Ferrari, first of all: the world’s strongest automotive brand

8 years ago - Published in Alternative investments, Finance

Ferrari remains the world’s strongest automotive brand and is among the top 10 strongest brands across any industry, according to valuation and strategy consultancy Brand Finance.

The Maranello-based company has extended its brand strength advantage over second-placed Porsche. Its brand value is also up, increasing 40% to $6.15 billion. Toyota remains the most valuable auto brand, with a value of $46.3 billion

Ferrari’s brand strength has improved by three points this year to 92, leading to an upgrading of its brand rating to the maximum AAA+ designation. Porsche is the second most powerful auto brand with a score of 86. Coming in second is Porsche with a score of 86, while Volkswagen and Seat tie for third place scores of 84.9. Following those four automakers are BMW (84.5), Renault (84.2), Ford (83.8), Toyota (83.1), Rolls-Royce (83.0) and Lamborghini (82.3).
The strength of Ferrari’s brand is all the more remarkable given its increasingly commercial approach and improving revenues. 
“The fact Ferrari has boosted revenues without compromising brand strength suggests that it has found the perfect formula to sustainably exploit brand equity to maximize shareholder value,” Brand Finance CEO David Haigh said.

Former Ferrari Chairman Luca di Montezemolo enforced a strict production cap of 7,000 vehicles, convinced that this was essential to maintaining perceived exclusivity and brand strength, he said. However, since Sergio Marchionne took command, and particularly since Ferrari’s IPO, a less puritanical approach has been employed.
The annual production cap has been raised to 9,000 and a new Ferrari-based theme park, Ferrari Land, is set to open at Port Aventura in Spain on April 7. This increased commercial exploitation of the brand has seen brand value surge 40% to $6.15 billion this year, Haigh said.

Overall, the most valuable auto brand is Toyota. Its brand value has increased by 7% to $46.3 billion. Profitability remains strong and, at the date of valuation, most recently reported revenues were up 32% on the same period last year. Toyota was recently overtaken by Volkswagen AG as the biggest auto manufacturer by unit volume (Toyota sold 10,175,000 units in 2016 to Volkswagen AG’s 10,213,486) but Volkswagen’s sales are split between multiple brands including Volkswagen, Audi, Lamborghini, Skoda, SEAT, Porsche, Bentley, Bugatti and Ducati motorcycles.  
Volkwagen’s flagship VW brand is growing strongly, up 32% to $25 billion. Despite ongoing legal cases, VW is rebounding rapidly from the damage caused by the emissions scandal that broke in late 2015. This reputational recovery is clear from a 6-point improvement in brand strength, making VW the third strongest auto brand in the world. European sales rose in 2016, while sales in the increasingly critical Chinese market are up over 12%.

Brand Finance first evaluated to determine their power/strength (based on factors such as marketing investment, familiarity, loyalty, staff satisfaction and corporate reputation) and given a corresponding letter grade.