"Brand Germany" devalued by 191 billion US dollars as a result of the VW scandal

Switzerland is the second-strongest national brand. In the list of the 100 most valuable national brands, it has moved up from 16th to 14th place (see tables below).

Recent revelations about 11 million diesel vehicles equipped with software designed to manipulate emissions tests are not only tarnishing VW’s reputation but are also having a negative impact on the German national brand as a whole. According to Brand Finance, Germany has consequently lost its position as the strongest national brand. The brand valuation and strategy consulting firm assesses the financial impact of image and reputation on the value of the national brand for the 100 most successful countries. The results are published in its annual study, the Brand Finance Nation Brands Report. The report shows measurable damage to the long-term financial potential of the «Germany brand,» whose value has fallen by 191 billion U.S. dollars to 4.2 trillion U.S. dollars—4 percent lower than in 2014.

«German industry is praised for its efficiency and reliability, and Germans are regarded as hardworking, honest, and law-abiding. The fact that such an iconic German brand is capable of behaving in this manner destroys decades of accumulated goodwill, tarnishes the reputation of German industry, and makes the Siemens bribery scandal appear less like an isolated incident and more like further evidence of a widespread problem in German corporate culture,» says David Haigh, CEO of Brand Finance.

Up until this incident, 2015 had actually been a pretty good year for Germany’s international image, and the prospects for a strong showing for its national brand looked promising. Germany garnered worldwide admiration, particularly for its willingness to take in Syrian refugees. Even though this influx—consisting largely of young people and families—is boosting the German economy, the goodwill earned through this display of compassion is being overshadowed by the VW scandal.

Singapore has knocked Germany off its top spot (now ranked 13th) and is this year’s strongest national brand in the world. As the city-state celebrates its 50th anniversary this year, its citizens can be truly proud of the nation they have built. The person primarily responsible for this success story is none other than the nation’s founder, Lee Kuan Yew. His vision, his pragmatism, his zero tolerance for corruption, and his kindness are seen by many as the key factors behind Singapore’s success.

Haigh continues, «Although the death of Singapore’s founding father, Lee Kuan Yew, in March of this year is a sad loss, he leaves behind a legacy that hardly anyone can surpass. He transformed Singapore into a modern, innovative, and efficient city that welcomes outsiders and is growing increasingly rich in cultural diversity. As a result, it has left its neighbors—including Malaysia, from which Singapore was excluded 50 years ago—far behind.»

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Even though it still has a long way to go before reaching the top spot, Iran is this year’s fastest-growing national brand. Its brand value has risen by 59 percent to $159 billion. This result is primarily attributable to Iranian President Hassan Rouhani, under whose moderate approach the country’s international perception is slowly but steadily improving and sanctions are being eased. However, strained relations with Sunni states will continue to pose an obstacle to local trade and investment; yet, with a market size of 77 million people, vast hydrocarbon reserves, and a well-educated population, Iran is well-positioned on the global stage.

«Iran must handle its communication with its newly gained supporters with care. In this regard, a carefully thought-out marketing strategy is almost as important as diplomacy in the traditional sense. If managed correctly, Iran could leverage its ancient treasures, its educated population, its strategic location, and its natural resources to transform its reputation,» comments David Haigh.
Although Singapore is the strongest brand and leverages its full potential more than any other nation, the United States remains in the lead in terms of value alone. It is the most valuable national brand, with a national brand value of 19.7 trillion U.S. dollars.

The U.S. is undoubtedly a strong brand with an inviting business climate. However, its value stems primarily from the sheer size of its economy. In addition to a large and capital-rich market that fully embraces the «Buy American» motto, there is an unrivaled number of established companies and organizations whose American roots account for a significant portion of their appeal and which export their products worldwide.

A world-leading higher education system and «soft power»—which stems from its dominant position in the music and entertainment industries—are other significant factors contributing to the United States« success. This »soft power” will help the U.S. defend its title as the world’s most valuable national brand for some time to come—at least until China replaces the U.S. as the world’s largest economic power.

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You can find the complete results and analyses in the 2015 Brand Finance Nation Brands Report.