Automotive Germany Global Market Perspective 2017

Germany is recognized the world over for its outstanding automotive industry and excellence in engineering. From Asia to the Americas, German cars embody highly cherished values of innovation, reliability, safety, and design. Germany is by some distance Europe’s leading production and sales market. The country’s world-class R&D infrastructure, complete industry value chain integration, and highly qualified workforce create an internationally peerless automotive environment.
Increasing Worldwide Demand
Global demand for vehicles “Made in Germany” remains strong, with exports accounting for three quarters of all domestic vehicle production (equivalent to almost 4.4 million vehicles and an annual increase of two percent). Germany was the most significant exporter of passenger cars in 2015, ahead of Japan and South Korea.
Most German vehicles are exported to other European countries, with neighbour states accounting for over 50 percent of total export levels. Beyond Europe, the USA is the largest importer of German-made vehicles followed by Asia. German OEMs occupied almost three quarters of the global premium vehicle market, with a similar ratio of premium segment vehicles manufactured for export purposes. Demand for premium vehicles is particularly high in China and the USA. The largest and most exclusive vehicles have a major pull in the Chinese market, so much so that China is the most important market for a number of German vehicle series.
Premium Market Hub
Germany is the world’s premium car production hub thanks to its world-class R&D, labour force, infrastructure, and automotive manufacturing heritage. Of all premium branded vehicles produced globally, more than 70 percent are German OEM-manufactured. Of all vehicles produced globally, almost two thirds of vehicles were produced in Europe (41 percent were made in Germany). Within Europe, more than 80 percent are German OEM-badged vehicles – almost 70 percent of these vehicles are made in Germany.
The western European light vehicle production sector is predominantly premium sector focused. As a result, the scale and range of production is expanding significantly. Production of premium segment cars reached a total share of 37 percent of western European light vehicle production and will continue to grow.
Premium Market Growth
A broad consensus exists among reputable industry analysts that, globally, the premium market segment will grow at a much faster rate than the total passenger car segment in the next decades.
Growth within this segment can be mainly attributed to growing international demand for high-value, premium small and compact-sized cars, as well as premium SUVs. The German automotive industry is the leading producer of premium cars worldwide and continues to set the benchmark in this segment.
The German market is ideally positioned to meet growing international premium demand: Almost all German and German-based manufacturers have already launched or intend to launch new products meeting premium segment demand. Excellent production standards, sustainable innovation and know-how based on the country’s automotive manufacturing tradition will further strengthen the leading position of Germany as a leading international automotive manufacturing location.
Worldwide Reputation
German products and the “Made in Germany“ label are associated with positive attributes such as quality, reliability, durability, efficiency, and safety. A GTAI study conducted in 15 major world cities finds this to be the case in all regions of the world; be it Asia, Africa, Australia, Europe or the Americas. The study also notes that regional and sectoral differences in terms of importance attached occur in all but one area: the automotive sector.
Rising R&D Budgets
German automotive company investment in research and development remains strong as manufacturers seek to maintain the competitiveness of vehicles “Made in Germany.”
In 2014, German automotive companies spent around EUR 19.6 billion on internal research and development projects; more than any other manufacturing sector in Germany. Almost one third of Germany’s total manufacturing industry R&D expenditure is spent by automotive companies, with R&D budgets expected to rise.
Germany’s automotive companies employ the largest number of research personnel in the manufacturing sector. With 100,000 researchers (full-time equivalent), automotive companies employ more than one quarter of the total R&D workforce in Germany’s private economy. Most Innovative Production Location German cars continue to enjoy a globally positive image and are in high demand across the world.
A recent Ernst & Young study of 300 companies active in the European automotive sector (15 percent OEMs and 85 percent suppliers) finds Germany to be the most innovative automotive hub in international comparison. Eighty-one percent of those companies surveyed consider Germany to be the most competitive hub in terms of innovative power (ahead of Japan and South Korea who polled 65 percent and 61 percent respectively.


Thursday May 25, 2017