated market, then that parent brand gives birth to a new sub-brand, which could help it enter new levels. These new sub-brands, with the help of their new identity, can bring in new customers and have a positive impression on them.

Example: There are plenty of reasons for why Mahindra launched this ‘BE’ sub-brand, and one of them is to put a step forward towards a niche market. This niche market is a kind which they want to have a hit on, and they have tried to do so too, but still, their history & their image create a perception in the buyer’s mind that Mahindra still needs to improve a lot to cater a product for us. And if you wonder, what type of Niche market is it? Then it is the Entry-level Premium Electric Car Manufacturer, as said earlier. 

Now, this market does leave out a place for each & every kind of Car brand, and even Mahindra, for that matter. But the thing is that before entering into this niche market, where the product range itself starts from a price tag of ₹25 lakhs, Mahindra would need to re-create an image. This image should be something that could give the buyer undoubted trust, that says - Yes, ₹40 lakh Mahindra products can be bought. And to do this, the brand now would need a series of years to re-create its already established image. 

So, why not find an easy way, and Wallah! A sub-brand is the answer. BE has been positioned in a way that looking at its products only would give you that undoubted trust for the brand. And that is why BE’s product range starts from ₹20 lakhs and goes up to ₹50 lakhs ( these are expected prices ). And people have already accepted them to be priced that much; they have accepted the belief that these products are worthy enough to cater to our Premium Electric Car needs.

Strategic Alliance

Well, a helping hand costs nothing, but it can make a priceless impact on the World. This famous quote is far away from being wrong. And sometimes, firms take it quite seriously as well. It is true that one cannot have the best of both worlds, but in the Business world, it is quite different. Well, if you cannot possess the best of both worlds, then simply combine both of the worlds, Easy! And as said, firms from the same market sectors or different market sectors do this to make things easier and cater to their audience with a much better product.

Example: The overall plan of Mahindra with BE is somewhat the same. As they have recently entered into the Electric market of India, they don’t have much experience. Yes, though they have had an Electric Sedan way back, but things were different a decade ago. Therefore, they sure need an alliance, a help which could get them to the top of the mountain. And with Mahindra EVs and BE EVs, the help is in the form of BYD Auto & Volkswagen. 

Let me explain, basically Mahindra and obviously BE, having no experience in the manufacturing of Electric vehicles, definitely bring many challenges. And one of them is Good Quality Batteries because, believe it or not, EVs are way more dangerous than ICE Vehicles, and Good quality batteries are a must. Therefore, to do that, Mahindra has signed in with BYD Auto and Volkswagen to manufacture batteries for the future EVs of BE & Mahindra.

And talking about these two brands - Volkswagen & BYD Auto -, well, they have a good amount of experience in this field, And specifically talking about Volkswagen, they have been making good quality EVs for a long time now, so their batteries would obviously be better for first. Secondly, BYD Auto is literally the World’s biggest EV manufacturer today, so do you need any more explanation for - If you cannot possess the best of both worlds, then simply combine both of worlds .

Reframing / Repositioning the main brand

Sometimes, the main brand ends up almost being despondent due to its failure, but as a few of its last breaths, the main brand tries a lot of chances, and one of them is launching a sub-brand. Well, whenever you see a new thing, the very first thought or the process your mind goes through is, What is it? And this is psychological. So, if these failed brands will launch a new sub-brand and do not repeat any of the mistakes they did the last time, the overall presence of that sub-brand becomes ‘nice’ for the people, and indirectly, due to this, the main brand also gets some aid, which helps it reposition itself in the market.

Example: When Mahindra was launching the BE brand, at that time, Mahindra was at a spot where it was recovering from the bad phase it went through before 2020. And BE brand positioning itself was so appropriately done and nice that it gave a huge amount of aid to Mahindra to recover faster.  

And talk about today, well, you are seeing Mahindra going Cats & Dogs with their business decisions, I meant in a good way. They have literally till today launched themselves in about 17 other countries, excluding India. Plus, the products Mahindra itself is launching, forget about BE, we know that it is already a great brand, but Mahindra has gone so high that it is today incomparable to the other Indian Giant, Tata Motors .

Competing with other brands

Now-a-days, the world is changing, and so are the Business firms, which ultimately states that the race to the top of various business markets is getting more buzz every single day. And all of this includes new Technologies, new Brand arrivals, Innovative products, etc. But, unfortunately, to those who earlier had decided that they would never leave the particular ‘Tech’ or the ‘Process,’ because that is what defines them, whatever! Basically, today, their ways have gotten old, and in the past, they framed their brand image in a way that people would not accept them with the required change. So, ultimately, they have lost to their rivals.

But, here comes the ray of hope, launching a new sub-brand, which has been carved, showcased, and framed in a way that shows that it is capable of having or providing that technology that would actually help them. And the other brands that rule this segment, this sub-brand might give them a tough one.

Example: Mahindra is an excellent example of this, you tell me, will you not think twice and accept a ₹50 lakh Mahindra EV? No, right? Exactly, because even though products like XUV 700 from Mahindra are way better than their competition, but, unfortunately, there is a huge crowd out there, who still think Mahindra is nothing, but Carp! And to revert their thinking towards Mahindra is a waste of time and money. Therefore, again, here you go, simply launch a sub-brand.

BE is crafted and designed to cater to the particular audience we talked about, and by doing this, it results in one simple aspect - TOUGH FIGHT! Yes, tough competition is always welcomed by the customers because that is when we understand which actually is a good product for us. And Tata Motors today ruling the EV sector of India, we believe that BE could give them a nice one.

Conclusion

Well, I hope these six points have made you learn why sub-brands are being created by Automotive brands like Tata, Mahindra, BMW, Hyundai, etc. today.