German car-making giant spins-off commercial division and renames to focus on passenger cars
Daimler has officially rebranded as Mercedes-Benz Group in a renewed effort to refocus the business on its Benz, AMG, Maybach and EQ brands.
The decision to rename the group comes a year after it spun-off its commercial, truck- and bus building division into Daimler Truck AG.
Officially, the changes are claimed to enable Benz to ‘refocus’ on its move to electrification but it’s been reported the real motivation behind the massive rebranding exercise is the hope the new entity will command a higher share price.
Marking the biggest reshuffle since the Daimler-Benz Group was founded in 1926, shares of the newly formed brand reached their highest levels since 2015 on the day of the split, with senior execs hoping future investors could begin viewing Mercedes as more of a tech firm, rather than a traditional automaker.
“We have a real chance to raise the multiple,” CEO Ola Kallenius told journalists following the split.
Shares of Daimler Truck AG have also risen slightly since their debut on the global markets.
Despite the dramatic rebranding others have warned that in the short-term, at least, it might still take some time before Benz’s value catches up with the likes of Tesla.
Speaking to Reuters, RBC Capital Markets analyst, Tom Narayan, said: “Investors could start viewing Mercedes as a Lucid Motors or Tesla type and start to give it an EV (electric vehicle) multiple.
“But Lucid and Tesla get to start at 100% EV. For Mercedes you have to convert your existing ICE (internal combustion engine) business to EVs. That may be a limitation on how far the multiple could go near-term.”
Whatever happens, others have warned that as Benz increasingly grabs a foothold on the pure-electric car market its newer rivals will be the biggest losers.
“Tesla’s valuation is based on the assumption that Tesla will win market share from German manufacturers, who don’t have a comparable revenue growth potential”, said Daniel Schwarz an analyst at wealth management company Stifel.
Keyword: Daimler rebrands as Mercedes-Benz Group