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What Does Officially Licensed Mean?

There is a lot of confusion and misunderstanding in the marketplace about just what “Officially Licensed By General Motors” and “Officially Licensed by Ford Motor Company” (or Chrysler) really means. After all, you will see many products that are similar yet some are licensed and some are not.

  1. Why is it licensed?
  2. Why isn’t it licensed?
  3. Which one is better?
  4. Do GM and Ford inspect and endorse the products?
  5. Do GM and Ford control the quality of the products?
  6. What does licensing cost?

Q: Why is it licensed?

Products (parts or apparel) and bodies must be licensed when they are seen by the licensor (GM or Ford in our case) to represent a trademarked design or logo (use of “Chevrolet”, “Camaro”, the Chevy bowtie, “Ford”, etc.). In these cases, the licensee (in this case Real Deal Steel) is obligated to “officially license” the item before it is offered for sale. To explain trade dress, this quite simply means in our case “if it looks like a ’57 Chevy or a ’69 Camaro”, then it must be licensed. If we build a body with no skins (a skeleton) then, it does not look like a ’57 Chevy or a ’69 Camaro therefore it does not have to be licensed. The minute features are added that begin to suggest the overall body design (quarter panels, top skin) it must be licensed. Some manufacturers will voluntarily license a product even though it does not require a license just so the item can carry the “officially licensed” logo.

Q: Why isn’t it licensed?

Any item that does not carry a logo, name or script does not have to be licensed. Similarly, any reproduction body that does not violate "trade dress" (does not appear to represent an original manufacturer's design)is not required to carry a license. There are also body styles that the manufacturer may deem as too old or irrelevant to enforce a license on. For example: bumpers, bumper brackets, steering wheels, fenders, doors, wheels, weatherstripping, upholstery - does not require a license to produce and sell. Interestingly, even though the tailfin design on the ’57 Chevy is trademarked by GM, GM does not enforce the license on these. We know of no reproduction 1957 Chevy quarter panels that are licensed.

Q: Which one is better?

Does the fact that a product is licensed make it superior in any way to one that is unlicensed? In some ways, yes. When “the Big-3” actively became involved in licensing aftermarket products some 20+ years ago, it was Ford Motor Company that led the charge. Edsel Ford III (who is a car guy) spent some time walking the car shows and swap meets and began to see all types of Ford products for sale that his company did not make in-house. Edsel observed that the quality of some of the parts was poor, and what concerned him was that his family name was on junk parts. So, Ford began to require samples of all reproduction items that carried any Ford logo or trademark for approval and licensing. Those who did not comply (continued selling unlicensed products that were subject to license) were soon contacted by Ford’s attorneys and forced to comply or cease and desist. Realizing that licensing aftermarket products was potentially beneficial in providing a revenue stream as well as helping protect consumers from poor products and thereby protecting their trademark and brand, Chrysler and GM were not far behind in beginning licensing programs. When the Big-3 licensing programs first began, licensees were expected to produce only very high-quality items to be sold as licensed. The Big-3 promised that they would maintain strict standards and quality control on all licensed items. As time wore on, and the revenues generated for the Big-3 became more important, they began to license just about anything regardless of quality. That is when the entire licensing program began to lose credibility with manufacturers and consumers alike. Within the last year (2014-2015), GM has begun to realize that lax quality standards on products have hurt both the consumer that expects to be "protected" by the license as well as the GM brand name. GM is beginning to return to tougher quality standards when offering product licenses and is now engaged in a more rigorous follow-up and correction when consumers or fellow manufacturers have concerns about the quality of licensed products. This increased concern helps all involved - the licensor (GM, by improving the profile of their brand with consumers); the licensee (manufacturers like Real Deal Steel who must maintain or improve the quality of their products to remain viable - which in turn helps sales because customers are more likely to purchase when products are better) and more importantly, the customer, who is now more assured that the license program is working for them by giving them better products!

Q: Do GM and Ford inspect and endorse the products?

For small parts (emblems, shirts, etc.) most licensors do require that you submit a sample for inspection. A few substandard products still clear the inspection hurdle but inspection by the licensor certainly helps improve overall quality. Ford, GM and Chrysler all now inspect reproduction bodies and follow-up with spot inspections. GM is known to address and help correct issues that consumers have with substandard licensed products. However, buyers should always do their own research when making the decision to buy any product - particularly something as expensive as a car body.

Q: Do GM and Ford control the quality of the products?

Yes - but, the quality control must not only be a function of the licensor (GM, Ford, Chrysler); it must also be a concern of the manufacturer/licensee who must produce the best possible products and self-police their segment of the industry and the customer who should make it know to the manufacturer and the licensor when they feel they have received a substandard licensed product.

Q: What does licensing cost?

We have all heard the saying “Corporations don’t pay taxes; their customers do!” That simply means that the more a corporation is taxed, the more they charge their customers for the products they sell to maintain profitability. Thus, the end user (you) pays the taxes. It is no different with licensing. Most license fees are 8-10% of the sales price of the item. If we (the licensor) sell you an item for $10, $1 of what you pay us is going to the licensor. The higher price you pay for a licensed product does offer the customer some protections as well as a voice as discussed in the previous paragraphs.