Company Analysis

Vs Vs
 Brief history
Volkswagen
Volkswagen AG is a German auto
giant and one of biggest automobile
companies in the world.
It offers passenger and commercial
vehicles under multiple brands like
Volkswagen, Skoda, Porsche,
Bentley, Audi, SEAT, Lamborghini,
and Bugatti.
Daimler
Daimler AG commonly known as
Mercedes is a German multinational
automotive corporation. It is one of
the world's leading car and truck
manufacturers.
The company divides itself in 5
divisions: Mercedes-Benz Cars,
Mercedes-Benz Vans, Daimler Trucks,
Daimler Buses, and Daimler Mobility.
Tesla
Tesla, Inc. is an American electric
vehicle and clean energy company.
The company specializes in electric
vehicle manufacturing, battery
energy storage from home to grid
scale and, through its acquisition of
SolarCity, solar panel and solar roof
tile manufacturing
 Market capitalization

Tesla>>Volkswagen> Daimler
Total Revenue

Company 2019 2018

Volkswagen 252,632 million euros 235,849 million euros

Daimler 172,745 million euros 167,362 million euros

Tesla 20,559 million euros 17,951 million euros

Volkswagen > Daimler >> Tesla

Source : Annual report of Volkswagen, Daimler and Tesla for the year 2019
Gross profits

Company 2019 2018

Volkswagen 49,142 million euros 46,350 million euros

Daimler 3,830 million euros 10,595 million euros

Tesla 3403 million euros 3381 million euros

Volkswagen > Daimler >> Tesla

The gross profits of Daimler has dropped down by 63% by 2018

Source : Annual report of Volkswagen, Daimler and Tesla for the year 2019
Price/Earnings ratio
The Price to Earnings Ratio (PE Ratio) is calculated by taking the stock price / EPS (ttm).
This metric is considered a valuation metric that confirms whether the earnings of a
company justifies the stock price.

Company Aug 31, 2020

Volkswagen 14.37

Daimler 104.70

Tesla 1243.44

The extremely high value of PE for tesla indicates that its stocks are overvalued maybe
because of all the buzz.

Source : www.ycharts.com
Analysis

● Volkswagen is way ahead of Daimler and Tesla in all the factors.

● Tesla is growing at a great pace considering it got into the market only in 2003.

● In terms of Innovation Tesla is on top of the leaderboard

● Daimler, which used to be a large Tesla shareholder is struggling a bit to retain in position
with tough competition from Tesla’s side.
 Guesstimate - Estimate the Global market size for smartphones (10 marks)

Assumptions -

● To estimate market size for particularly current year.

● Assuming any touchscreen phone to be a smartphone.
● To estimate size by no. of smartphones sold

I will approach this by demand side i.e by estimating the no of people using smartphones

World population - 7.8 billion = ~ 8 billion

I will segment the population based on age, as we are talking about any smartphone so income won’t matter
much.

Average life expectancy = 70 yrs

At a particular age people start using phones and then keep using and replace them at appropriate periods. So I will
estimate the new smartphone users and the replacement demand for old ones.

Assuming the age distribution across age to be uniform, each year (8/70 = 11.4 crores ) ~ 10 crore people enter into
the smartphone usage age.
But not everyone uses phone, assuming only 80 % people use phone.

Rich and upper middle class - 10%

Middle class - 30%
Lower middle class - 40%
BPL - 20%

Considering the income division and the price of smartphones, I am assuming that only 50% of that 80% use
smartphones

New smartphone users = 0.8 x 0.5 x 10 crores = 4 crores

Replacement demand of existing users

So, 80% people use phones of which 50% use smartphones,

Existing smartphone users = 0.8 x 0.5 x 8 billion = 3.2 billion
Usage duration of smartphone = 5 years

So, 3.2 billion / 5 years = 64 crores new smartphones sold to people to replace their old phones.

Total phones sold = 64 + 4 = 68 crores = 680 million