Daimler AG (DAI) investors value Mercedes- Benz at half what Bayerische Motoren Werke AG (BMW) is worth as Chief
BMW’s market capitalization has surged to 45 billion euros ($58.8 billion), versus 42.2 billion for Daimler. Subtract a reasonable price for Daimler’s truck business -- the world’s biggest -- and the value investors assign to Mercedes stands at about 25 billion euros.

“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.”
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 Mercedes, allowing BMW and Volkswagen AG (VOW)’s Audi 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.
The push has gotten off to a rocky start. Zetsche postponed a longstanding Mercedes profit goal in October, putting the target at least four years behind its original schedule. After earnings slumped this year, Mercedes initiated a drive to cut costs by 2 billion euros by 2014 under a program dubbed “Fit for Leadership.”

BMW Bid
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. Today, assuming a price of roughly 20 billion euros for its truck business based on comparisons with rival truckmaker Volvo AB (VOLVB), investors value Mercedes at 22 billion euros, or less than half BMW’s worth, according to Bernstein Research.

“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.”

Brazil Factory
Unruffled by the debt crisis in Europe, BMW continues to expand, planning a new factory inBrazil and readying models for 2013 like the 4-Series coupe and the electric-powered i3 city car. Through November of this year, BMW sold 1.39 million vehicles versus 1.19 million for Mercedes, widening its lead to 193,400 cars for the period from 115,700 a year earlier.
BMW booked 6.41 billion euros in operating profit for the first nine months of 2012, 112 million euros more than Daimler even though revenue for the Mercedes parent was 28.2 billion euros -- 50 percent -- higher.

[b]“BMW earns more with just cars than Daimler does with cars and trucks,” [/b]said Juergen Meyer, a portfolio manager at SEB Asset Management in Frankfurt, whose fund owns shares in both automakers. “For us investors, profit counts.”

Since Zetsche took over as CEO in 2006, Daimler shares have slipped about 10 percent while BMW’s have surged 89 percent. BMW, based in Munich, trades at 9.1 times next year’s earnings, versus 8.3 times for Daimler, based in Stuttgart, Germany.

Automaking Roots
About 68 percent of analysts rating BMW recommend buying its shares, compared with 40 percent for Daimler, according to data compiled by Bloomberg. The average price target for BMW stock is 75.70 euros, 6.9 percent more than yesterday’s closing price, while Daimler is seen as having potential to rise 3.1 percent over the next 12 months to 40.88 euros.

Daimler is moving to catch up. Next year, it will overhaul the Mercedes S-Class flagship and introduce the CLA compact four-door coupe to attract entry-level drivers. The manufacturer pressed ahead with an exit from European Aeronautic, Defence & Space Co. (EAD), the parent of plane manufacturer Airbus, as part of Zetsche’s efforts to focus Daimler on its automaking roots. It is also deepening cooperation with Renault SA (RNO) to cut costs.

“We have very clear strategies for all our divisions focused on both growth and efficiency,” said Florian Martens, a spokesman for Daimler.

To revive growth in China, where Mercedes has lagged BMW and Audi, Daimler this week appointed Hubertus Troska to a new management board position to oversee operations in the world’s largest car market. As part of the effort, Daimler is combining two separate sales units -- one for imported vehicles and another for locally made cars -- into a single entity.
Audi, the luxury-car leader in China, can draw on Volkswagen’s resources in the country to expand. And BMW opened a new factory in Tiexi as part of a plan to quadruple production to as many as 400,000 vehicles in the country.

Nonetheless, the potential of the Mercedes brand in China is “ overwhelming,” said Yale Zhang, managing director of consultancy Automotive Foresight in Shanghai. “Every consumer understands the value of Mercedes and the logo.”

http://www.bloomberg.com/news/2012-12-14/mercedes-valued-at-half-of-bmw-as-zetsche-loses-investors-cars.html

Not surprised at all! Mercedes needs a leader with strategic vision.

Try fixing your Benz by yourself and you'll figure out what the problem with DB is.

DB runs on the dealership visits which is not cheap or readily available, but BMW has more user friendly network.

Benz is your daddy's car.

BMW and Caddy have been able to attrac a new generation(just look at number of drivers under 30 driving a BMW,MB,or Caddy)

Interesting post...there's one issue here; are these figures for Bmw group (which comprises of bmw,mini & rolls royce) or bmw's core car division? MB should be willing to take more risks with their designs- like they did with the original CLS, besides their retro-themed dash layout of the W204 C-class and W212 E-class could be better. And finally, those folks should ditch their steering-column-mounted transmission stalks and replace em with gearshifters traditionally mounted along the transmission tunnel.

Well I think the A-Class is the new kid on the block,and can be described as the first of the new breed of Benz products.When it comes to aesthetic designs of cars;Benz over the years have been way too conservative and the figures are telling it all.I am just folding my hands in wait of the new C-Class and E-Class eventual re-design.The recent E-class face-lift is quite applaudable.Another area Benz should look into is platforms sharing to cut cost,they might need to buy companies and cut down on all their tiny tiny mergers all over the place.I think they are big enough to comfortably do that.

MB is actually moving in the right direction but they're more of a follower than a leader! The E class, M class, and GL all got better but that's way after they were initially bungled especially the M class. I think they’ve also realized that they're no longer the preferred brand because some of their newer vehicles actually got cheaper when compared to the older ones that got replaced.

