How Volkswagen’s Key Brands Stack Against Each Other

by Trefis Team
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German automaker Volkswagen (OTCMKTS:VLKAY) is one of the largest global automotive companies in terms of the number of vehicles sold annually. A meaningful chunk of these vehicles are sold under the key subsidiary brands Audi, Skoda, Porsche, and Bentley. Most of these are luxury brands and with the vehicle market stabilizing in developed countries, high margin luxury cars will continue to be an important value driver. Take a look at our breakdown for Volkswagen’s key brands which compares them across share, pricing, and profit metrics. It becomes clear that Audi, Porsche, and Bentley hold much more value than Skoda.

Our price estimate for Volkswagen stands at $38, slightly below the market price.

Market Share: Audi’s Market Share Is Almost 2X Skoda’s And 6X Porsche/Bentley’s

We estimate that Audi’s share in global passengers car market will be just under 3% in 2017. The corresponding figure for Skoda is expected to be about 1.60% and that for Porsche & Bentley (high end luxury) to be around 0.50%. Clearly, Audi is selling a lot more vehicles than the other brands. While the difference compared to Porsche/Bentley can simply be attributed to the vast difference in the average price tag, the interesting part is that despite the relatively higher price, Audi is selling a lot more than Skoda.

Revenue Per Vehicle: Porsche/Bentley’s Revenue Per Vehicle Is 2X Audi’s & 5X Skoda’s

We estimate that Porsche/Bentley’s average revenue per vehicle will be around $84,000 in 2017. The figure for Audi is expected to be $38,000 and that for Skoda to be $16,500. The huge difference in prices eventually determines profitability of these vehicles. As expected, Porsche/Bentley have the highest EBITDA margin of close to 49%, followed by Audi and Skoda at 23%-24%.

Profits: Despite Lowest Market Share, Porsche/Bentley Have Profits That Rival That Of Audi

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