DAVID FURLONGER: Tesla ups the brand ante

Tesla has leapfrogged traditional giants Volkswagen (VW) and BMW to occupy third place in the latest ranking of automotive brand values. While many companies saw their values decrease last year, Tesla’s rose by 44% and the company now has only Toyota and Mercedes-Benz ahead of it.

Toyota’s value grew by 8% to $64.3bn and Mercedes’s by 4% to $60.8bn. While Tesla, at $46bn, is still some way off those two, no-one is betting against it narrowing, or even closing, the gap in the future. In the past two years alone, its brand value has grown by 271%.

The latest ranking has just been published by UK-based brand valuation consultancy Brand Finance. Calculations take into account brand impact, including how much brands pay in royalty agreements; how brands affect profitability in their sector compared to other brands; activities supporting future growth of the brand; market perceptions; how much company revenue is directly attributable to the brand; and assessed future value.

Brand Finance says Tesla CEO Elon Musk, with his “charismatic” and “controversial” behaviour, has played an important part in its brand growth.

But it’s not the only one to flourish. Eight of the fastest-growing brands are Chinese — benefiting from that country’s leadership in the electric vehicle (EV) revolution. Great Wall Motors (GWM) and Build Your Dreams (BYD) led the way with 109% and 100% respectively. At $6.4bn, BYD’s value may be only 10% of Toyota’s, but it is significant that it has climbed to 19th on the global ranking. It is followed immediately by Haval, meaning China has not one but two brands in the top 20 for the first time.

Brand Finance says: “BYD, which specialises in electric vehicles, saw sales accelerating 232% in 2021 — making it the best-selling new-energy vehicle manufacturer in China for the ninth year.”

The top 10 value-ranked global brands are Toyota ($64,3bn), Mercedes ($60.8), Tesla ($46bn), VW ($41bn), BMW ($37.9bn), Porsche ($33.7bn), Honda ($28.2bn), Ford ($24.2bn), Nissan ($14.6bn) and Volvo ($14.2bn). Of those, VW, BMW, Porsche, Honda, Nissan and Volvo all lost value. Volvo shed a worrying 20%.

Still, it could have been worse. Audi also lost 20% and dropped out of the top 10 altogether. The biggest value losses were suffered by Baojun, a joint venture between General Motors (GM) and Chinese company SAIC, which shed 62%. It was followed by supercar brand McLaren (44%), Chinese brands JAC (34%) and Roewe (33%), and US brand Dodge (31%). Luxury carmaker Rolls-Royce dropped 27%.

One reason Toyota retained leadership is that it was better prepared than most for the global shortage of microchips, which has reduced vehicle production by well over 10-million units since the start of 2021. Brand Finance says the Japanese company’s contingency stockpiling of the chips “allowed the brand to keep production levels high when others faltered and resulted in Toyota outselling GM in North America in the first quarter of 2021 — the first time any brand has outsold GM in the region since 1998”.

It was also the only manufacturer to sell more than 10-million vehicles in 2021.

Its continued leadership is not guaranteed. “Toyota was one of the early adopters of hybrid technology, with its Prius model dominating the hybrid segment for years, but it has fallen behind in the increasingly competitive EV arena in recent years.”

Mercedes, by contrast, has grown EV sales by 90% this year. While other German brands lost value — some because of problems with transitioning to EV sales after their previous reliance on diesel vehicles — Mercedes has also benefited from the rebranding of parent company Daimler AG to Mercedes-Benz Group AG, thereby clarifying and deepening brand identity.

EVs aren’t the only sector dictating success among motor brands. Brand Finance valuation director Alex Haigh says SUVs and crossovers — capable of both tar and light offroad travel — are growing in popularity in all parts of the world. “This is, to some extent, eroding the previously large differences in model popularity between regions — such as the European tendency for small cars and the US one for large models.”

He adds: “Though demand looks positive across the industry, EVs are by the far the best-performing drivetrain type in terms of relative growth. In 2021, about 6.4-million plug-in electric vehicles were sold — an increase of over 100%. This represents a rise from 4.5% of all vehicles sold in 2020, to 9% in 2021.”

Brand Finance also values companies in other sectors of the automotive industry. Among tyre brands, Michelin remains top of the heap at $7.7bn, followed by Bridgestone ($7.1bn), Continental ($4.3bn), Dunlop ($2.5bn), Goodyear ($2.3bn) and Pirelli ($1.5bn).

Denso leads the way in the vehicle components sector with $4.2bn, followed by Hyundai Mobis ($3.7bn), Magna ($2.8bn), Sumitomo Electric ($2.4bn) and Valeo ($2.3bn).

The runaway leader among car rental brands is Enterprise, at $7.1bn. In its wake come Hertz ($2.9bn), Avis ($1.8bn), Europcar and Sixt (both $1.3bn) and Budget ($1.1bn). ​