[Jason]

BIMMERPOST NEWS

BMW Valuation Nearly Doubles Mercedes Car Business

45
COMMENTS

Tweet

Investors currently value BMW at approximately twice the amount of what Mercedes-Benz's car business is worth. BMW's market capitalization has risen to 45 billion euros ($58.8 billion) compared to 42.2 billion for Daimler. But, take away a reasonable estimated price for Daimler's truck business and that the market cap figure drops to 25 billion euros for Mercedes' passenger car business.

"The market is saying that the prospects for Mercedes are much worse than for BMW," said Hans-Peter Wodniok, an analyst with Fairesearch in Kronberg, Germany. "The market's always right. In terms of innovation, BMW is the leader." "The market's confidence in Daimler management is pretty much at rock bottom," said Max Warburton, a Bernstein analyst in Singapore. "Investors have little or no confidence that current management will be able to do what is necessary to close the gap to BMW."

What's the reason for Mercedes' dim prospects? Lagging growth in China, sluggish expansion into popular segments like compact sport-utility vehicles, and an image that lacks appeal for younger drivers have hindered the Mercedes brand, allowing the BMW and Audi brands to widen their sales lead in the luxury segment. The growing gap comes a year after Zetsche, whose current contract expires at the end of 2013, vowed to almost double deliveries to 2.6 million vehicles by the end of the decade and regain the top spot, which Mercedes ceded in 2005.

BMW's surge has overturned the historical pecking order in the German auto industry. Daimler, which tried to take over BMW in 1960, had a market capitalization 15.5 billion euros higher than BMW's just two years ago.

Source: Bloomberg / Autonews

Share this story

OTHER STORIES YOU MIGHT LIKE

Sibling Rivalry: BMW M235i Coupe vs M135i Hatchback

BMW M235i vs Mercedes CLA 250 Sport Visual Comparo

45k Sports Sedan Comparo: F30 328i M Sport vs IS250 F-Sport vs ATS 2.0T (Edmunds)

[E90MCF]

Not surprised at all :

[meng4n1to]

BMW for life!

[xborndaballx]

Good. Can't stand Mercedes.

[ManiacGT]

Now they just need to pop some of that lovely profit back into build quality!

[ALPINA B5]

well mercedes give your car a manual gearbox...and look at how cool your cars used to be in the past. the current e-class is god awful its practically a toyota camry with rwd.

[bmwaddict]

haha can you share with us a bigger picture than the one you have posted? lol so funny

edit: never mind i found it

[bimmerjph]

Even though, as an enthusiast, I am not a fan of where Reithofer is taking the company, he is one hell of a CEO. I would even go so far to say he is probably in the top 10 best in the world right now.

[Diver]

It doesn't take much to see what a mess Daimler is in. Look at what they did with Chrysler.

[positiveions]

Good news to my ears.

[宝马.e90]

Interesting. But what does this really mean to us? I mean sure, those numbers are attractive on financial statements but that's about it. It definitely doesn't mean that BMW is necessarily building better cars.

The way I see it is Mercedes' only focus is to be build the best luxury cars, period - and they probably do. I don't think you'll find many who will argue or disagree. They're lack of expansion, while may hurt them with investors, is probably doing a better job in keeping with their business.

As for BMW, you can't argue that they're not market/industry leaders. With that valuation, it's definitely great, but at what cost? We've all read the articles here and you would be blind to see what BMW is doing to move forward but with all this expansion, has it hurt or affected BMW and what their original core business - which is to build sport-orientated cars (Not going to answer that, don't want to start that argument again)?

[MY13E92M3]

Love this ad!!!!

[Rich@GTBPerformance]

Cool ad and interesting to note the market for MB's cars is in decline.

I wonder if it has anything to do with their god awful transmissions.

[r3dbimmer89]

Originally Posted by 宝马.e90

Interesting. But what does this really mean to us? I mean sure, those numbers are attractive on financial statements but that's about it. It definitely doesn't mean that BMW is necessarily building better cars.

The way I see it is Mercedes' only focus is to be build the best luxury cars, period - and they probably do. I don't think you'll find many who will argue or disagree. They're lack of expansion, while may hurt them with investors, is probably doing a better job in keeping with their business.

As for BMW, you can't argue that they're not market/industry leaders. With that valuation, it's definitely great, but at what cost? We've all read the articles here and you would be blind to see what BMW is doing to move forward but with all this expansion, has it hurt or affected BMW and what their original core business - which is to build sport-orientated cars (Not going to answer that, don't want to start that argument again)?

+1...At least when Merc lost site of their heritage back in the late 90s they tried to resurrect some of that Merc quality in their current line-up. I doubt it if BMW will ever return to their roots of being the ultimate driving machines.

When I see a W221 S Klasse I still see the standard of a luxury car. When I see an F30 3er, I see a boring/confused Audi with RWD...now that's something to talk about...my opinion is based more of how I feel about the handling rather than the way it looks BTW

[roadmax]

BMW has become a fat cat now, this is not very good news.
I'm afraid this will make BMW care less for what they have been known in the past and take direction towards even more marketing and profit taking at any cost.
We can see this just by looking at later car models they make.

[宝马.e90]

Originally Posted by r3dbimmer89

+1...At least when Merc lost site of their heritage back in the late 90s they tried to resurrect some of that Merc quality in their current line-up. I doubt it if BMW will ever return to their roots of being the ultimate driving machines.

