BMW has 2 billion euro green lead over Daimler, analyst says
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MUNICH -- BMW AG's green lead over rival Daimler AG is valued at about 2 billion euros.
That estimate comes from Morgan Stanley auto analyst Stuart Pearson and is based on the gap between BMW Group's and Daimler's average fleet CO2 emissions.
Pearson said that BMW's CO2 emissions lead over its German premium rival would result in improved pricing power as its main rival races to add technology to close the gap.
BMW Group, which includes the BMW, Mini and Roll-Royce brands, finished 2010 with an average CO2 emissions of 147.9 grams per kilometer, according to figures from market researcher JATO Dynamics.
Daimler, which includes the Mercedes-Benz, Smart and Maybach brands ended last year with a fleet average of 163.3g/km. The results are based on an analysis of 21 European markets.
Avoiding stiff EU fines
To reach their EU-mandated targets by 2015 and avoid stiff fines, BMW will need to reduce its fleet CO2 emissions by 7.1 percent to 138.1g/km while Daimler needs to cut its average by 19.8 percent to 136.4g/km, JATO says.
So far, BMW has invested about 1.2 billion euros (about $1.7 billion) in the development and launch of CO2-reducing technologies such as stop-start and brake-energy regeneration for its cars, a company spokesman said in an e-mail reply to questions.
Pearson said BMW's CO2 advantage over its rivals could widen. "BMW is still moving the game forward," the analyst said in a phone interview.
The BMW spokesman said the automaker aims to reduce its CO2 fleet emissions by at least 25 percent between 2008 and 2020.
Gareth Hession, JATO's vice president of research, said Daimler has been hurt by Smart.
"I think they were expecting better things from their Smart brand to try to underpin their [CO2] results, but Smart isn't delivering," he said. "There is a real ceiling on Smart's volume because it is a pretty expensive vehicle to produce."
Daimler also failed in its bid to expand Smart beyond its two-seat low-CO2 ForTwo microcar, leaving the automaker with just one model to sell. Meanwhile, BMW's Mini brand has grown to three model lines by adding the Clubman and Countryman, both of which have CO2 emissions ranging from 103g/km to 168g/km.
Morgan Stanley's Pearson said Daimler's new range of direct-injection gasoline engines and stop-start systems should help it gain some ground on BMW in 2011.
In addition, the Mercedes A- and B-class entry-premium model lines are being completely reworked; Smart is supposed to get a four-door model in the next two to three years as a result of Daimler's year-old partnership with Renault SA and Nissan Motor Co.; and even the flagship Mercedes-Benz S-class sedan is offered with a four-cylinder diesel now.
A Daimler spokeswomen said that as the volumes increase for the company's new wave of efficient models and powertrains, the automaker's overall CO2 numbers would drop quickly. She added that Daimler is confident it will meet its EU-mandated CO2 target by 2015.
Said JATO's Hession: "They are not that far away from having, what I am led to believe by people in the organization, a truly competitive range of products."
You can reach Douglas A. Bolduc at dbolduc@crain.com.
