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Audi, BMW, Lexus boast rising brand values: report

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March 11, 2014

BMW i3

German automaker Audi’s brand value rose 30 percent to $7 billion, while BMW climbed 20 percent to $29 billion, according to a new report by Brand Finance.

The Brand Finance Auto 100 report reveals that many luxury automakers have rising brand valuations, indicating that they are opening up production lines and that the overall market is fertile. However, the most powerful brand, Ferrari, retained its AAA+ status partially because of its decision to cap production at 7,000.

“Luxury brands are some of the most likely to succeed in 2014,” said Robert Haigh, communications director at Brand Finance, London. “We have seen continued rapid rates of brand value growth from brands such as Jaguar and Land Rover in developing nations and the U.S.

“Super-premium brands such as Ferrari and Lamborghini are also likely to do well as their target customers have been largely insulated from the turbulence affecting many other sections of society.

“The picture for the majority of brands is fairly positive however, with demand picking up even for mass market brands recently.”

Brand Finance calculates brand value by determining the royalties a corporation would have to pay to license its brand if it did not own it, known as the “royalty relief” method. Brand ratings are based on the strength, risk and potential of a brand relative to its competitors, expressed as a letter code from AAA+ to D, similar to a credit rating.

Thriving markets
BMW received the 2nd position on the ranking board, followed by Mercedes-Benz at 4, Porsche at 8, Audi at 12, Land Rover at 20, Lexus at 25, Ferrari at 26 and Bentley at 44.

All of these brands generated higher brand value in 2013. However, some brands including Audi, Lexus and Bentley received demoted brand ratings.

Although Ferrari halted production at 7,000, its brand value rose around 8 percent to $4 billion.

Luxury automakers are beginning to pair up with technology giant Apple to make their automobiles’ user interfaces easier for iPhone owners to operate and more engaging.

Italy’s Ferrari and Germany’s Mercedes-Benz are early adopters of Apple’s new CarPlay infotainment system that syncs up dashboard and wheel controls to the consumer’s Apple device. Until other automakers incorporate this system, Apple’s technology is going to give these two brands an advantage in the luxury market due to the proliferation of iPhone owners (see story).


Apple CarPlay in Mercedes-Benz C-Class

Other brands jostled for the spotlight during the opening days of the Geneva Motor Shows with a host of releases that will likely set the tone for the year.

Rolls-Royce unveiled a new Ghost series, Jaguar refreshed plans for a mid-sized sports sedan and Maserati boasted a founder-inspired concept car that propels its centenary celebrations. The lengthy motor show also provided automakers with an occasion to showcase new technologies, particularly on the mobile integration and wireless fronts (see story).


Ferrari California T

Bigger picture
According to the report, German-, Japanese- and United States-owned brands account for 74 percent of the total $388 billion brand value. France and Italy are being encroached upon by manufacturers based in India, South Korea and China.

None of the world’s 100 auto brands are British-owned, but much of the manufacturing, marketing and branding for brands recognized as British remains in native territory.

Furthermore, the brand value of the top 50 brands rose by $55 billion to $346 billion, and the gross margins of the five biggest manufacturers are the highest they have been for 10 years.

“I think there are signs that some of the Asian manufacturers, other than Japan, are beginning to capture a bigger share of the brand value pie as they capitalize on growing demand in their own countries,” Mr. Haigh said. “This is the case for China and India in particular.”

“The best way for [auto brands] to build their brands will be to produce safe, well designed, reliable and affordable models,” he said. “Japanese and Korean brands have been doing so for decades now and have created powerful brands individually.

“Just as importantly they have collectively forged powerful nation brands, meaning that people associate technical expertise, innovation and efficiency as much with Japan or Korea as they do Germany.”

Final Take
Joe McCarthy, editorial assistant on Luxury Daily, New York 

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Joe McCarthy is an editorial assistant on Luxury Daily. His beats are arts and entertainment, automotive, healthcare, real estate, sports and travel and hospitality. Reach him at joe@napean.com.

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