Auto 100 2017 The annual report on the world’s most valuable automobile brands February 2017 Foreword Contents

wasted resources and a negative impact on the Foreword 2 bottom line. Definitions 4 Brand Finance bridges the gap between the Methodology 6 marketing and financial worlds. Our teams have experience across a wide range of disciplines Executive Summary - Auto 100 8 from market research and visual identity to tax and accounting. We understand the importance Executive Summary - SUVs 12 of design, advertising and marketing, but we also believe that the ultimate and overriding Executive Summary - Tyres 10 14 purpose of brands is to make money. That is Executive Summary - Auto Portolios 10 16 why we connect brands to the bottom line. By valuing brands, we provide a mutually intelligible Full Table - Auto 100 (USDm) 18 language for marketers and finance teams. Marketers then have the ability to communicate Understand Your Brand’s Value 20 the significance of what they do and boards can David Haigh, CEO, Brand Finance use the information to chart a course that How We Can Help 22 maximises profits. Without knowing the precise, What is the purpose of a strong brand; to attract Contact Details 23 customers, to build loyalty, to motivate staff? All financial value of an asset, how can you know if true, but for a commercial brand at least, the first you are maximising your returns? If you are answer must always be ‘to make money’. Huge intending to license a brand, how can you know investments are made in the design, launch and you are getting a fair price? If you are intending ongoing promotion of brands. Given their to sell, how do you know what the right time is? potential financial value, this makes sense. How do you decide which brands to discontinue, Unfortunately, most organisations fail to go whether to rebrand and how to arrange your beyond that, missing huge opportunities to brand architecture? Brand Finance has effectively make use of what are often their most conducted thousands of brand and branded important assets. Monitoring of brand business valuations to help answer these performance should be the next step, but is questions. often sporadic. Where it does take place it frequently lacks financial rigour and is heavily Brand Finance’s recently conducted share price reliant on qualitative measures poorly study revealed the compelling link between understood by non-marketers. As a result, strong brands and stock market performance. It marketing teams struggle to communicate the was found that investing in the most highly value of their work and boards then branded companies would lead to a return underestimate the significance of their brands to almost double that of the average for the S&P the business. Skeptical finance teams, 500 as a whole. Acknowledging and managing a unconvinced by what they perceive as marketing company’s intangible assets taps into the hidden mumbo jumbo may fail to agree necessary value that lies within it. The following report is a investments. What marketing spend there is can first step to understanding more about brands, end up poorly directed as marketers are left to how to value them and how to use that operate with insufficient financial guidance or information to benefit the business. The team accountability. The end result can be a slow but and I look forward to continuing the conversation steady downward spiral of poor communication, with you.

2. Brand Finance AustraliaGlobalAirlinesAuto 100 500 30 100& 30FebruaryTyres MarchFebruary 10 2016February2016 2015 2017 Brand Finance Auto 100 & Tyres 10 February 2017 3. Definitions

Effect of a Brand on Stakeholders E.g. Definitions Volkswagen + Enterprise Value – the value of the Group entire enterprise, made up of Directors Potential Middle ‘Branded‘Branded multiple branded businesses Customers Managers Enterprise’Enterprise’

Existing All Other ‘Branded‘Branded + Branded Business Value – the Customers Employees Business’ E.g. Business’ Porsche value of a single branded business operating under the subject brand ‘Brand’ Contribution’ Influencers Production + Brand Contribution– The total e.g. Media Brand E.g. economic benefit derived by a Porsche business from its brand ‘Brand Value’ Trade Sales Channels E.g. + Brand Value – the value of the Porsche trade marks (and relating Strategic marketing IP and ‘goodwill’ Debt Allies & providers attached to it) within the branded Suppliers Investors business

Branded Business Value Brand Contribution Brand Value Brand Strength

A brand should be viewed in the context of the The brand values contained in our league In the very broadest sense, a brand is the focus Brand Strength is the part of our analysis most business in which it operates. For this reason tables are those of the potentially transferable for all the expectations and opinions held by directly and easily influenced by those Brand Finance always conducts a Branded brand asset only, but for marketers and customers, staff and other stakeholders about responsible for marketing and brand Business Valuation as part of any brand managers alike, an assessment of overall an organisation and its products and services. management. In order to determine the valuation. Where a company has a purely mono- brand contribution to a business provides However, when looking at brands as business strength of a brand we have developed the branded architecture, the business value is the powerful insights to help optimise performance. assets that can be bought, sold and licensed, a Brand Strength Index (BSI). We analyse same as the overall company value or more technical definition is required. marketing investment, brand equity (the ‘enterprise value’. Brand Contribution represents the overall uplift goodwill accumulated with customers, staff and in shareholder value that the business derives Brand Finance helped to craft the internationally other stakeholders) and finally the impact of In the more usual situation where a company from owning the brand rather than operating a recognised standard on Brand Valuation, ISO those on business performance. owns multiple brands, business value refers to generic brand. 10668. That defines a brand as “a marketing- the value of the assets and revenue stream of related intangible asset including, but not limited Following this analysis, each brand is assigned the business line attached to that brand Brands affect a variety of stakeholders, not just to, names, terms, signs, symbols, logos and a BSI score out of 100, which is fed into the specifically. We evaluate the full brand value customers but also staff, strategic partners, designs, or a combination of these, intended to brand value calculation. Based on the score, chain in order to understand the links between regulators, investors and more, having a identify goods, services or entities, or a each brand in the league table is assigned a marketing investment, brand tracking data, significant impact on financial value beyond combination of these, creating distinctive rating between AAA+ and D in a format similar stakeholder behaviour and business value to what can be bought or sold in a transaction. images and associations in the minds of to a credit rating. AAA+ brands are maximise the returns business owners can stakeholders, thereby generating economic exceptionally strong and well managed while a obtain from their brands. benefits/value” failing brand would be assigned a D grade.

