Mercedes Benz valued at half of BMW

Mercedes Benz was once the largest luxury car maker in the world. Investors were happy and proud with the German car maker. But things are…

Mercedes Benz was once the largest luxury car maker in the world. Investors were happy and proud with the German car maker. But things are changing. Today, Mercedes Benz has shifted to the No 3 position in the global car market (including India), behind fellow luxury car manufacturers, BMW and Audi.

The gap between them and leaders, is increasing, instead of decreasing. BMW’s market capitalization has increased to €45 billion as against Daimler’s €42.2 billion which if not taking Daimler’s truck business into account Mercedes stands at €25 billion, 50% of what BMW accounts for.

With BMW a leader, market prospects for Mercedes Benz are not as optimistic in the future, even though the company is striving hard to regain their market position. Sales in China and India, the emerging markets for luxury vehicles is sluggish and lacks luster for Mercedes Benz with more demand being shown to BMW, and Audi.

Market confidence is dwindling as we speak with investors showing no confidence in current management that they will be able to close the gap in the future while Mercedes Benz trails both BMW and Audi in the race for No.1 spot.

The main reasons given for this decline in sales is their inability to give a product that can compete in the small car and compact SUV segment. BMW and Audi have raced ahead mainly due to cars like, Q3, X1, 1 Series, and A3. Mercedes Benz hopes their A Class and GLA compact SUV, will help them pull back into the race to the top.

Source: AutoNews