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The Automotive Industry in Germany

sector automoción Alemania. Headquarters BMW 300x229

BMW Headquarters in Germany

Last week our article spoke about the Automotive Industry in Spain and the importance of the industry in the economy.

Today we are going to take a look at German, Europe’s largest automotive market both from the standpoint of sales and that of production. Over 30% of cars made in Europe are produced in Germany and 20% of new cars registered every year are sold on the German market.

In 2013, the German automotive industry churned out 13 million vehicles, that is over 17% of the worldwide total. The production of passenger cars was 5’4 million which confirmed Germany’s leading place in Europe.

Therefore, it is not surprising that this is the leading motor of the national economy. Sales reached a total of € 361,000 million in 2013 placing firmly in the number one spot as that is the equivalent of 20% of total sales in the country. The industry gives jobs to some 756,000.

German manufacturers of passenger cars and light commercial vehicles exported € 200,000 million in 201 which was up 3% on the previous year’s figures. 77% of these vehicles wen to export marketsin 2013.

Betting on R + D

German automotive firms invested € 18,000 million in R+D in 2013 which, to put it in perspective, is one third of total worldwide automotive investment.

The German automotive industry is a leader in R+D both at home and in Europe as this also one third of total German investment in R+D and provides employment for 95,000 people.

If further proof were needed of the importance given to R+D in Germany, it can be found in the fact that 9 of the 10 companies that registered most patents in 2013 were from the sector. In 2012, 51% of sales in the industry came from products that included some element of innovation.

The companies involved are well aware of the need to maintain a high level of investment in R+D so as to maintain the leading position in the world market. Some 40% of companies will be increasing spending on R+D this year.

Distribution Channels

For any firm contemplating moving into the German market, the following are the channels which should be taken into account when selecting the one most suited to an individual company’s requirements and needs:

  • Direct contact with potential customers: working personally with German manufacturers with factories in the country.
  • Sales agent or distributor. Ideally, one who is already supplying the industry with compatible components.
  • Business partners. Form an alliance or joint venture with a local company that wishes to expand the range of products they are already selling into the industry. Whist it is probably the most difficult when searching for the ideal partner, it is by fair the best as far as easing market-entry is concerned. When going hand-in-hand with an established local company that knows the rules of the game and the standards expected by the customers, many a door is opened with greater ease than going it alone.

Sources

VDA: Verband del Automobilindustrie.
https://www.vda.de/en/topics/automotive-industry-and-markets

GTAI: German Trade and Invest
http://www.gtai.de/GTAI/Content/EN/Invest/_SharedDocs/Downloads/GTAI/Industry-overviews/industry-overview-automotive-industry-en.pdf