BMW, the world’s largest luxury automaker has long been the favorite of investors as well, but Mercedes-Benz latest strategy looks to threaten its rival in this business field as well.
The Daimler brand is increasingly popular among the investors because of its new strategy, bigger range of models and the increased efficiency in making them. That said, Mercedes, alongside BMW and Audi are also prone to criticism because of the need to fall within the new EU CO2 limit regulation by the start of the next decade and also due to the fact that all three seem desperate to win the sales race, not the profitability championship.
Among those saying Mercedes is the best stock to own are investment banker J.P.Morgan- which contends the new product range, spanning from the A and CLA Class compacts to the range topping S-Class, and the efficient manufacturing process would boost earnings soon.
“We expect Mercedes-Benz margins will expand throughout 2014 on higher second half cost savings, while BMW margins might stabilize, at best, due to higher savings on costs in the second half of 2014,” said J.P.Morgan analyst Jose Asumendi.
There are others who still consider BMW on top, like Barclays Equity Research or International Strategy and Investment, but in absolute terms they all bemoan the sales war between them, which led to a lack of pricing discipline that ultimately cost them billions of euros in recent years.