How important is brand value in the car industry?

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I ask the question because the market research firm Millward Brown has just released its annual brand equity report called the “BrandZ Top 100 Most Valuable Global Brands.” In it, the biggest companies in the world are ranked according to their so-called brand value. So first, a definition: What exactly is brand value?

For me, brand value is the sum of prestige, desirability and trustworthiness resulting from a company’s past performance in several areas: product quality, professionalism, customer service and corporate social responsibility. A company that excels in these departments may be considered as having a strong brand, while one that flounders in them is seen as having a weak brand.

Someone explained brand value this way: It is a company’s ability to charge customers a premium for its products or services. In this sense, I guess you may also swap “brand” with “reputation.” If your company enjoys a spotless reputation, you’re able to sell most anything to people — perhaps even the San Juanico Bridge. If your reputation sucks, you get jeered at every time you announce a product launch — nobody wants to touch your merchandise with a 10-foot pole and a pair of industrial gloves. It’s how Apple, for instance, can get away with insanely priced gadgets whose specs and features are virtually the same as (if not inferior to) those made by less esteemed rivals.

Brand value is the shine — the X factor — that makes consumers want to purchase an item or avail of a service regardless of the asking price.

So, going back to the above-mentioned brand equity report, the leading global brands today are mostly in the digital tech industry, the top 10 being Google, Apple, Amazon, Microsoft, Tencent, Facebook, Visa, McDonald’s, Alibaba Group and AT&T. In the top 100, only five automakers made it to the list: Toyota (No. 36), Mercedes-Benz (No. 46), BMW (No. 47), Ford (No. 96) and Honda (No. 97). Outside of the top 100 and making up the top 10 in the automotive category, we have Nissan, Audi, Tesla, Maruti Suzuki and Volkswagen.


A reason car assemblers aren’t exactly on pedestals in most people’s minds could be the backlash against motor vehicles in the areas of environment protection and traffic congestion. Many young individuals actually associate cars with other societal evils.

One of my online readers wondered how certain car brands could make the cut when they were notorious for poor after-sales service in our market. But the ranking is a global one and not just Philippine-based. Besides, as I already pointed out, brand value isn’t just the result of product quality or customer service. A company that produces mediocre cars but heavily invests in feel-good CSR campaigns can maintain a fairly reputable brand — while a firm that admirably (and consistently) creates excellent vehicles but is run by misogynist douchebags may see its stocks diving after a former female employee exposes a sexual-harassment incident.

The tricky thing about brand value is that it mostly hinges on market perception. It’s basically an organization’s public image, so it could get pretty arbitrary. A classic example is how my father still looks down on Japanese car brands to this day. To him, Toyota and company are still the same unreliable manufacturers he knew from his youth — and that American vehicles are still far better than Japanese ones. Which explains why he almost puked when I tried to convince him to get a Camry or a CR-V instead of a very impractical (for his age and needs) Mustang. That’s what brand value does for you: Sometimes it changes; at other times it’s for life.

I think brand value is most crucial in the car business, considering the kind of money a customer needs to pay in order to own a product. When a shopper is deciding on a purchase, all the stories he or she has heard about the brand come into play. If these stories are pleasant, writing that check becomes a much easier hurdle; if they’re appalling, they tend to be a deal-breaker.

So the next time you look at car sales charts, keep in mind that the numbers aren’t necessarily the exclusive consequence of exterior styling, specs, technology and pricing. They could also be the by-product of branding.