Mercedes-Benz is 2018's most valuable car brand

German carmaker Mercedes-Benz jumped up two places to claim the numero uno position in Brand Finance's 2018 Most Valued Automotive Brands list. This follows its 24 percent YoY growth to $43.9 billion (Rs 277,316 crore), largely driven by its forecast revenue that saw car sales of 2.3 million vehicles, an increase of 9.9 percent.

Global business valuation consultancy Brand Finance’s annual report on the world’s most valuable automobile, auto component and tyre brands puts the German carmaker as the world's No. 1 valuable brand, ahead of Japanese carmajor Toyota.

“Mercedes-Benz invented the automobile, and is now leading the industry with a brand strategy focused on re-inventing the automobile. Their success has been driven by the introduction of a new generation of vehicles led by their renewed foray into SUVs and smooth evolution of new technologies to move away from traditional internal combustion engines,” said David Haigh, CEO, Brand Finance.

EVs drive future brand expectations
The report further states that both Toyota and BMW have made efforts to reshape the traditional internal combustion engine a cornerstone of their respective brands. Toyota’s Prius and BMW’s electric i3 and i8 vehicles both have very distinctive styling – a brand strategy that contrasts with the Leaf EV by Nissan (down 22% to $19.4 billion). Porsche (up 54% to $19.1 billion) has successfully launched a new hybrid model, the Panamera 4 e-hybrid focused on both sustainability and high performance, with the future promise of further sports models following on from the Porsche 918 Spyder.

Tesla (up 106% to $5.7 billion) has also recorded extremely strong brand value growth over the last year, rising from 30th to 19th place amongst automobile brands globally. However, doubts exist whether Tesla has the manufacturing capability in the short-term to satisfy consumer demand in terms of both volume and quality to match the brand expectations that they have created. By contrast, some industry incumbents have built their brands with over a century of experience in delivering on customer expectations.

Aston Martin and BYD saw a massive increase in brand value of 268 percent and 211 percent respectively, while Opel and Wuling saw a massive drop in the brand value by 67 percent and 52 percent respectively.

“Aston Martin is roaring back into the top ranks of luxury car makers. The brand is famed for offering a high-end product, and respected for the quality they deliver. Exploiting one of the strongest and broadest series of planned model launches in the sector, Aston Martin is now a darling for investors and a brand that Britain should be proud of,” David Haigh.

Chinese OEMs on hot pursuit
The report highlights that outside the Top 10 list, a number of Chinese OEMs have a remarkable brand value while focussing on their domestic market, which also is now the world’s largest.

This includes Haval (up 124% to US$6.8 billion), Geely (up 62% to US$6.0 billion), BYD (up 211% to US$3.4 billion), Baojun (up 98% to US$1.8 billion), and Foton (up 90% to US$1.0 billion). Recently, Geely purchased 9.7 percent stake in Daimler, seeking to work on electric cars with the German conglomerate, while the German government said it would keep a monitor on the relationship.

It further states that while the Chinese brands have succeeded in delivering strong value, but to date, only for the Chinese mass market. Outside China, the brands are largely unknown, and within the Chinese premium and luxury segments, foreign brands such as Mercedes-Benz continue to dominate. It expects Chinese brands to aquire Western brands in order to leverage their brand strength internationally, and to use their Chinese-focused brands to innovate low cost vehicles for their large domestic market.

SUVs continue their robust run
As manufacturers produce a whole range of new environmentally-friendly models, the sales of larger sports utility vehicles (SUVs) have generated a spike in revenues for many brands, leading to SUVs now representing around 34 percent of all new car sales to almost 28 million units globally. This includes Mercedes-Benz (805,000 SUVs sold globally in 2017 across several models) and Nissan (which sold over 810,000 X-Trail model cars alone).

The high-end SUV market is booming with a number of new product launches by luxury brands last year, including the Audi Q5 and Alfa Romeo Stelvio. In the near future, premium carmakers Rolls-Royce and Aston Martin are looking to cash in with the increased popularity of SUVs, as they seek to launch the Cullinan and DBX respectively in 2019.

Most valuable group portfolio
The Volkswagen Group continued its pole position in the most valuable portfolios, followed by Daimler and Toyota. While different corporations have implemented radically different ownership arrangements, ultra-premium brands such as Ferrari (up 6% to $6.5 billion) and Aston Martin have, over the last decade, become independent from their former ownership by huge conglomerates.

At the same time, however, increased consolidation and cooperation elsewhere in the automobile industry is demonstrated through the growing Renault-Nissan-Mitsubishi alliance, and the decision by Chinese carmaker Geely to purchase a stake in Daimler.

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Michelin is 2018's most valued tyre brand