4. Brand Finance Auto 100 & Tyres 10 February 2017 Brand Finance Auto 100 & Tyres 10 February 2017 5. Methodology

League Table Valuation Methodology Brand Finance Typical Project Approach Brand Finance calculates the values of the 2 Determine the royalty rate range for the respective brands in its league tables using the brand sectors. This is done by reviewing ‘Royalty Relief approach’. This approach comparable licensing agreements sourced from involves estimating the likely future sales that are Brand Finance’s extensive database of license attributable to a brand and calculating a royalty agreements and other online databases. Brand Equity Stakeholder Brand Inputs Performance rate that would be charged for the use of the 3 Calculate royalty rate. The brand strength score is Value Drivers Behaviour Contribution brand, i.e. what the owner would have to pay for applied to the royalty rate range to arrive at a royalty the use of the brand—assuming it were not rate. For example, if the royalty rate range in a already owned. brand’s sector is 1-5% and a brand has a brand The steps in this process are as follows: strength score of 80 out of 100, then an appropriate 1 2 3 4 royalty rate for the use of this brand in the given Brand Audit Trial & Preference Acquisition & Valuation Modelling 1 Calculate brand strength on a scale of 0 to 100 sector be 4.2%. Retention based on a number of attributes such as emotional 4 Determine brand specific revenues estimating a connection, financial performance and sustainability, proportion of parent company revenues attributable Audit the impact Run analytics to Link stakeholder Model the impact of behaviour on to a specific brand. of brand understand how behaviour with core financial performance and among others. This score is known as the Brand key financial isolating the value of the brand 5 Determine forecast brand specific revenues using a management and perceptions link to Strength Index, and is calculated using brand data investment on behaviour value drivers contribution from the BrandAsset® Valuator database, the function of historic revenues, equity analyst brand equity world’s largest database of brands, which measures forecasts and economic growth rates. brand equity, consideration and emotional imagery 6 Apply the royalty rate to the forecast revenues to attributes to assess brand personality in a category derive brand revenues. agnostic manner. 7 Brand revenues are discounted post tax to a net present value which equals the brand value. Brand strength Brand Brand revenues Brand value index ‘Royalty rate’ How We Help to Maximise Value (BSI)

6. Build scale through licensing/franchising/partnerships Brand Strong brand investment 5. Build core business through market expansion

4. Build core business through product development Brand

equity Maximising a strong brand 3. Portfolio management/rebranding Group companies

2. Optimise brand positioning and strength Brand Weak brand performance Forecast revenues 1. Base-case brand and business valuation (using internal data), growth strategy Evaluate ongoing performance formulation, target-setting, scorecard and Brand strength BSI score applied to an Royalty rate applied to Post-tax brand tracker set-up expressed as a BSI appropriate sector forecast revenues to revenues are Current brand and Target brand and score out of 100. royalty rate range. derive brand values. discounted to a net business value business value present value (NPV) which equals the brand value. 6. Brand Finance Auto 100 & Tyres 10 February 2017 Brand Finance Auto 100 & Tyres 10 February 2017 7.

Executive Summary - Auto 100

Rank 2017: 1 2016: 1 Rank 2017: 6 2016: 4 BV 2017: $ 46,255m BV 2017: $ 22,432m 1 +7% 6 +13% BV 2016: $ 43,064m BV 2016: $ 19,771m Brand Rating: AAA- Brand Rating: AAA-

Auto Rank 2017: 2 2016: 2 Rank 2017: 7 2016: 5 BV 2017: $ 37,124m BV 2017: $ 21,318m 2 +6% 7 +10% BV 2016: $ 34,968m BV 2016: $ 19,332m Brand Rating: AAA- Brand Rating: AAA-

Rank 2017: 3 2016: 3 Rank 2017: 8 2016: 8 100 3 BV 2017: $ 35,544m +11% 8 BV 2017: $ 12,546m +28% BV 2016: $ 32,049m BV 2016: $ 9,836m Brand Rating: AAA- Brand Rating: AAA-

Rank 2017: 4 2016: 6 Rank 2017: 9 2016: 18 BV 2017: $ 12,396m 4 BV 2017: $ 25,014m +32% 9 +178% BV 2016: $ 18,923m BV 2016: $ 4,463m Brand Rating: AAA Brand Rating: AAA

Rank 2017: 5 2016: 7 Rank 2017: 10 2016:9 BV 2017: $ 24,768m BV 2017: $ 11,525m 5 +39% 10 +29% BV 2016: $ 17,785m BV 2016: $ 8,918m Brand Rating: AAA- Brand Rating: AAA-