When I see a W221 S Klasse I still see the standard of a luxury car. When I see an F30 3er, I see a boring/confused Audi with RWD...now that's something to talk about...my opinion is based more of how I feel about the handling rather than the way it looks BTW

I agree. Take a simple comparison between the 3-Series, A4 and C-Class. Those who have driven a current generation C-Class know it's nowhere near that of the E90 in terms of driving. You get the feeling that Mercedes doesn't really care. They stuck to making the most soft and comfortable ride and go on with their business and are happy with the results/sales. At the end of the day, you're not going to be disappointed on how soft a Mercedes feels. Some can't say the same about current BMW's.

While it's nice BMW wants to expand, I think they're trying to take on too much, too quick. I get that they want the title of innovation or market leader and so on but I'm sure there's a way to do all that without having to sacrifice certain aspects to achieve such goals.

[Never Convicted]

Originally Posted by 宝马.e90

I agree. Take a simple comparison between the 3-Series, A4 and C-Class. Those who have driven a current generation C-Class know it's nowhere near that of the E90 in terms of driving. You get the feeling that Mercedes doesn't really care. They stuck to making the most soft and comfortable ride and go on with their business and are happy with the results/sales. At the end of the day, you're not going to be disappointed on how soft a Mercedes feels. Some can't say the same about current BMW's.

While it's nice BMW wants to expand, I think they're trying to take on too much, too quick. I get that they want the title of innovation or market leader and so on but I'm sure there's a way to do all that without having to sacrifice certain aspects to achieve such goals.

Absolutely. BMW should make crappier cars and not lead in innovation. They need to sell fewer cars and models, and just be comfortable with what they have.

[宝马.e90]

Originally Posted by Never Convicted

Absolutely. BMW should make crappier cars and not lead in innovation. They need to sell fewer cars and models, and just be comfortable with what they have.

LOL. Where did I say BMW should not stop innovating? What makes a crappier car? If BMW still made the E46 or to a lesser extent E90 and those became the F30, would that be considered crappier? Because this is what BMW's valuation is revolving around. The argument is simple. Is BMW doing too much, too quick and by doing so, are they sacrificing too much? I'm sure people will agree. You can't tell me there isn't a balance in doing so.

Mercedes has basically become idle in terms of progress but are they making crappier cars? Absolutely not. Who knows, maybe they have something in the works we don't know about that's equally innovative as BMW but they're not doing it at a pace BMW is to garner accolades and titles.

[flinchy]

To me... The the only exciting mercs are AMG's.. Or the 'upper' models..

Their fuel efficient diesels are nice and all, but no moreso than .. A golf diesel..

Where a 328i, that's not bad.. Does merc even have anything close to the 135/335 domination bmw has had since 2007?.. Course not

Merc a class? Shiiit

Bmw 1er? Nice!

Audi a1? Not bad at all! Little but quick!

[Never Convicted]

Originally Posted by 宝马.e90

LOL. Where did I say BMW should not stop innovating? What makes a crappier car? If BMW still made the E46 or to a lesser extent E90 and those became the F30, would that be considered crappier? Because this is what BMW's valuation is revolving around. The argument is simple. Is BMW doing too much, too quick and by doing so, are they sacrificing too much? I'm sure people will agree. You can't tell me there isn't a balance in doing so.

Mercedes has basically become idle in terms of progress but are they making crappier cars? Absolutely not. Who knows, maybe they have something in the works we don't know about that's equally innovative as BMW but they're not doing it at a pace BMW is to garner accolades and titles.

Argument? Who are you arguing with? How did BMW's business come to be valued at twice MB's? What schedule should they have used up to now? Markets constantly change. And because 9 guys on a message board don't like that they changed a Coupe designation from 3 to 4 is not a valid reason for them to stop what they've been doing and refining to become so valuable. They'll make some, they'll miss some. But I just hope they won't become Mercedes, which is the German Lexus, which is the Japanese Caddy.

[宝马.e90]

Originally Posted by Never Convicted

Argument? Who are you arguing with? How did BMW's business come to be valued at twice MB's? What schedule should they have used up to now? Markets constantly change. And because 9 guys on a message board don't like that they changed a Coupe designation from 3 to 4 is not a valid reason for them to stop what they've been doing and refining to become so valuable. They'll make some, they'll miss some. But I just hope they won't become Mercedes, which is the German Lexus, which is the Japanese Caddy.

Wow...

You're clearly in the camp where more profits the better because you can't see that people will look at this valuation over Mercedes like BMW is making perfect cars.

We all know the how, what we're discussing is what did it do to the brand overall. If you think everything is rosy over in Munich and right now BMW is/can't do no wrong because how much they're valued at, then nothing is going to change your mind. You can talk about all this innovation they've done to become valued at this and that, great but guess what, that came at price on how their cars perform, period.

Again you keep going on about Mercedes like they're the bastard brand. Who cares if they're the German Lexus? Did they try to pretend that they were something else? Mercedes has always stuck to their business model - manufacture the best luxury cars. It's funny that you hope that BMW doesn't become Mercedes but you completely miss the direction BMW is going in. Not only have their cars become soft (an attempt to cater to those looking at Mercedes) but they're in fact becoming the German Toyota with all these models trying to cater to every market/demographic.

[Shane550X]

Originally Posted by xborndaballx

Good. Can't stand Mercedes.

Me too!