Mercedes’ goal to become world’s biggest luxury-car maker fades away as Daimler investors value the company at half what BMW is worth.
BMW saw its market capitalization increase to 45 billion euro ($58.8 billion), compared with 42.2 billion for Daimler. Without the reasonable price for Daimler’s truck business, the value that investors give to Mercedes is about 25 billion euro.
“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.”
The slow growth in China and the slow expansion into more popular segments, have affected Mercedes’ sales, giving BMW and Audi the opportunity to widen their sales lead in the auto luxury segment. Mercedes’ Chief Executive Officer Dieter Zetsche, whose current contract expires at the end of 2013, failed to achieve his goal of selling 2.6 million vehicles by the end of the decade and bringing the automaker back on the first place, which it lost in 2005.
“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.”