Toyota has once again reinforced its status as the VW is rebounding rapidly from the damage Porsche is the most valuable luxury auto remained exclusive. This somewhat puritanical world’s most valuable auto brand. Its brand value caused by the emissions scandal that broke in manufacturer. Previously evaluated as a approach has been replaced with a more has increased by 7% to US$46.3 billion. late 2015. This reputational recovery is clear from conventional auto brand, a more accurate royalty nuanced strategy since Sergio Marchionne took Profitability remains strong and, at the date of a 6-point improvement in brand strength, making rate properly evaluating the enhanced role of control and Ferrari seems to be reaping the valuation, most recently reported revenues were VW the third strongest auto brand in the world. brand in Porsche purchase decisions, reveals a rewards. Q4 revenues beat analyst expectations up 32% on the same period last year. was European sales rose (albeit below the competitor brand value of US$12.4 billion. Sales reached a which saw shares rise 4% earlier this month. recently overtaken by Volkswagen as the biggest average) while sales in the increasingly critical record high of 237,778 units in 2016, though Brand value is up 40% to US$6.15bn. Brand auto manufacturer by unit volume. Toyota sold Chinese market are up over 12%. management is clearly conscious of the potential strength is up too, indicating that, like Porsche, 10,175,000 units in 2016 to Volkswagen’s risks to brand equity that this poses. Executive Ferrari is for now managing to sustainably exploit 10,213,486. However, Volkswagen’s sales are Chinese brands such as , and Wuling board chairman Oliver Blume recently noted that the power of its brand. split between multiple brands including VW, Audi, are making their presence felt in the Auto 100. he regards maintaining exclusivity as more Lamborghini, Skoda, SEAT, Porsche, Bentley, Geely shipped 766,000 units in 2016, 50% more important than hitting sales targets. For now, Other FCA brands have not done so well this Bugatti and Ducati motorcycles. Toyota’s than 2015 and is targeting a further 34% increase Porsche appears to be balancing financial growth year. Like VW, Fiat has been revealed to have production is much more concentrated around in 2017 to deliver over a million. In order to help and brand protection well. Its brand strength ‘cheated’ diesel emissions tests, hitting US sales the core brand, with Hino, , and deliver this, Geely is targeting a controlling stake score is unchanged at 86, making it the world’s by 54%. Brand value is down 64% which sees Ranz making up a relatively small proportion of in Malaysia’s Proton, which would create 150,000 second most powerful auto brand behind Ferrari. Fiat lose its place as Italy’s most valuable auto the total. For this reason, the value of the Toyota units of additional capacity. Profits more than Ferrari is also walking the tightrope between brand to its luxury stablemate Ferrari. Maserati is brand remains nearly double that of VW’s. doubled last year, helping to drive brand value commercial exploitation and brand equity also down following a major recall program growth of 154% to US$3.7 billion. protection. While charismatic former chairman including 20,000 cars in China and 40,000 in the VW’s brand is growing strongly however, up 32% Luca di Montezemolo was still in charge, a strict US. to US$25 billion. Despite ongoing legal cases, production cap was enforced to ensure the brand 8. Brand Finance Auto 100 & Tyres 10 February 2017 Brand Finance Auto 100 & Tyres 10 February 2017 9.

Executive Summary - Auto 100

Brand Value Over Time Brand Value Change 2016-2017 (USDm) The 10 Most Powerful Auto Brands. These are the world’s most powerful auto brands. Brand 50 Porsche $7933 ratings are based on Brand Finance’s Brand Strength Index178% Porsche Nissan $6983 (BSI). 154% 45 Geely Volkswagen $6091 Brembo 100% 40 Subaru $4057 SubaruBSI Score 100% Volkswagen Mercedes-Benz $3495 Yamaha 52% Toyota $3190 Isuzu 45% 35 91.9 Renault $2769 Ferrari 39% Mercedes-Benz Audi $2710 NissanBSI Score 39% 30 Ford $2661 Opel 37% Chevrolet $2607 Renault 37% 25 $-446 Peugeot -27% 86.0Infiniti BMW $-544 -31% Magneti Marelli BSI Score 20 $-687 Land Rover -36% FAW $-1134 Chrysler -38% Harley-Davidson Toyota Brand ae n 15 $-1159 Maserati -50% 84.9Maserati $-1457 RAM Trucks -51% Dodge $-1637 Dodge BSI Score 10 -55% Chrysler $-1906 Harley-Davidson -56% Jeep $-2077 Jeep -63% RAM Trucks 5 84.9 $-3232 Fiat -64% Fiat -4500.000000-2642.857143-785.7142861071.4285712928.5714294785.7142866642.857143 -80 -52 -24 BSI4 32 Score60 88 116 144 172 200 0 2011 2012 2013 2014 2015 2016 2017 Brand Value Change 2016-2017 (%) 84.5 BSI Score Porsche $7933 Porsche 178% Nissan $6983 Geely 154% Volkswagen $6091 Brembo 100% 84.2 Subaru $4057 Subaru 100% Mercedes-Benz $3495 Yamaha 52% BSI Score Toyota $3190 Isuzu 45% Renault $2769 Ferrari 39% 83.8 Audi $2710 Nissan 39% Ford $2661 Opel 37% BSI Score Chevrolet $2607 Renault 37% $-446 Peugeot -27% 83.1 $-544 Mazda -31% Magneti Marelli $-687 Land Rover -36% FAW BSI Score $-1134 Chrysler -38% Harley-Davidson $-1159 Maserati -50% Maserati $-1457 RAM Trucks -51% Dodge 83.0 $-1637 Dodge -55% Chrysler BSI Score $-1906 Harley-Davidson -56% Jeep $-2077 Jeep -63% RAM Trucks $-3232 Fiat -64% Fiat 82.3 -4500.000000-2642.857143-785.7142861071.4285712928.5714294785.7142866642.857143 -80 -52 -24 4 32 60 88 116 144 172 200

10. Brand Finance Auto 100 & Tyres 10 February 2017 Brand Finance Auto 100 & Tyres 10 February 2017 11.

Executive Summary - SUVs

The 5 Most Valuable SUV Brands.

