A VALUABLE BRAND: Ferrari has shown an increase in brand value, globally. Image: QuickPic
Cape Town - Each year, valuation and strategy consulting agency Brand Finance values the brands of thousands of the world’s biggest companies.
Brand Finance says that brands are 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 up to AAA+.
Brand strength is used to determine what proportion of a business’s revenue is contributed by the brand, which is projected into perpetuity to determine the brand’s value. The world’s 100 most valuable auto brands are then ranked and included in the Brand Finance Auto 100.
Ferrari's unique approach
Ferrari is the world’s most powerful auto brand and is among the top ten strongest brands from any industry, according to Brand Finance. Its 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.
READ: Ferrari SA boasts with impressive 2016 sales figures
The strength of Ferrari’s brand is all the more remarkable given its increasingly commercial approach and improving revenues. Former chairman Luca di Montezemolo enforced a strict production cap of 7000 vehicles, convinced that this was essential to maintaining perceived exclusivity and brand strength. 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 9000 and a new Ferrari land is set to open at PortAventura in Spain on April 7. This increased commercial exploitation of the brand has seen brand value surge 40% to $6.15-billion in 2017.
Toyota and VW
Overall, the most valuable auto brand is Toyota. Its brand value has increased by 7% to $46.3bn. Profitability remains strong and, at the date of valuation, most recently reported revenues were up 32% on the same period in 2016.
Toyota was overtaken by Volkswagen as the biggest auto manufacturer by unit volume, but Volkswagen’s sales are split between multiple brands including VW, Audi, Lamborghini, Skoda, SEAT, Porsche, Bentley, Bugatti and Ducati motorcycles.
READ: Top 15 car brands revealed
Volkwagen’s flagship VW brand is growing strongly, up 32% to $25bn. 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.