It is getting really hard to see a segment which MB will emerge as the preferred class leader.
C class is too plasticky when compared to 3 series and Audi A4. I really like the CLS63 but would rather own F10 M5. I also like the SLS but would prefer to own a lambo for the asking price. GL is about the only class which they shine because no other premium brand has a full size 7 seater SUV.

Wallie: MB is actually moving in the right direction but they're more of a follower than a leader! The E class, M class, and GL all got better but that's way after they were initially bungled especially the M class. I think they’ve also realized that they're no longer the preferred brand because some of their newer vehicles actually got cheaper when compared to the older ones that got replaced.

It is getting really hard to see a segment which MB will emerge as the preferred class leader.
C class is too plasticky when compared to 3 series and Audi A4. I really like the CLS63 but would rather own F10 M5. I also like the SLS but would prefer to own a lambo for the asking price. GL is about the only class which they shine because no other premium brand has a full size 7 seater SUV.

My only problem with the F10 bmw m5 is the fake V8 sound. MB has a leader in the full size luxury car segment-the S class, it has always been the leader of the pack.

I hear you about the fake sound but the only reason we knew about it was because they told us. By the way, they're not the only people doing it. I think Porsche is doing the same thing also. I actually think the fake sound was needed due to the great insulation provided by the cabin.

S Class is for 70 year olds.

Wallie: I hear you about the fake sound but the only reason we knew about it was because they told us. By the way, they're not the only people doing it. I think Porsche is doing the same thing also. I actually think the fake sound was needed due to the great insulation provided by the cabin.

S Class is for 70 year olds.

nah, s class is among the best super sedan out there, its in the same league as the 7 series...i adore the S63 amg...i thought there was the s65 amg idk...
As to the topic, no suprise. Saw an analysis on CNN sometime mid year with sales articulated in favour of BMW. Driving a bmw alone is a pleasure for me, Cant speak much for the recent Mercs cos i haven't driven them. A BMW is for the young-at-heart...

Wallie: I hear you about the fake sound but the only reason we knew about it was because they told us. By the way, they're not the only people doing it. I think Porsche is doing the same thing also. I actually think the fake sound was needed due to the great insulation provided by the cabin.

S Class is for 70 year olds.

*tongue out* the S-class is still the king. The twin-turbo V12 S65 A.M.G will have ur beloved Bmw 760i for
Lunch!

platinumricky:
*tongue out* the S-class is still the king. The twin-turbo V12 S65 A.M.G will have ur beloved Bmw 760i for
Lunch!

nah ricky, it would be better like this, s65 amg vs.... ..... .....alpina B7

Not to burst your flagship preference here, but for most manufacturers there is/are models that determines the strength of a brand the more of those models you sell the better your brand looks.
BMW sells a lot more 3-series than C-class 5-series and E-class should be close, but if BMW has couple of problem with their bread and butter it will be bad. The fact the BMW owns other profitable brands like the Mini helps.

Cadillac was focused on big Luxurious cars and lost money,but since they started selling the CTS there has been increase in brand value. Now they just came out with a 4cyl ATS meant to competes with the likes (4cyl luxs; TSX,3-series etc)
I think if MB can reduced cost of ownership(i.e service, depreciation)

sultaan: Not to burst your flagship preference here, but for most manufacturers there is/are models that determines the strength of a brand the more of those models you sell the better your brand looks.
BMW sells a lot more 3-series than C-class 5-series and E-class should be close, but if BMW has couple of problem with their bread and butter it will be bad. The fact the BMW owns other profitable brands like the Mini helps.

Cadillac was focused on big Luxurious cars and lost money,but since they started selling the CTS there has been increase in brand value. Now they just came out with a 4cyl ATS meant to competes with the likes (4cyl luxs; TSX,3-series etc)
I think if MB can reduced cost of ownership(i.e service, depreciation)

I am perfectly aware of the whole 'bread and butter' vehicles of each brand. The 3series is a model that bmw can't afford to get wrong- the profit margins of models like these help in the Я & D of flagship models like the 7series. Without the profit from camrys and corollas, lexus wouldn't hv been able to embark on halo cars like the V10 LFA. Aston martin has been modifying their archaic ford-based V12s for a decade plus now becuz they lack the resources to build a new unit...besides their VH platform (shared with the jaguar XK) which underpins almost all their models frm the DB9 to the rapide saloon is in need of a total makeover to reduce its curb weight..i hope their intention to share AMG engines/gearboxes and technology with the help of their new investor works out eventually.

yungboss:
nah ricky, it would be better like this, s65 amg vs.... ..... .....alpina B7

A S65 AMG vs Alpina B7 drag race will be so unfair! The S63 AMG is the logical rival of that particular brute. The S65 will be an overkill. U̶̲̥̅̊ Я obviously a Bmw fanboy...am a fan of the 3point star.

.

platinumricky:

A S65 AMG vs Alpina B7 drag race will be so unfair! The S63 AMG is the logical rival of that particular brute. The S65 will be an overkill. U̶̲̥̅̊ Я obviously a Bmw fanboy...am a fan of the 3point star.

lol, not really a fanboy, i also love the Merc, but maybe not equally as the bmw. I know that s65 is an evil beast and its lightning fast...
Could you recall a Topgear episode, where the S63 amg was pitted against bmw's 760li,the s63 amg, driven by the stig, was killed by the 760li.
The Alpina is a 4.4l twin-turbo v8, so not really a match...
Mercedes' AMG load up enormous horsepower in their cars, as compared to BMW's Motorsports, hence AMG's edge in favour of straight line acceleration.
What's the 0-60 on the S65? That beast is rarer than the s63.