Why are car models different in each market?

There are many questions about why manufacturers change the name, engine, or amenities of the same car model in each country. There are even models that are sold in Europe but cannot be purchased in the US.

For decades, the European auto market has been a fiercely competitive place for automakers, big and small. Many European automakers began to think about exporting their cars to foreign markets, aiming for higher revenue. Later, exporting became an important strategy for the big players to eliminate dependence on the narrow domestic market.

Swedish carmakers are a prime example, now generating 90% of their revenue from markets outside their country's borders.

To boost exports, car companies choose business strategies that are suitable for each market. And the plans vary depending on the economy and culture of that market.

The most basic reasons include the location of manufacturing plants, distribution networks and laws of each market. Local language, culture, religion, habits and lifestyle also play a very important role.

For the US market, the biggest barrier is government regulations. The US has a different view on safety and emissions standards than Europe.

European safety standards apply in many countries, but not in the United States and Canada. The United States has its own safety standards, called the Federal Automobile Safety Standards. Likewise, Canada has its own safety standards, called the Canadian Motor Vehicle Safety Standards.

When a part of a European car does not meet US standards, manufacturers are forced to redesign it, which increases costs and results in imported cars being sold at higher prices than domestic cars.

Manufacturers must carefully consider the future of that model before deciding whether to distribute it or not. Because the US government always wants people to buy domestically produced cars to develop the US economy.

Another difference is that Americans prefer to drive large cars, while Europeans prefer to drive small cars. The answer to this difference is infrastructure. In Europe, the roads are narrower than in the US. Cities are densely packed with cars, making it difficult to get around and find parking. Smaller cars are easier to drive in Europe.

Not so in America. Americans travel more. The average American spends 290 hours a year in their cars. In Europe, people tend to use public transportation. So they park their cars about 95% of the time.

The more important reason is fuel prices. Gasoline prices in Europe are much more expensive than in the US. Europe has more preferential policies, such as free health care, education... And they have to compensate by paying sky-high gas prices. This explains why Europeans are so concerned about fuel consumption when buying a car.

Cultural differences are also a big issue for many car manufacturers. Some countries pay a lot of attention to the name and color when buying a car. There are countries that only care about the features of the car.

Speaking of culture, the classic story is the Chevrolet Nova. When Chevrolet introduced the car in Latin America, customers were reluctant to buy it. The Nova was associated with the phrase “no va,” which means “it doesn’t run.” Could Chevrolet sell the car? Obviously not. Carmakers can’t make money in a place where they don’t care about the local culture.

A typical strategy that brands use to attack foreign markets is variations. Although different, they rarely develop from scratch. They use an existing platform and develop a model that suits a certain market. They change the appearance, the engine, the equipment, the color or the name.

Sometimes, differences exist within the same country or region, such as when a corporation owns several brands. They choose to use the same platform, then develop each brand according to its own characteristics. General Motors is quite good at this, as can be seen in the similarities between the Cadillac Escalade, Chevrolet Suburban, GMC Yukon Denali, and Chevrolet Tahoe.

This is also the way Nissan uses. Or more broadly, many manufacturers cooperate to take advantage of resources to produce a platform, then build separate products to sell. An example can be the Toyota 86 and Subaru BRZ pair.

This is primarily cost-effective, and many auto brands still generate revenue this way, because they know how to take advantage of their unique marketing and dealer network.

One of the best car companies to approach foreign markets was Volkswagen when it entered China. During the period 1970 - 2000, many new car models were launched in China, most of which were Volkswagen products. The German car company also mastered the art of joint ventures, a prerequisite for a foreign car company to do business in China.