Mercedes Beats Audi and Approaches BMW
Mercedes is already the second world´s largest maker of luxury cars. In the first eight months of 2015, the German manufacturer has sold more vehicles than its closest competitor, although it remained below BMW.
Mercedes regains the second place four years later after losing against the subsidiary of the Volkswagen group. Between January and August it has delivered 1.19 million vehicles, almost 11,000 more than Audi. The key to overcoming Audi has been China. While his great rival has crashed in the Asian giant, Mercedes was one of only three car makers that have been able to increase sales in August, after the collapse of July. Meanwhile, BMW has sold 1.21 million vehicles, 20,000 more than Mercedes. Models of the middle class C and SUVs have been those who have worked best within Mercedes´ range.
This second place is a milestone in the career of Mercedes to become the top luxury car maker again after losing the position a decade ago. In 2005, BMW surpassed its German competitor for the first time and it has been able to stay on top of the standings ever since. However, Mercedes decided to put all eggs in one basket in February 2013 to regain the lost glory.The key to the process was the renewal of the company´s range of vehicles, as it had been clearly out of step with its competitors.
Mercedes introduced the CLA Class, the completely renovated Class S, its best-selling model, the C-Class was also improved and ii has been even daring with a compact SUV, the GLA, to compete with the Audi Q3 and BMW X1. This sales increase has a good reflection on its latest results. Revenues were €71.7 billion in the first half, up 18% from a year earlier. EBIT grew 36% and net profit improved 35% to €4.42 billion.
The key objective of Mercedes, regain the world´s 1st ranking in 2020, it seems a little closer. For now, his development has been applauded by the market. Its market value has more than tripled between late 2011 and March 2015, when reached a market capitalization of nearly €100 billion. From these records, as a result of market conditions, the market value has fallen by 20%, to around €75 per share. In any case, a PER of 9.8 times with the current pace of earnings growth looks rather attractive. The average rating of its shares would exceed 95 euros per share, which gives it an interesting potential for appreciation.