Toyota holds off BMW to remain most valuable car brand; Tesla rises to No. 8

Toyota defended its title as the world's most valuable car brand in a new ranking, holding off BMW and Mercedes-Benz. Tesla, meanwhile, made the biggest improvement, rising two spots to No. 8 because of a 32 percent increase in its brand value.

Toyota's brand value decreased 3 percent to $28.7 billion as increased sales were offset by tough currency challenges as well as increased investment and rising labor costs, according to the BrandZ Top 100 Most Valuable Global Brands study released by market researcher Kantar Millward Brown.

"Toyota is seen as a reliable, quality value brand," Peter Walshe, Global BrandZ director at Kantar Millward Brown, told Automotive News Europe. "Even when it was going through its recall problems, the users were saying, ‘What’s all the fuss about, my car is fine.’ Toyota has delivered great value for years."

Toyota has been No. 1 in 10 of the 12 years the study has been conducted.

Telsa passes Porsche, Land Rover

Tesla, which increased its brand value 32 percent to $5.9 billion, overtook Land Rover and Porsche to jump to No. 8 in this year's ranking from No. 10 last year among automotive brands.

“The Tesla story is interesting because it is not just the cars it offers now, it is the promise for the future," Walshe said. “There is a perception that it offers a fantastic brand experience, even among non-owners. The only other brands that I’ve seen have this kind of appeal before they got into mass market were Apple and Facebook."

Land Rover slipped to a spot to No. 9 despite increasing its brand value 17 percent to $5.5 billion. "Land Rover is doing incredibly well in all its main markets because of the growing appetite for SUVs. They have taken advantage of that," Walshe said.

Boosted by driveability

BMW remained in second place despite its brand value decreasing 8 percent to $24.6 billion. The decrease was partially due to rising investment costs for new technologies and a sales slowdown in the U.S. Despite the slight dip, the German automaker continued to win over customers in two key areas.

"BMW is really making money from its position as a leader in the luxury niche. It’s doing so because of different reasons. One is its consistency in delivering great driveability and another is with the its innovation," Walshe said. "As the saying goes, the proof of the pudding is in the eating and when you come to dine on BMW it’s a fabulous taste."

Mercedes' value increased by 4 percent to $23.5 billion, which helped it retain the No. 3 spot. The company's record unit sales, revenue and net profit in 2016 played a big role in boosting its brand value as did a restructuring of its company-owned dealer network.

The total value of the Top 10 car brands dipped to $139.2 billion from $139.9 billion in 2016. A reason for that is automakers are investing billions in to develop solutions to the many challenges they face including new forms of ownership and greater connectivity of their vehicles.

"Automotive brands in the top 10 are worth 6 percent less than they were when we started our study 12 years ago, but those brands have investment 100 to 200 percent more into technology," Walshe said. "The brands that have done best are those that have adapted to their consumers."

He says the industry is at a crossroads. "If you speak to the automakers, they are constantly looking for way to create collaborations to adapt to this new world. This is why BMW and Nissan are working with Microsoft on a connected vehicle platform and Ford and BMW are working with Amazon on cloud-based voice services."

Google stays No. 1

When it comes to the ranking of all brands, Google retained the No. 1 spot. Google's brand value rose 7 percent to $245.6 billion. (Download a PDF of the 2017 BrandZ Top 100 Most Valuable Brands, below.)

Apple held on to the No. 2 spot because of a 3 percent rise in brand value to $234.7 billion. Microsoft rounded out the global top three with an 18 percent rise in brand value to $143.2 billion.

The BrandZ Top 100 Most Valuable Global Brands was developed by Kantar Millward Brown. The study combines measures of brand equity based on interviews with more than 3 million consumers globally using data from Bloomberg and Kantar Worldpanel.