Wednesday, April 27, 2016

Another Company Changes Its Name to Distance Itself from a Prior Bad Association

Fisker Automotive changed its name to Karma Automotive in order to disassociate itself from its predecesser.  Fisker Automotive stopped producing vehicles in 2012 amid financial difficulty and a recall that led to bankruptcy.  Now, Chinese auto parts company, Wanxiang Group owns Fisker Automotive and decided to distance itself from the prior name in favor of Karma Automotive.  Karma Automotive is working to develop a luxury electric car which it hopes to start selling this summer.  

It makes sense, in today's markets, to try to maintain a strong brand and to distance oneself from tarnished brands.  That is certainly one of the reasons why Fisker decided to re-brand itself.  This is especially true since Fisker received a loan from the Energy Department in 2009 and caused the energy agency to lose $ 139 million on that loan when Fisker filed for bankruptcy protection.  

This is another example of how important a company's trademark or trade name can be and how it is virtually essential to maintain a strong one.