Rank 2017: 1 2016: 1 1 BV 2017: $ 7,199m BV 2016: $ 7,886m -9% Brand Rating: AA+

Rank 2017: 2 2016: 3 2 BV 2017: $ 3,017m BV 2016: $ 2,163m +40% Brand Rating: AA+

Rank 2017: 3 2016: 4 3 BV 2017: $ 2,076m BV 2016: $ 1,584m +31% Brand Rating: AA+

Rank 2017: 4 2016: 2 4 BV 2017: $ 1,654m -56% BV 2016: $ 3,731m Brand Rating: AA+

Rank 2017: 5 2016: 5 5 BV 2017: $ 527m BV 2016: $ 560m -6% Brand Rating: A+ The 5 Most Powerful SUV Brands. The SUV segment is the fastest growing to and retains a brand value more than double SUVs is on an upward trajectory; the segment compared to its industry counterparts. For three that of its nearest competitor. That being said, saw a 36% year-on-year increase and accounted BSI Score quarters of 2016, SUV sales volumes grew 33% there has been a slight decline in brand strength for 40% of total car sales in China, the biggest compared to a mere 2.5% for cars. Markets have from 77 to 76. automotive market in the world. The spike in the 77.4 seen buyer preference shift towards aspirational nation’s sales is partially in response to the products and thanks to their comfort, practicality Land Rover’s discontinuation of its original and halving of the country’s sales tax. However, the BSI Score and versatility, SUVs are becoming increasingly deeply loved Defender model may be affecting Chinese government has said tax will be restored popular. The array of choice within the SUV perceptions somewhat, though Land Rover’s in phases and will likely climb to the original 10% 77.3 segment, such as diesel, petrol, hybrid and parent, Tata, will hope that its new iteration will by 2018 which may dampen the auto segment’s electric variants, also contributed to driving recapture that affection. More serious are growth. BSI Score demand up. Entry segments offer the next set of declining revenues. Reported annual revenues growth opportunities; emerging markets already dropped from US$27.3bn to US$19.8bn, while Despite this, it has been predicted that SUVs will 75.7 account for 70% of entry segment sales and the the fall in forecast growth is similarly significant, continue to grow at a 4.8% CAGR globally. The figure continues to grow approximately 5% each contributing to a brand value fall of 9% this year. growing middle class will be among the key BSI Score year. driving forces behind the continued surge in China’s Haval, valued at US$3 billion after a 40% global sales. It has been forecasted that SUV 75.6 Land Rover leads the SUV table with a value of increase, follows in second. The competitive sales will reach 27.6 million units by 2021, a 30% US$7.2 billion. Land Rover remains the most price of its products and home-market popularity increase from 2016. It does not seem likely that BSI Score valuable SUV brand. It is undoubtedly the have undoubtedly contributed to its impressive the demand for SUVs will wane in the near future, benchmark that other SUV manufacturers aspire growth. Like many others, the Chinese market for but the segment must not be complacent: it is by no means immune to saturation. 63.8 12. Brand Finance Auto 100 & Tyres 10 February 2017 Brand Finance Auto 100 & Tyres 10 February 2017 13.

Executive Summary - Tyres 10

Rank 2017: 1 2016: 1 Rank 2017: 6 2016: 6 BV 2017: $ 7,482m BV 2017: $ 1,577m 1 +15% 6 +13% BV 2016: $ 6,528m BV 2016: $ 1,399m Brand Rating: AA+ Brand Rating: A+ Tyres Rank 2017: 2 2016: 2 Rank 2017: 7 2016: 7 BV 2017: $ 6,089m BV 2017: $ 1,393m 2 +3% 7 +6% BV 2016: $ 5,922m BV 2016: $ 1,312m Brand Rating: AAA- Brand Rating: AA

Rank 2017: 3 2016: 3 Rank 2017: 8 2016: 9 3 BV 2017: $ 3,634m -4% 8 BV 2017: $ 1,100m +12% 10 BV 2016: $ 3,774m BV 2016: $ 978m Brand Rating: AA+ Brand Rating: AA

Rank 2017: 4 2016: 4 Rank 2017: 9 2016: 8 BV 2017: $ 1,033m 4 BV 2017: $ 2,099m +15% 9 -11% BV 2016: $ 1,831m BV 2016: $ 1,167m Brand Rating: AA+ Brand Rating: AA-

Rank 2017: 5 2016: 5 Rank 2017: 10 2016:10 BV 2017: $ 1,836m BV 2017: $ 820m 5 +12% 10 +5% BV 2016: $ 1,637m BV 2016: $ 781m Brand Rating: AA+ Brand Rating: AA-

