There are three heat maps employed in the analysis. The first heat map is in the “segment contribution” along each company’s regional lines. Key facts here are:

1. Mercedes Benz’s largest single market is China, which is holding steady at 32-33% mark. It bears noting that while China is its largest market for cars, Europe is its largest market for vans. In the European market, Germany accounts for 35-38% of all sales. In North America, the U.S. accounts for a lion’s share of sales.

2. Volkswagen’s largest market is Europe/Other Markets (i.e. continental Europe, South Africa and Türkiye) and present trends indicate its share growing here. Meanwhile, it’s “Asia-Pacific” share is slipping. This has been attributed to weakened sales in China while its rising sales in India are running off a low base. Both China and India also have very strong competitors in the form of both indigenous as well as Japanese carmakers.

3. Ferrari’s second-largest market is the entirety of Asia which has risen from 23% of total market share to 30% in Q1 this year. It’s EMEA (i.e. “Europe, Middle East and Africa”) market has been showing a gradual decline while the Americas have been holding (mostly) steady in sales.

The second heat map examines the Year-on-Year (Y-o-Y) trends in sales per region across full financial years (FYs). Key takeaways are:

1. After a strong boost in sales in North America in 2021, Mercedes Benz had held steady in North America (especially in the U.S., its second largest single market for cars). Meanwhile, China has seen a steady incremental rise in demand across 2021 and 2022.

2. Volkswagen is showing an overall slippage in sales trajectory in “Europe/Other Markets” but this is increasingly being buffered by very strong growth trends in North America (again, the U.S. is the dominant market here).

3. Ferrari’s sales trends have been positive all around and are particularly strong in Asia – with China, the Hong Kong Special Administrative Region and Taiwan leading the pack over all other countries in the continent.

The third heat map is the “Quarter versus Year” (Q-vs-Y) wherein the most recent quarter’s results are compared relative to the sales figures for the region in FY 2022. Thus, the “optimal health” line would be at 25%. If it runs above, sales trends for the year can be assumed to be in excellent health (barring new information). This heat map also adds further context to the second heat map. Key trends here:

1. For Mercedes Benz, sales in Europe and China are running in excellent and optimal health. Sales trends in Europe in the year so far, in particular, seem to be en route to recovering ground lost in 2021.

2. The Europe story seems to be resonant in Volkswagen as well; however, the decline in sales has been prevalent for some time now. Meanwhile, North America seems en route to be paying off in spades while South America and Asia seem to be running at sub-optimal rates.

3. Every one of Ferrari’s regions are running at excellent health and adding to strong year-wise trends.

The “North America/U.S.” story prevalent in both German houses is particularly interesting. Both carmakers have a very strong showing in Electric Vehicles (EVs) and have ben registering bigger and bigger sales numbers worldwide – with the bulk of sales traditionally seen in Europe. Now, trends indicate that they’re steadily capturing EV market share away from Tesla in the latter’s home turf, wherein an over-catered “creamy layer” customer segment is increasingly finding the plethora of choices made available from foreign carmakers to be increasingly appealing. The two German houses’ luxury marques have also been seeing a steady surge in popularity in recent years, which will likely also be quite sustainable in the mid- to long-term. However, in terms of sheer volume, Asia will loom large in their windscreen in the short- to mid-term.

Meanwhile, the Italian horse has plenty of cause to prance on account of its enduring brand equity all over the world.

Market Performance and Key Items of Interest

Considering the fact that an increasing number of investors have been moving to broad funds over individual tickers in the year so far, an analysis of comparative performance of these three carmakers’ stocks versus the broad-market S&P 500 (SPX in index form and SPY in ETF form) and the tech-heavy Nasdaq-100 (NDX in index form and QQQ in ETF form) would be in order.