In its latest annual report, Brand Finance has named Mercedes-Benz as the world’s most valuable brand while Ferrari was recognised as the strongest automotive brand. The report differs from the one published by Interbrand, which also publishes its own brand valuation list.

On the top 10 most valuable brands list, Mercedes-Benz took the top spot following a 24% year-on-year growth to US$43.9 billion. This is largely thanks to an increase in in forecast revenue as car sales increased by 9.9% to 2.3 million vehicles. It is also a big jump for the brand with the three-pointed star, as it was third in last year’s rankings.

Coming in second was last year’s number one, Toyota, with US$43.7 billion (-6%) followed by BMW in third with US$41.8 billion (+6%), Volkswagen retaining its fourth spot with US$33.7 billion (+35%) and Honda with US$22.1 billion (+4%).

In the lower part of the list, we find Nissan in sixth with US$19.4 billion (-22%), Porsche with US$19.1 billion (+54%), Ford with US$17.3 billion (-23%), Audi with US$15 billion (+19%) and finally, Chevrolet with US$12.8 billion (+11%). Brands that didn’t make the top ten list include Tesla, although Elon Musk’s company did see a 106% year-on-year growth to US$5.7 billion for the 19th spot.

To calculate brand values, Brand Finance uses the Royalty Relief approach, a brand valuation method compliant with the industry standards set in ISO 10668. The method involves “estimating the likely future revenues that are attributable to a brand by calculating a royalty rate that would be charged for its use, to arrive at a ‘brand value’ understood as a net economic benefit that a licensor would achieve by licensing the brand in the open market.”

This involves calculating a brand’s strength using a balanced scorecard of metrics that assesses marketing investment, stakeholder equity and business performance – expressed as a Brand Strength Index (BSI) score on a scale of 0 to 100.

Next, the royalty range is determined based on the importance of brand when it comes to purchasing decisions. This is then used to calculate the royalty rate together with the BSI. After that, brand-specific revenues and forecast revenues are determined, before the royalty rate is applied. The tabulated brand revenues are then discounted post-tax to a net present value which equals the brand value.

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Focusing specifically on the BSI, Ferrari obtained the highest score with 91.5, followed by Porsche (87.3), Jaguar (86.9), BMW (85.6), Aston Martin (85.3), Volkswagen (85.2), Seat (84.1), Bentley (83.3), Toyota (82.9) and Renault (82.8).

In the same report, Brand Finance also prepared a list for the top 10 most valuable automotive portfolios, which looks at automotive groups as a whole. The Volkswagen Group retained its top spot here with a brand value of US$75.6 billion (+4%), while Daimler took the second spot with US$54.7 billion (+20%). BMW, Honda and Fiat Chrysler Automobiles all saw gains of between 1 and 15%, while China’s SAIC joins the top 10 list for the first time.

Decliners include Toyota in third with US$52.8 billion (-11%), Renault-Nissan-Mitsubishi Alliance in seventh with US$20.9 billion (-19%), General Motors in eighth with US$19.9 billion (-30%) and Ford in ninth with US$19.3 billion (-21%).