Brand Value Over Time The rising cost of raw materials – specifically, Yokohama, the fastest falling brand, drops 11% in 8 natural rubber prices, is driving tyre prices up value to US$1 billion. The brand recorded a worldwide. In spite of this, eight of the ten most decline in profits of almost 50% in the first half of 7 valuable brands in the table have seen their 2016 as a result of a 38% decline in operating brand values rise this year. income. The Japanese brand puts the negative 6 performance and decline in sales down to Bridgestone is the fastest growing and most weakening demand and a decline in Japanese valuable brand, its value jumping 15% to US$7.5 vehicle production. 5 billion. Maintaining its place at the top of the table comes as no surprise as the brand claimed the Despite its deflated value, Yokohama’s 4 award for ‘Tyre Manufacturer of the Year’ for the acquisition of Alliance Tire Group (ATG) will help second consecutive year at the Tyre Industry strengthen the former’s product offering in 3

Awards 2016. Additionally, Maserati has selected commercial tyres and the brand may see its value Brand ae n Bridgestone tyres for its first SUV, Levante. The grow in the following year. contract continues a historical relationship 2 between the luxury automobile brand and the Michelin comes in second with a brand value of tyre manufacturer, reinforcing the continuous US$6.1 billion after rising 3%. Continental follows 1 positive reputation of Bridgestone’s products. behind in third despite falling 4% to US$3.6 billion. 0 2011 2012 2013 2014 2015 2016 2017

14. Brand Finance Auto 100 & Tyres 10 February 2017 Brand Finance Auto 100 & Tyres 10 February 2017 15.

Executive Summary - Auto Portfolios

1 Rank 2017: 1 6 Rank 2017: 6 BV 2017: $ 72,861m BV 2017: $ 25,879m

Auto Portfolios 2 Rank 2017: 2 7 Rank 2017: 7 BV 2017: $ 59,647m BV 2017: $ 24,341m

3 Rank 2017: 3 8 Rank 2017: 8 10 BV 2017: $ 45,557m BV 2017: $ 23,741m

4 Rank 2017: 4 9 Rank 2017: 9 BV 2017: $ 44,928m BV 2017: $ 15,292m

5 Rank 2017: 5 10 Rank 2017: 10 BV 2017: $ 28,263m BV 2017: $ 13,737m

It is useful to look not just at the values of a General Motors is some way behind despite its specific brand but also the combined values of all roster of iconic brand such as Chevrolet, Buick brands owned by a corporate organisation. This and Opel. GM’s portfolio may shrink in size by emphasises that brands are assets of a larger the time of next year’s portfolio table, as it looks enterprise to be used to maximise business to sell Opel (and UK counterpart Vauxhall) to value. It also levels the playing field, in that Citroen and Peugeot owner PSA group. Opel has companies that employ a mono-brand structure proved loss-making for GM, which has failed to } frequently see brands bearing their company turn a profit in Europe since 1999. name performing well in brand value league tables. It could well prove a much better fit for PSA however, with its long established European Meanwhile, companies with a diverse, house of expertise. Both parties would be well-advised to brands portfolio (which may be by far the most thoroughly assess the value of the two brands to effective strategy for their circumstances) do not ensure a fair price in the exchange. receive the commensurate prestige. Comparing portfolio values rather than individual brand Post-acquisition, an audit of brand drivers would values in this way reveals Volkswagen AG’s be a sensible move for PSA, in order to help status as the owner of the most valuable portfolio avoid the under-performance that dogged GM’s of auto brands. The total value of its collection is tenure. over US$13 billion greater than Toyota. Volkswagen AG has one of the most extensive, and the most valuable, portfolio of auto brands

16. Brand Finance Auto 100 & Tyres 10 February 2017 Brand Finance Auto 100 & Tyres 10 February 2017 17. Brand Finance Brand Finance Auto 100 (USDm) Auto 100 (USDm)

Top 100 most valuable automobile brands 1 - 50. Top 100 most valuable automobile brands 51 - 100.

