When considering the worth of a car company, several factors come into play. As the industry and consumer tastes continue to evolve, the dynamics of worth and success also change. Although there is no one metric used to determine a car company’s worth and financial viability, there are several indicators to consider. Investors, consumers, and experts in the industry look at past and present sales performances, current financial obligations, upcoming new releases, and trends in consumer preferences.
Currently, Toyota is widely considered the world’s largest automotive manufacturer and the company is worth about $245 billion. Toyota has always been a leader in innovation and has remained the top car manufacturer globally since the early 2000s. Indeed, in 2019, Toyota sold almost 9.9 million cars, which was a 1.2% growth compared to the previous year. With a large portfolio of models, the company caters to a variety of needs, whether that is for a family vehicle, a luxury car, or a more efficient alternative.
The second-biggest automotive giant is Volkswagen, which has a current market worth of $130 billion. The Volkswagen Group is made up of several car brands and it has several of its own car models, such as the iconic Beetle, the Golf and the Jetta. In 2019, the Volkswagen Group produced almost 11 million cars, making it the best-selling car manufacturer for the year.
The company that is third in terms of worth is Daimler, the parent company of Mercedes-Benz, who is worth around $90 billion. Mercedes-Benz is one of the most iconic brands in the automotive world and a symbol of luxury vehicles. It is most notably known for its luxury sedan line-up and SUVs. In 2019, the company sold almost 2.3 million cars, indicating roughly 3% growth compared to the previous year.
Rounding up the top five car companies in terms of worth are Honda and BMW. Honda is worth approximately $72 billion and BMW is worth around $69 billion. Both companies have a wide variety of models and their success is largely due to their reliable cars, with BMW known for its precision engineering. In 2019, Honda produced 5.5 million cars, while BMW sold 2.5 million cars.
Analyzing the numbers, it can be observed that Toyota is the most valuable car company, followed by Volkswagen and Daimler. Despite being one of the few companies to post growth in the last year, Honda and BMW remain well behind the others in terms of worth. This could be an indication that Toyota, Volkswagen and Daimler have their foot firmly placed in the door when it comes to succeeding in the automotive market.
Emerging Markets
As the automotive industry increasingly moves towards electric vehicles, many companies are also investing in emerging markets, such as India, where the demand for cars is steadily increasing. This is an area where larger companies such as Volkswagen, Toyota, and Daimler are investing heavily and could have a significant impact on their future worth.
India is already the world’s third largest car market and it is estimated that the demand for cars will only continue to grow. Already, Volkswagen and Tata are leading the way in the Indian market, with Volkswagen making larger investments in the country in recent years. With companies such as Tata finding success in India, there is room for the leading car companies to capitalize on the market in the future.
The cars available in India tend to be more economical and tailored to fit the local market. For example, Maruti Suzuki, a subsidiary of Suzuki limited, offers both petrol and diesel cars and has been very successful in the Indian market. Companies like Tesla are also investing in the Indian market to offer its electric cars, which could further boost Tesla’s worth if it’s successful.
Consumer Preferences
Another factor to consider when looking at the worth of a car company is consumer preferences. The rising interest in electric vehicles, for instance, is playing a key role in the industry’s move away from gas-powered cars. Despite the initial cost of electric vehicles, consumers have been increasingly drawn to the ease and convenience of electric cars, which is having an impact on the automotive market in the long-term.
The emerging popularity of ride-sharing services, such as Uber and Lyft, is also having an impact on the worth of car companies as more consumers have been opting for these services instead of owning their own vehicles. This is an area where car manufacturers, such as BMW and Volkswagen, are looking to capitalize and are investing in their own ride-sharing services, such as VW’s Moia or BMW’s ReachNow, to keep up with the trend.
The growth in car subscription services has been another factor affecting consumer preferences. This is an area where companies such as Volvo, Porsche, and Lexus have found success by offering monthly subscriptions that provide access to a fleet of cars. This has been particularly successful with Millennials and Generation Z who are eager to experience different vehicle models without the long-term commitment of buying a car.
Production Disruptions
The COVID-19 pandemic has been one of the most disruptive events the industry has ever faced, with production and sales being adversely affected. Car companies have had to adjust their strategies and focus more on digital marketing and e-commerce, as well as on providing an enhanced customer experience. Companies such as BMW, Ford, and Volkswagen have also shifted their focus to producing ventilators and other medical-related equipment, which has allowed them to remain competitive in an uncertain economy.
The pandemic has put a strain on all companies, forcing them to cut costs, reduce their workforce and rethink their plans for the future. However, companies such as Tesla and Toyota have been the exception, and have been able to weather the pandemic with the help of their strong balance sheets and innovative strategies. Tesla, in particular, has seen a surge in stock prices to become the most valuable car company in the world and is worth around $415 billion.
Environmental Impact
The environmental impact of cars is also an important factor to consider when looking at the worth of a car company. Companies such as Volkswagen have made a commitment to reduce their carbon emissions and have already set targets for the years ahead. With more and more countries committing to electric vehicles, companies like Volkswagen will be able to capitalize on the consumer demand for eco-friendly vehicles. Additionally, the company’s commitment to reduce its emissions will help boost its stock prices and its worth.
Toyota is another company that has been making strides to reduce its emissions and impact on the environment. The company has invested heavily in its hybrid and electric vehicle line-up and has partnered with several companies, such as Panasonic and DENSO, to develop and manufacture batteries. Toyota is confident that it will produce over 10 million electrified vehicles by 2030 and this could have a positive impact on their worth.
Efficient Technology
The advancements in technology have also been a major factor in the success of car companies. Companies such as Hyundai and Mercedes are making strides in the autonomous vehicle space, while Volkswagen has been investing heavily in its electric vehicle technology. Tesla has been leading the way in both autonomous vehicles and electric vehicles but is being closely followed by other companies. Additionally, companies such as BMW, Volkswagen and Ford have been investing heavily in connected vehicle technology, which will allow them to capitalize on the growth of the connected car market.
As the automotive industry continues to evolve, so does the worth of the car companies that dominate the market. Despite uncertain economic conditions and the pandemic, car companies have been able to remain competitive by focusing on consumers’ needs and by investing in promising technologies. As the industry turns towards electric vehicles, autonomous vehicles, and connected vehicles, car companies that are able to capitalize on emerging markets and technologies will be likely to remain the biggest and most valuable car companies worldwide.
