New report from Brand Finance reveals that nearly half of the fastest-growing tyre brands globally are Chinese
5th June 2024, LONDON - For the seventh consecutive year, Michelin has secured its position as the world’s most valuable tyre brand, with a brand value of USD 7.9 billion, according to new data from Brand Finance, the world’s leading brand valuation consultancy. The French brand's value has remained stable year-on-year, despite various factors impacting the market and performance, including declining sales within the road transportation segment and reduced replacement market unit sales.
This year, Michelin is also the world’s strongest tyre brand, achieving a Brand Strength Index (BSI) score of 85.6 out of 100. Despite a 2.5-point decline in its BSI score, mainly due to a dip in forecasted revenue, Brand Finance research indicates that Michelin excels in Familiarity and Recommendation. In its home market, Michelin also commands the highest price acceptance.
Bridgestone and Continental Tires have secured the 2nd and 3rd positions in the ranking, respectively, following an 8% and 13% increase in brand value. Bridgestone’s brand value has risen to USD 7.6 billion, narrowing the gap to just USD 254 million behind long-standing leader Michelin.
Like all major tyre manufacturers, Bridgestone has faced challenges due to the unprecedented rise in raw material prices and high inflation. The company has taken robust measures to address these issues through flexible supply management, which has contributed to a 5% increase in year-on-year revenue.
Continental Tires, with a brand value of USD 4.7 billion, has earned better scores in Familiarity, Consideration, and Reputation, driving an increase in its BSI score, up 3.2 points from 2023 to 79.1 out of 100.
With a staggering 19% increase, Giti's brand value has leapt to USD 924 million, making it the fastest-growing tyre brand in the world this year, ranking 9th overall. Solid revenue growth forecasts, particularly in the Chinese market, support this significant growth. The brand also increased its BSI score by 6.3 points.
Giti has exhibited a particularly robust performance in China, its largest market by revenue. Brand Finance’s research shows that Giti received a very high Recommendation score in China, reflecting customers’ high satisfaction with the brand. Familiarity and Consideration are also exceptionally high, showcasing that Giti has achieved substantial market recognition and acceptance in the region.
Sailun (brand value up 10% to USD 801 million), Linglong Tire (brand value up 11% to USD 799 million) and Sentury Tire (brand value up 17% to USD 377 million) have also witnessed remarkable brand value growth driven by substantial overseas demand. The Chinese tyre industry experienced a prosperous year in 2023, marked by the expansion of overseas operations, high demand, and favourable domestic conditions for industry development. Notably, exports to South America increased by 33%.
Alex Haigh, Managing Director, Brand Finance Asia, commented:
"In a landscape where global tyre giants face challenges, the success of Chinese brands shines brightly. Their remarkable growth amid adversity underscores the resilience and dynamism of the Chinese tyre industry. With innovative approaches and a focus on sustainability, Giti emerges as the fastest-growing brand, buoyed by robust performance in China. Meanwhile, Linglong Tire, Sentury Tire, and Sailun are expanding their global footprint, leveraging cost-effectiveness to secure significant market share. As inflation grips traditional markets, the ascent of these Chinese brands heralds a new era of competition and opportunity in the global tyre market."
ENDS
Note to Editors
Every year, leading brand valuation consultancy Brand Finance puts 5,000 of the biggest brands to the test, and publishes over 100 reports, ranking brands across all sectors and countries. The world’s top 25 most valuable and strongest tyre brands are included in the Brand Finance Tyres 25 2024 report.
Brand value is understood as the net economic benefit that a brand owner would achieve by licensing the brand in the open market. Brand strength is the efficacy of a brand’s performance on intangible measures relative to its competitors.
The full ranking, additional insights, charts, more information about the methodology, and definitions of key terms are available in the Brand Finance Tyres 25 2024 report.