Rank Rank Brand name Domicile Brand % Brand Brand Brand Rank Rank Brand name Domicile Brand % Brand Brand Brand 2017 2016 value (USDm) change value(USDm) rating rating 2017 2016 value (USDm) change value (USDm) rating rating 2017 2016 2017 2016 2017 2016 2017 2016 1 1 Toyota Japan 46,255 7% 43,064 AAA- AAA- 51 53 Cadillac 2 2 BMW Germany 37,124 6% 34,968 AAA- AAA 52 25 Jeep 3 3 Mercedes-Benz Germany 35,544 11% 32,049 AAA- AAA 53 60 Skoda 4 6 Volkswagen Germany 25,014 32% 18,923 AAA AA+ 54 58 Magna 5 7 Nissan Japan 24,768 39% 17,785 AAA- AAA- 55 27 Dodge 6 4 Ford United States 22,432 13% 19,771 AAA- AAA- 56 75 Yamaha 7 5 Honda Japan 21,318 10% 19,332 AAA- AAA- 57 63 JAC Motors 8 8 Audi Germany 12,546 28% 9,836 AAA- AAA- 58 51 Citroen 9 18 Porsche Germany 12,396 178% 4,463 AAA AAA 59 55 Jaguar 10 9 Chevrolet United States 11,525 29% 8,918 AAA- AAA- 60 66 Hero 11 12 Renault 61 64 Iveco 12 10 Hyundai 62 69 Dacia 13 22 Subaru 63 56 Dongfeng 14 11 Land Rover 64 62 Faurecia 15 19 Ferrari 65 65 Tata Motors 16 20 MINI 66 71 Lamborghini 17 24 GMC 67 New NAPA 18 16 Kia 68 73 Bajaj Auto 19 15 Lexus 69 72 Vauxhall 20 21 70 37 Maserati 21 29 Isuzu 71 74 Seat 22 17 Mazda 72 57 Infiniti 23 26 Denso 73 68 BYD Motors 24 61 Geely 74 76 25 28 MAN 75 70 JMC 26 23 Volvo 76 67 Aston Martin 27 34 Opel 77 New Great Wall 28 New Toyota Industries 78 48 Chrysler 29 14 Harley-Davidson 79 81 Smart 30 New Haval 80 New Bao Jun 31 31 Tesla Motors 81 39 RAM Trucks 32 49 Polaris Inds 82 80 McLaren 33 46 Daihatsu 83 84 34 41 Maruti Suzuki 84 78 Renault Trucks 35 45 Hino 85 79 DAF 36 38 Mitsubishi 86 87 Holden 37 40 87 New Nexteer Automoti 38 New Wuling 88 New Motion Industries 39 42 Rolls- Royce 89 90 Mack 40 36 Kenworth 90 88 Ashok Leyland 41 47 Buick 91 85 Xiamen 42 50 Scania 92 77 FAW 43 33 Peugeot 93 86 SSangYong 44 35 Changan 94 99 Brembo 45 54 Mahindra 95 89 Foton 46 44 Delphi Automotive 96 83 Magneti Marelli 47 52 Lincoln 97 97 TVS Motor Company 48 43 Bentley 98 95 UD Trucks 49 13 Fiat 99 91 Lada 50 59 BAIC 100 New CIE

18. Brand Finance Auto 100 & Tyres 10 February 2017 Brand Finance Auto 100 & Tyres 10 February 2017 19. Understand Your Brand’s Value

Drivers of Change Brand Strength Index 2016 An ideal balanced scorecard of fundamental brand related measures Brand Value Dashboard Three key areas impact Brand Value (EURm) Brand Valuation Assumptions Effective BSI Weighting Attributes 18 131 Underlying economic assumptions used in valuation 34 $707m $882m $10,216m 6.25% Product: R&D expenditure, Widely recognised factors deployed by Brand Capital expenditure Strong brand (EUR) (EUR) Marketers to create brand loyalty and Brand [XXX] Brand Value Brand Value (EUR) Brand value (EURm) Investment Enterprise Value AA+ Investment 25% 6.25% Place: Website Ranking 729 729 Inputs market share. We therefore benchmark 78/100 616 616 650 6.25% People: Number of Employees, €650m €729m €9,399m Employee Growth brands against relevant input measures by Brand 25% Equity X 6.25% Promotion: Marketing expenditure sector against each of these factors. % = Historic brand value performance (EURm) Peer Group Comparison (USDm) $650 Brand Performance Forecast revenues $6,265 2015 Brand Strength Business Performance External Changes 2016 5.00% Familiarity 800 729 Weak brand $ $3,031 7.50% Consideration How do stakeholders feel about the brand 650 $2,328 $1,913 $707 700 607 7.50% Preference vs. competitors? Brand Strength Business Outlook Economic Outlook Customer 35% 7.50% Satisfaction 600 [XXX] [XXX]’s brand strength has increased compared to last year. Brands drive higher revenues. An investor would therefore All future returns are subject to risk. If the risk of not 7.50% Recommendation/NPS • Brand equity accounts for 50% to reflect Revenue Long Term Growth Rate Tax Rate Discount Rate 500 pay more for a brand that makes more money. receiving the forecast returns is higher (increasing the Brand the importance of stakeholder As the brand continues its sustainability drive, [XXX] has discount rate), the brand’s market is not growing as quickly Equity 5.00% Employee Score Licensing payments for the use of a After the explicit forecasts, the brand Forecasted royalties are reduced by Earnings in the future are worth less 320 Staff 5% perceptions to behaviour 400 Brand Value by Product Segment been improving across all CSR scores. It now has the [XXX]’s revenue base and the 5 year forecast growth have as expected (lower long term growth rate) or the tax rate in brand are derived from revenue. will continue to grow. However, it is the tax rate to reflect the actual than consumption now. This rate is 275 highest CSR scores it has had in the last four years across fallen this year, resulting in a loss of $177m USD to total the brand’s regions of operation is higher, then the brand’s 300 Increases or decreases in forecasted unlikely that the company will sustain amount that would be received by therefore used to reduce future 213 Environment, Employees and Governance. brand value. value is reduced and vice versa. 50% 2.50% Credit Rating • Brand Equity is important to all 37% Financial 5% revenue increase or decrease the extraordinary returns into the future the brand owner after tax. earnings to their value today. Nutrition 2.50% Analyst Recommendation stakeholder groups with customers being 200 The premium approach is also leading to significant margin However, it is important to note that this has arisen as a final valuation. so forecast industry growth rates are advantages – positively affecting “performance”. result of the company divesting a number of divisions. the most important 100 Performance Materials 1.67% Environment Score applied. 58% External 5% 1.67% Community Score 0 Other Activities 4% 1.67% Governance Score 2011 2012 2013 2014 2015 2016 2016 2015 2016 2015 2016 2015 5 year Compound Annual Growth Rate Long Term Growth Rate Tax Rate Discount Rate Brand 5 Year Forecast 6.25% Revenue (CAGR) 78 76 2.6% 3.4% Discount Rate 9.1% 8.6% Brand Strength Index Strength Growth Quantitative market, market share and 7% Brand 6.25% % Margin financial measures resulting from the Long Term Growth 3.2% 2.6% 2015 2014 2015 2014 2015 2014 2015 2014 Base Year 8,205 9,570 Performance Outputs 25% 6.25% % Forecast Margin Revenue (EURm) strength of the brand. 6.25% % Forecast Revenue Growth Tax 28.9% 30.2% 25% 2.6% 3.4% -0.8% 3.2% 2.6% +0.6% 29% 30% -1.3% 9.1% 8.6% +0.5%

