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AUTO PARTS
in Germany
Auto Parts in Germany
A pillar of the national economy
Germany has a special relationship with the motor car. Considered by many as
the birthplace of the automobile – in 1901 it was already producing 900 vehicles a
year - German engineers such as Karl Benz, Gottlieb Daimler and Wilhelm
Maybach were pathfinders in the technical development of the internal
combustion engine. Germany’s famous premium brands of today are coveted
around the world. The names of companies such as Porsche, Audi, Mercedes and
BMW, as well as the mass market producer, Volkswagen, are synonymous with
style and quality. International marques, including Opel (GM) and Ford, are also
an important feature on the automotive landscape.
In recent years, the German auto industry has managed to keep its head above
water at a time when other industrial sectors were struggling and the domestic
economy was flat. Over the past decade, the industry has doubled its revenues
and raised its share of manufacturing output from 12 per cent to 19 per cent.
The industry consists of a small number of global lead manufacturers supported
by a large number of family-owned small and medium-sized suppliers (2,500
enterprises in all). It generates a turnover of €226bn and an export surplus of
€80bn. Since reunification, auto manufacturing has become a crucial pillar of the
East German economy with seven production centres and over 700 local
suppliers.
Production
German manufacturers (including Chrysler) produced 11.3 million cars in 2006
in 23 countries. German factories turned out 5.8m cars, making it the world’s
third largest manufacturer after the USA and Japan. Revenues, which have
doubled over the last 10 years, amount to €236bn (2005) or 10.5 per cent of
national GDP.
Employment
It is estimated that every seventh job in Germany depends directly or indirectly
on the automotive sector. Some 1.4 million people work in upstream and
downstream businesses that are dependent on the automotive sector. One mark
of the industry’s health is that employment has actually increased by 21 per cent
over the past 10 years.
While Western Europe remains the focus of production by German vehicle
manufacturers and suppliers, national companies also employ a total of 160,000
people across many of the countries that joined the EU in 2004. Their global
dimension is marked by establishments in the USA, Mexico and Canada (at over
300 locations) and in China (now running at 140 plants).
The automotive parts and components market in Germany
The German market has seen a growth in imports of parts and components,
especially from developing countries. It is, however, expected that the market for
OEM parts and components will decrease in the coming years.
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Germany is the most important European automotive market. It heads the EU
in consumption, production and trade of automotive parts and components.
According to the German automotive association VDA, the consumption of
car parts grew to € 75 billion in 2007, increasing by 7% on the previous year.
Consumption of parts and components, as derived from Prodcom data, is
calculated at € 92 billion.
In that year, total production increased to € 101 billion; growth in production
was primarily led by exports between 2003 and 2007.
Imports of parts and components reached € 52 billion in 2008, a compound
annual increase of 6.5% since 2003. Given exports of € 67 billion, this led to a
trade surplus of € 16 billion.
Imports from developing countries increased to € 4.5 billion, an average
annual growth of 12% between 2003 and 2008.
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The share of imports sourced in developing countries reached 8.6% of total
imports. The top-5 suppliers were responsible for 77% of this.
Economy
The size and the state of the general economy has a very strong influence on the
sales of vehicles and vehicle parts and components. This has become especially
evident during the past year, when sales plummeted in response to the financial
and economic crisis.
In this survey, we will not go into detail about the crisis and its effects on the
automotive supply chain in Germany, because it is too early to expand on such
specific outcomes. However, it is safe to assume that the effects will to be
profound and long-lasting. The crisis and its repercussions are dealt with much
more extensively in the CBI market survey covering the automotive parts and
components market in the EU.
The German economy measured € 2.5 trillion in 2008 and accounted for 20% of
the total EU economy. GDP increased by 1.3% in 2008, but the economy is
expected to decrease by 5.4% in 2009. GDP per capita PPS2 in Germany was € 29
thousand in 2008, which was 16% higher than the EU average. (Eurostat 2009)
Parts and components
German car parts manufacturers made good progress during the past decade.
Several systems suppliers are in, or within reach of, the top league of worldwide
automotive suppliers, and are doing especially well in the booming market for
electronic products. After initial investments by car manufacturers in Eastern
Germany, suppliers followed, by building parts and component plants in close
proximity to assembly operations. This is repeating itself in Eastern Europe
where new facilities are being set up, the German suppliers already having
established over 200 sites in the region.
Total consumption of parts and components in 2007, as derived from Prodcom
data, is calculated at € 91.5 billion. Parts for vehicles constituted € 88.5 billion of
this total. € 585 million was realised with parts for agricultural equipment, € 1.6
billion with parts for construction equipment, and € 740 million with parts for
lifting and materials handling equipment. Total consumption increased by 3.6%
annually between 2003 and 2007. Consumption equals 28% of total EU
consumption.