The value of the automotive sector is doing quite well despite a period of turmoil. Brand Finance published its latest report on 16th June. It makes an inventory of the European market by analyzing the 500 most valued and important brands. While the total value of these 500 brands has fallen by %, it has fallen from €1.96 trillion to €1.76 trillion in all sectors that do not seem to be affected in the same way.
For example, while the banking sector shows a 20% drop in cumulative %, the automotive sector is not at all on the same trend. Indeed, the automotive sector is the most valued sector on the European continent. It represents 14% of the total value of the brands in the 2021 ranking. Within this sector itself, brands such as Mercedes-Benz or Ferrari, place themselves at the top. One is the most valued, the other is the strongest. Thus, the report highlights the position of brands. However, this does not mean that the automobile has not been impacted by the crisis quite the contrary.
The automotive sector dominated by German brands
Brand Finance, the leading consulting firm in brand evaluation, is therefore drawing up its balance sheet for 2021. This year, it is also the first time that the ranking has been expanded. Indeed, it now includes 500 of the most valued brands in Europe. This should make it possible to make a comparison with the two other major world economies, the United States and China. Thus, the report offers a second place to Europe, which is experiencing upheavals linked to the pandemic. The United States is on the front step. China is just behind and catching up quickly.
If we look at the report in more detail, one sector stands out, and that is the automobile sector. It includes 27 brands. They alone account for 14% of the cumulative value of brands. In the automotive sector, we can see some brands stand out. Indeed,German brands still dominate the automotive industry. The seven brands total a value of €171.5 billion. More specifically, they account for three quarters of the automotive sector.
In this sense, Mercedes Benz is the brand that is the most valued in Europe. It is at the top of the ranking with a brand value of 49.6 billion euros. Following this, Volkswagen is not far away. The brand is in third place in the ranking. Even if it loses 1% of its value, it still represents EUR 40 billion. In 5th position BMW also shows a decline in value of 6%. However, this does not prevent it from reaching a value of EUR 34.4 billion. Finally Porsche is in 6th position with a value of 29.2 billion euros.
The observation is also that the year has not been kind to the automotive sector. Sales have been impacted by COVID-19. Indeed, despite its leading position, Mercedes Benz has lost 16% of brand value. It has been a difficult time to contemplate. This decrease is also explained by difficulties in communicating a clear strategy regarding electric mobility. With regard to the major issue of mobility, this point is not negligible. However, Mercedes has struggled to distribute a clear vision regarding its electric models. If trademarks are represented by a certain monetary value, they are also represented by a criterion of strength.
Ferrari, positions itself as the strongest brand in the sector
Indeed, Brand finance also analyzes the strength of brands. For this it takes into account the marketing investment, the image of the brand with stakeholders and finally the economic strength. By taking into account all of these criteria Brand Finance holds a winner in the automotive sector. This is the Ferrari brand. It must be said that it does not see red since it also places itself as the second strongest brand in the world. It has a Score Strength score of 93.9 out of 100. The strength of the brand to the horse pitched up, is not a coincidence. It must be said that Ferrari reacted particularly quickly to the health crisis.
In particular, it has stopped its production during the pandemic. By following, she made the choice to position herself on the establishment of a safe working environment. This strategy pays off. In fact, it has helped to minimize disruption on the one hand and to strengthen its brand reputation in the automotive sector on the other. As a result, Ferrari’s brand image has developed positively in terms of quality and responsibility.
Thus, this has led the Ferrari brand to rank as one of the best brands in terms of reputation. It is therefore placed in the Global Brand Equity Monitor ranking. In this sense, although the brand is a brand that inspires more than it is accessible,it displays an image without missteps. However, if the dream has a price, it can always be observed. For those who would like to caress with their eyes the famous red of the brand and the clean lines of the sportswomen, the FERRARI PALAU dealership opens its doors from Monday to Saturday in Mérignac.
Finally, following this landmark report, one point should be noted. This is the correlation between brand value and brand strength. Indeed, if we look at the case of Ferrari which has the greatest brand strength, the decline in its brand value has only slightly decreased. It fell slightly by 4% to a value of 7.9 billion. It also plans to take measures to preserve the exclusivity of its trademark by reducing the current licensing agreements and reducing its product categories.
Sources:
“Car brands dominate in Europe: Mercedes and Ferrari, at the top of the Top 500 most valued and strongest brands” Brand finance, press release of 16 June 2021
“BRAND FINANCE EUROPE 500 2021” Brand Finance, Brand Finance 500 Europe Report 2021