Determining the Royalty Rate Brand Performance Brand Investment In order to apply the Brand Strength Index, a hypothetical royalty rate range needs to be set Competitor Royalty Rates An ideal balanced scorecard of fundamental brand related measures Proven inputs that drive the Brand Equity and financial results Following the OECD guidelines, Brand Finance sets the hypothetical brand royalty rate ranges by reference to three tests: Competitor royalty rates will be different based on different strengths of the brand, having Brand Strength Index Brand Strength Index different operating segments and company-specific long term affordability • Comparable Agreements: A search of comparable licensing agreements for brands in each industry is conducted every year. The margin analyses Brand Investment Brand Performance are then compared against the royalty rates found in these agreements to analyse the importance of brand in the industry and set an appropriate 1.2% average industry royalty rate. 10.0 1.0% 10.0 9.3 • Industry Margins: An analysis of 25% to 40% of margins, generally accepted as rules of thumb for licensing rates for all intangible assets in a 8.9 8.9 8.0 7.7 company. These rates are adjusted to take into account the importance of brand in a given industry. 8.0 8.1 0.8% 0.8% 0.8% 0.8% 6.4 6.0 • Affordability: Thirdly, an analysis of the brand’s specific royalties is conducted. If the brand has been able to sustain extraordinary profits over an 0.7% 6.0 5.3 0.6% extended time it is likely that hypothetical brand owners would be willing to pay closer to the company’s margins than the industry average. In the 0.6% 0.6% 0.6% 5.0 4.0 case of Brand Finance’s League Table models, affordability will be based on the forecast EBIT. 4.0 [XXX]DSM Best in Class Competitor Average 0.5% DSM[XXX] Best in Class Competitor Average 2.0 • Average industry royalty rate ranges can be seen below 2.0 0.0 High 0.0 Effective Effective Weighting 6.25% 6.25% 6.25% 6.25% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% Weighting 6.25% 6.25% 6.25% 6.25% DSM BASF Dow Du Pont Akzo Nobel Akzo Nobel Best in Best in Class [XXX] Du Pont Multiple Akzo Nobel Mid Class Akzo Nobel Dow Akzo Nobel Du Pont Product Place People Promotion [XXX] Revenue Margin % Forecast Revenue Growth % Forecast Margin % Low Relative quality of the brand’s investment in Relative quality of a brand’s distribution Relative quality of the human network Relative quality of the brand’s promotions. its products. The measure can include R&D network. It can include the quality of supporting the brand. This may include the Marketing investment, the quality of visual Akzo Nobel – Paints and spend and capital expenditure. logistical infrastructure available to the size of the support network, its likely future identity and the effectiveness of the [XXX] BASF Dow Du Pont Akzo Nobel - Corporate The brand’s ability to drive a The brand’s ability to drive a The brand’s ability to improve Coatings brand, the quality of its online presence, or growth or the investment in workforce brand’s social media is covered by this volume premium. Implied by price premium. Implied by business prospects across the number and quality of its retail outlets. training and human resources. measure. 78 78 80 80 82 82 current and future revenue. current and future margins. various KPIs

A Brand Value Report provides a complete + Internal understanding of brand Royalty Rates Trademark Audit breakdown of the assumptions, data + Brand value tracking sources and calculations used to arrive at Analysis of competitor royalty rates, industry Analysis of the current level of protection for the your brand’s value. Each report includes + Competitor benchmarking royalty rate ranges and margin analysis used to brands word marks and trademark iconography expert recommendations for growing brand + Historical brand value determine brand specific royalty rate. highlighting areas where the marks are in need value to drive business performance and offers a + Transfer pricing of protection. cost-effective way to gaining a better + Highlight unprotected marks understanding of your position against Brand Strength Index + Licensing/ franchising negotiation competitors. + Spot potential infringement A breakdown of how the brand performed on + International licensing + Trademark registration strategy A full report includes the following sections various metrics of brand strength, benchmarked + Competitor benchmarking which can also be purchased individually. against competitor brands in a balanced scorecard framework. Cost of Capital For more information regarding our League Table Reports, please contact: Brand Valuation Summary + Brand strength tracking A breakdown of the cost of capital calculation, + Brand strength analysis including risk free rates, brand debt risk Alex Haigh Overview of the brand valuation including Director of League Tables, Brand Finance executive summary, explanation of changes in + Management KPI’s premiums and the cost of equity through CAPM. brand value and historic and peer group + Competitor benchmarking + Independent view of cost of capital for internal [email protected] comparisons. valuations and project appraisal exercises +44 (0)207 389 9400

