Case Study: BMW

Market watchers say that the definition of luxury is becoming increasingly blurred. In the past, exclusivity may have been one attribute associated with a luxury brand, but this was largely the consequence of an expensive price tag.

What is critical, experts say, is protecting a brand’s equity, which remains one of the most important assets for German premium carmakers. Mercedes and BMW are estimated to be the second and third most valuable car brands in the world after Toyota. Millward Brown, a leading market research firm that publishes annual rankings, estimates that BMW is worth $26.3 billion and Mercedes is worth $21.8 billion.

If either of these figures reflected in the brands’ accounts, it would dwarf any other individual asset. (Per International Financial Reporting Standards, brands are only recognized on the balance sheet in the event of a disposal, since the value can easily be determined via the goodwill embedded in an

The operating return on sales was impacted by special items especially about the diesel issue. Before special items, Audi achieved its strategic target with an operating return on sales of 8.2 percent. At the same time, they also invested in the ongoing expansion of their model and technology portfolio and in their international manufacturing structures in the 2016 fiscal year.

(d) Strategy to achieve the objectives;

The main targets of Audi strategy for 2025 are urbanization, sustainability and digitalization. They are digitalizing their processes and creating a platform for integrated, connected premium mobility and digital services. They stand for sustainability in their vehicles and services throughout the entire value chain. By working together with cities worldwide they ensure access to individual, city-friendly premium mobility.

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Gonzalo Llorden de Paz BBA BIR B April 2017

5.