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Toyota Named Most Valuable Car Brand

Douglas A. McIntyre

Toyota Motor Corp. (TM) has been named the world's most valuable car brand. Immediately behind it are three German brands: BMW, Volkswagen and Mercedes-Benz. No American brand made it into the top six, and only Ford Motor Co. (NYSE: F) was in the top ten. These are the conclusions of a new study by Brand Finance, a U.K.-based research firm.

In its "Brand Finance Auto 100-2014," Toyota's brand value is far ahead of any other brand, at $34.9 billion. BMW's is second at $29 billion, followed by VW's $27.1 billion.

It might be expected that Toyota and VW would make the list. Toyota is the world's largest car company by sales, and VW is third. These two brands are available in virtually every nation in the world, which is also true of Mercedes-Benz and BMW. The same can be said of Honda Motor Co. Ltd. (HMC) and Nissan, which are sixth and seventh on the list.

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American car brands may have done poorly because they have most of their sales within the United States. This is true of General Motors Co.'s (GM) Chevrolet, which is the highest rated American nameplate after Ford. Chevy sits in the number 13 spot with a brand value of $6.4 billion, just behind VW luxury brand Audi.

Rounding out the top ten of the Brand Finance study are Porsche, Hyundai and Renault. That means that, among these top ten, three are luxury brands. Based on the methodology, this makes sense:

Brand Finance calculates brand value using the Royalty Relief methodology which determines the value a company would be willing to pay to license its brand as if it did not own it. This approach involves estimating the future revenue attributable to a brand and calculating a royalty rate that would be charged for the use of the brand.

Presumably vehicles with higher prices should do better in this sort of calculation.

Many American brands may never do well on the list, probably because their global sales are modest and will continue to be. This includes Jeep in the number 37 spot with a brand value of only $2.5 billion, Lincoln in the number 39 spot with a value of $2.4 billion and Dodge in the number 41 spot at $2.3 billion.

The lowest ranked American brand is Pontiac at $1.3 billion. Of course, the GM brand was discontinued several years ago, which is a very good the reason for it to be relegated to that position.

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