Brand Finance is the world’s leading brand valuation consultancy. Bridging the gap between marketing and finance for more than 25 years, Brand Finance evaluates the strength of brands and quantifies their financial value to help organizations of all kinds make strategic decisions.
Headquartered in London, Brand Finance has offices in over 20 countries, offering services on all continents. Every year, Brand Finance conducts more than 5,000 brand valuations, supported by original market research, and publishes over 100 reports which rank brands across all sectors and countries.
Brand Finance also operates the Global Brand Equity Monitor, conducting original market research annually on over 5,000 brands, surveying more than 150,000 respondents across 38 countries and 31 industry sectors. Combining perceptual data from the Global Brand Equity Monitor with data from its valuation database enables Brand Finance to arm brand leaders with the data and analytics they need to enhance brand and business value.
Brand Finance is a regulated accountancy firm, leading the standardization of the brand valuation industry. Brand Finance was the first to be certified by independent auditors as compliant with both ISO 10668 and ISO 20671 and has received the official endorsement of the Marketing Accountability Standards Board (MASB) in the United States.
Brand is defined as a marketing-related intangible asset including, but not limited to, names, terms, signs, symbols, logos, and designs, intended to identify goods, services, or entities, creating distinctive images and associations in the minds of stakeholders, thereby generating economic benefits.
Brand strength is the efficacy of a brand’s performance on intangible measures relative to its competitors. Brand Finance evaluates brand strength in a process compliant with ISO 20671, looking at Marketing Investment, Stakeholder Equity, and the impact of those on Business Performance. The data used is derived from Brand Finance’s proprietary market research programme and from publicly available sources.
Each brand is assigned a Brand Strength Index (BSI) score out of 100, which feeds into the brand value calculation. Based on the score, each brand is assigned a corresponding Brand Rating up to AAA+ in a format similar to a credit rating.
Brand Finance calculates the values of brands in its rankings using the Royalty Relief approach – a brand valuation method compliant with the industry standards set in ISO 10668. It involves estimating the likely future revenues that are attributable to a brand by calculating a royalty rate that would be charged for its use, to arrive at a ‘brand value’ understood as a net economic benefit that a brand owner would achieve by licensing the brand in the open market.
The steps in this process are as follows:
1 Calculate brand strength using a balanced scorecard of metrics assessing Marketing Investment, Stakeholder Equity, and Business Performance. Brand strength is expressed as a Brand Strength Index (BSI) score on a scale of 0 to 100.
2 Determine royalty range for each industry, reflecting the importance of brand to purchasing decisions. In luxury, the maximum percentage is high, while in extractive industry, where goods are often commoditised, it is lower. This is done by reviewing comparable licensing agreements sourced from Brand Finance’s extensive database.
3 Calculate royalty rate. The BSI score is applied to the royalty range to arrive at a royalty rate. For example, if the royalty range in a sector is 0-5% and a brand has a BSI score of 80 out of 100, then an appropriate royalty rate for the use of this brand in the given sector will be 4%.
4 Determine brand-specific revenues by estimating a proportion of parent company revenues attributable to a brand.
5 Determine forecast revenues using a function of historic revenues, equity analyst forecasts, and economic growth rates.
6 Apply the royalty rate to the forecast revenues to derive brand revenues.
7 Discount post-tax brand revenues to a net present value which equals the brand value.
Brand Finance has produced this study with an independent and unbiased analysis. The values derived and opinions presented in this study are based on publicly available information and certain assumptions that Brand Finance used where such data was deficient or unclear. Brand Finance accepts no responsibility and will not be liable in the event that the publicly available information relied upon is subsequently found to be inaccurate. The opinions and financial analysis expressed in the study are not to be construed as providing investment or business advice. Brand Finance does not intend the study to be relied upon for any reason and excludes all liability to any body, government, or organisation.
The data presented in this study form part of Brand Finance's proprietary database, are provided for the benefit of the media, and are not to be used in part or in full for any commercial or technical purpose without written permission from Brand Finance.
