Photo: Mercedes-Benz
Starting today, February 1, 2022, Daimler AG will officially be known as Mercedes-Benz Group AG, a move that CEO Ola Kallenius hopes will give his company a much-needed shareholder valuation boost, to the point where it could one day catch up with the likes of Tesla and Lucid Motors.
This change is the latest in a string of similar reshuffles for the German brand, after it had already announced the spin-off of its truck and bus division roughly a year ago.
The company started off as Daimler-Benz AG back in 1926, although the Mercedes brand (named after the daughter of an automobile entrepreneur who worked with Daimler) was trademarked a lot earlier, in 1902.
“We have a real chance to raise the multiple,” said CEO Ola Kallenius during a recent interview, without naming a specific target valuation for his company, which is now worth just under 77 billion euros ($85.7 billion), as per Reuters.
According to industry analysts, even a massive premium carmaker like Mercedes-Benz can only grow so much – given the relatively small size of the luxury market. This is why a strategic shift is necessary to the point where investors start seeing the German brand as an EV manufacturer and tech giant.
“Investors could start viewing Mercedes as a Lucid Motors or Tesla type and start to give it an EV multiple,” said Tom Narayan, a European auto analyst with RBC Capital Markets. “But Lucid and Tesla get to start at 100% EV. For Mercedes you have to convert your existing ICE business to EVs. That may be a limitation on how far the multiple could go near-term.”
Meanwhile, Daniel Schwarz, a management director at Stifel, stated that such valuations reflect the belief that German brands had to go on the defensive so as to protect their market share from the likes of Tesla.
“Tesla’s valuation is based on the assumption that Tesla will win market share from German manufacturers, who don’t have a comparable revenue growth potential,” he said.
The company started off as Daimler-Benz AG back in 1926, although the Mercedes brand (named after the daughter of an automobile entrepreneur who worked with Daimler) was trademarked a lot earlier, in 1902.
“We have a real chance to raise the multiple,” said CEO Ola Kallenius during a recent interview, without naming a specific target valuation for his company, which is now worth just under 77 billion euros ($85.7 billion), as per Reuters.
According to industry analysts, even a massive premium carmaker like Mercedes-Benz can only grow so much – given the relatively small size of the luxury market. This is why a strategic shift is necessary to the point where investors start seeing the German brand as an EV manufacturer and tech giant.
“Investors could start viewing Mercedes as a Lucid Motors or Tesla type and start to give it an EV multiple,” said Tom Narayan, a European auto analyst with RBC Capital Markets. “But Lucid and Tesla get to start at 100% EV. For Mercedes you have to convert your existing ICE business to EVs. That may be a limitation on how far the multiple could go near-term.”
Meanwhile, Daniel Schwarz, a management director at Stifel, stated that such valuations reflect the belief that German brands had to go on the defensive so as to protect their market share from the likes of Tesla.
“Tesla’s valuation is based on the assumption that Tesla will win market share from German manufacturers, who don’t have a comparable revenue growth potential,” he said.
Google News