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Mercedes Keeps Accelerating as World’s Most Valuable Auto Brand

March 23, 2019 Motoring No Comments Email Email

Mercedes continues to be ranked the top auto brand in the world after its brand value increased 26% to US$60.3 billion, according to the latest report by Brand Finance, the world’s leading independent brand valuation and strategy consultancy.

Over the last year, Mercedes has continued to grow its global footprint and popularity in emerging markets. Its sales in China, for example, have risen by 11.7% to a record 600,000 units for 2018. As well as Mercedes’ esteemed reputation for quality and style, the brand is highly regarded for its innovative approach, having recently launched its electric EQ range.

Germany remains the dominant force in the auto industry boasting strong and trusted brands which all feature in the top 10 of the world’s most valuable auto brands, such as Volkswagen (brand value up 4% to US$41.7 billion); BMW (down 3% to US$40.5 billion), Porsche (up 54% to US$29.3 billion); and Audi (up 31% to US$19.6 billion).

Volkswagen’s portfolio of brands is the most potent in the market and combines a diverse set, including: Skoda, Porsche, Audi and Volkswagen. Skoda and Porsche both feature as brands with the highest brand value increase over the past year, Skoda’s brand value rising by 68% to US$2.7 billion and Porsche by 54% to US$29.3 billion. Porsche has benefited from the rise in popularity of sports utility vehicles (SUVs) and China’s growing appetite for high-performance sports cars, which is the second biggest market for luxury cars after the US.

German brands have managed to fend off the challenge from both Japan and China, with quality and reliability prevailing over an industry that is in the process of sweeping diversification.

Alex Haigh, Director, Brand Finance, commented:

“There is no denying the dominance of German auto brands amongst the world’s 10 most valuable this year. The combination of their trusted and long-standing heritage, a commitment to diversification, innovation and after sales-services really sets these German brands apart from the rest.”

Innovation is key

There has arguably never been such variety on offer across the auto sector, encompassing diesel, electric, hybrids and conventional petrol models. The rise of electric vehicles is impacting the shape of the market the most, with Chinese brands benefiting from recent government policy which encourages such production. The Chinese government have announced tax incentives and subsidies for companies manufacturing electric cars and across the country there are initiatives in place to expand the use of non-petrol vehicles. This combination has resulted in around 35% of all electric car sales coming from China.

Despite a renewed commitment to electric cars, there is no representation from Chinese brands in the top 10 of this year’s Brand Finance Auto 100 2019.

Similarly, Tesla (up 31% to US$7.5 billion), the producer of new technology vehicles, which scores highly for innovation, still has ground to make up. There are concerns about Tesla’s ability to achieve production scale, its financial health and around the behaviour of its maverick CEO, Elon Musk. More positively, Tesla has a very loyal customer base and in the electric car space, and a strong brand presence in particular across the US and the Middle East.

Volkswagen has impressed with its range of electric and hybrid vehicles and aims to convert all of its factories in preparation of electric car production by 2022. The brand is planning to produce 100,000 I.D. electric cars in the first year of operation. In contrast, Toyota (up 20% to US$52.3 billion), which has grown on the back of a high margin business, has been criticised for not seizing the electric car revolution early enough.

Roewe advancing fastest

Despite German autos success at the apex of industry, the fastest growing brand is China’s Roewe (SAIC), which increased its brand value by 137% to US$1.2 billion. Roewe has assumed the technology previously belonging to the now-defunct Rover of the UK and developed the world’s first mass-produced internet vehicle, cementing its place in both the electric and hybrid space.

Conversely, a trio of Chinese brands, Changan (down 52% to US$802 million), Haval (down 44% to US$3.8 billion) and BAIC (down 44% to US$881 million) all saw significant falls in their brand value.

Ferrari remains strongest

Aside from calculating overall brand value, Brand Finance also determines the relative strength of brands through a balanced scorecard of metrics evaluating marketing investment, stakeholder equity, and business performance. Along with the level of revenues, brand strength is a crucial driver of brand value.

Ferrari (brand value up 27% to US$8.3 billion) is the world’s strongest auto brand with a Brand Strength Index (BSI) score of 94.8 out of 100. This year, Brand Finance named the Italian supercar manufacturer as the world’ strongest brand, a position that it last held in 2014. Since its inception, Ferrari has remained synonymous with style and performance, enabling the brand to successfully extend into other sectors – from merchandise, such as hats and sunglasses, to theme parks, and even the Maranello Village, a Ferrari-themed hotel – without losing its appeal as a luxury brand.

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