20. Brand Finance Auto 100 & Tyres 10 February 2017 Brand Finance Auto 100 & Tyres 10 February 2017 21. How we can help Contact details

1. Valuation: What are my intangible assets 2. Analytics: How can I improve marketing Contact us Our offices worth? effectiveness? Valuations may be conducted for technical purposes Analytical services help to uncover drivers of demand For brand value report and to set a baseline against which potential strategic and insights. Identifying the factors which drive enquiries, please contact: brand scenarios can be evaluated. consumer behaviour allow an understanding N 2. IO AN of how brands create bottom-line impact. Alex Haigh T A A L Director of League Tables U Y L T Brand Finance A I V C • Branded Business Valuation • Trademark Valuation [email protected] . S • Market Research Analytics • Brand Audits 1 • Intangible Asset Valuation • Brand Contribution Brand & • Brand Scorecard Tracking • Return on Marketing Investment

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Y T . 4 owners of branded businesses get a better deal modelling will identify the best opportunities, [email protected] by leveraging the value of their intangibles. ensuring resources are allocated to those activities which have the most impact on brand and business value. For all other enquiries, please contact: • M&A Due Diligence • Franchising & Licensing • Brand Governance • Brand Architecture & Portfolio Management [email protected] • Tax & Transfer Pricing • Expert Witness • Brand Transition • Brand Positioning & Extension +44 (0)20 7389 9400 For further information on Brand Finance®’s services and valuation experience, please contact your local representative: Country Contact Email address Australia Mark Crowe [email protected] Brazil Pedro Tavares [email protected] MARKETING FINANCE TAX LEGAL linkedin.com/company/ Canada Bill Ratcliffe [email protected] brand-finance China Scott Chen [email protected]

We help marketers to connect We provide financiers and We help brand owners and We help clients to enforce and Caribbean Nigel Cooper [email protected] their brands to business auditors with an independent fiscal authorities to understand exploit their intellectual East Africa Jawad Jaffer [email protected] performance by evaluating the assessment on all forms of the implications of different property rights by providing France Victoire Ruault [email protected] return on investment (ROI) of brand and intangible asset tax, transfer pricing and brand independent expert advice in- facebook.com/brandfinance Germany Dr. Holger Mühlbauer h.mü[email protected] brand based decisions and valuations. ownership arrangements. and outside of the courtroom. Greece Ioannis Lionis [email protected] strategies. Holland Marc Cloosterman [email protected] India Ajimon Francis [email protected] + Branded Business Valuation + Branded Business Valuation + Branded Business Valuation + Branded Business Valuation twitter.com/brandfinance Indonesia Jimmy Halim [email protected] + Brand Contribution + Brand Contribution + Brand Contribution + Brand Contribution Italy Massimo Pizzo [email protected] + Trademark Valuation + Trademark Valuation + Trademark Valuation + Trademark Valuation Malaysia Samir Dixit [email protected] + Intangible Asset Valuation + Intangible Asset Valuation + Intangible Asset Valuation + Intangible Asset Valuation Disclaimer + Brand Audit + Brand Audit + Brand Audit + Brand Audit Mexico Laurence Newell [email protected] Brand Finance has produced this study LatAm (exc. Brazil) Laurence Newell [email protected] + Market Research Analytics + Market Research Analytics + Market Research Analytics + Tax & Transfer Pricing with an independent and unbiased + Brand Scorecard Tracking + Brand Scorecard Tracking + Franchising & Licensing + Expert Witness analysis. The values derived and Middle East Andrew Campbell [email protected] opinions produced in this study are Nigeria Babatunde Odumeru [email protected] + Return on Marketing + Return on Marketing + Tax & Transfer Pricing based only on publicly available Investment Investment + Expert Witness information and certain assumptions Portugal Pedro Tavares [email protected] + Brand Transition + Brand Transition that Brand Finance used where such Russia Alexander Eremenko [email protected] data was deficient or unclear . Brand + Brand Governance + Brand Governance Finance accepts no responsibility and Scandinavia Alexander Todoran [email protected] + Brand Architecture & + Brand Architecture & will not be liable in the event that the Singapore Samir Dixit [email protected] Portfolio Management Portfolio Management publicly available information relied upon is subsequently found to be South Africa Jeremy Sampson [email protected] + Brand Positioning & + Brand Positioning & inaccurate. Spain Lorena Jorge Ramirez [email protected] Extension Extension Sri Lanka Ruchi Gunewardene [email protected] + Franchising & Licensing + Mergers, Acquisitions and The opinions and financial analysis expressed in the report are not to be Switzerland Victoire Ruault [email protected] Finance Raising Due construed as providing investment or Diligence business advice. Brand Finance does Turkey Muhterem Ilgüner [email protected] not intend the report to be relied upon UK Alex Haigh [email protected] + Franchising & Licensing for any reason and excludes all liability + Tax & Transfer Pricing to any body, government or USA Anne Bahr-Thompson [email protected] + Expert Witness organisation. Vietnam Lai Tien Manh [email protected]

22. Brand Finance Auto 100 & Tyres 10 February 2017 Brand Finance Auto 100 & Tyres 10 February 2017 23. Contact us.

The World’s Leading Independent Branded Business Valuation and Strategy Consultancy T: +44 (0)20 7839 9400 E: [email protected] www.brandfinance.com

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