Singapore profits as Germany loses 'nation brand' strength

12 Oct 2015 - NIKKEI Asian Review - Ripples from German auto giant Volkswagen's diesel emissions scandal have been felt worldwide, sometimes in unexpected forms. As the incident has tainted the image not only of the company but the country as well, Germany has lost its position as the most powerful "nation brand" while Singapore, in a windfall, has taken over that spot.

U.K. research company Brand Finance is releasing a report Monday that reveals Germany has slipped to 13th in 2015 from the No. 1 position in 2014 in a survey of 100 countries under the category of "nation brand strength." Though the metrics changed slightly this year, the report acknowledges that "Germany has lost its status as the world's most powerful nation brand to Singapore."

By this calculation, Germany's brand value stands at $4.166 trillion, losing 4% or $191 billion from last year. The loss cannot be attributed only to the VW scandal, but the research company recognizes that the country's brand strength is "derived in large part from its manufacturing prowess [including] automotive brands such as Volkswagen." That "such an iconic German brand, the 'people's car,' could behave in this way is beginning to undo decades of accumulated goodwill and cast aspersions over the practices of German industry," said David Haigh, CEO of Brand Finance.

Germany's international reputation was enjoying a positive year, especially from its warm reception for Syrian migrants. But the research company claims "the goodwill generated by [that] sympathetic stance has been overshadowed by VW's deception."

And the result has benefited Singapore. The city-state, which already was a runner-up to Germany in 2014, took the top score in 2015 by receiving 88.0 points out of 100 under the proprietary formula that determines the ranking. Along with raising its national brand value by 10% to $412 billion in 2015, Singapore gained points in key metrics such as suitability as an investment destination. The death of founding father Lee Kuan Yew in March was "a sad loss" for the country, Haigh said, noting that Lee left "a legacy that few can hope to better."

A number of smaller European countries scored well in the report. Switzerland came in second to Singapore, followed by Finland in fourth, while the Netherlands, Luxembourg and Norway also made the top 10. Asia-Pacific representatives New Zealand and Hong Kong ranked fifth and sixth, respectively, while two Persian Gulf states, the United Arab Emirates and Qatar, won high assessments as attractive investment locations.

National brand strength is based on an index of three major elements: investment, society and goods and services. It considers items such as taxation and government policy on trade, but it does not reflect universal values such as human rights and press freedom. Robert Haigh, Brand Finance's marketing and communications director, confirmed to the Nikkei Asian Review that "civil-society-related values do not play a role" in the company's calculation of national brand strength.

KENJI KAWASE, Nikkei deputy editor
October 12, 2015 9:01 am JST

Source: Nikkei Asian Review http://asia.nikkei.com/Features/Emissions-scandal/Singapore-profits-as-Germany-loses-nation-brand-strength