Market Analysis - Automobile 2017
Germany is Europe’s number one automotive market in production and sales terms; accounting for around 30 percent of all passenger cars manufactured and almost 20 percent of all new registrations. Germany also boasts the largest concentration of OEM plants in Europe. There are currently 41 OEM sites located in Germany. German OEM market share in Western Europe was more than 51 percent in 2015. Germany is conveniently located next to Poland, the biggest Eastern European market with passenger car unit sales of 355.000 (eight percent annual increase) in 2015.
The automotive industry is the largest industry sector in Germany. In 2015, the auto sector recorded turnover of EUR 404 billion – around 20 percent of total German industry revenue. The automobile industry is one of the largest employers in Germany, with a workforce of around 792,500 in 2015; an increase of almost two percent compared to the previous year.
The Germany automotive industry will perform best in the developing world in the years ahead. At home, the sector will consolidate its leading market position, largely as a result of development and growth in the premium market segment. The European share of value added in the premium vehicle segment will be more pronounced than in other regions, where the segment is comparatively small or negligible. China will remain a strong performer in the volume segment, with India also recording a significant increase in demand in the small vehicle segment. The US vehicle market is in upturn mode and one of the most important sales markets for German OEMs. In global comparison, Europe is the most promising automotive investment location in value-added terms.
German companies represent 10 percent of European manufacturing companies and generate 27 percent of total EU turnover in this sector. In fact, the manufacturing sector represents more than one fifth of Germany’s “value added” – one of the highest shares in Europe. Increasingly more international companies are placing their faith in Germany as a vital production site location, and are benefiting from superior productivity rates and the country’s excellent business framework of stable labour costs, excellent production standards, and a highly skilled workforce.
In order to maintain European automotive industry competitiveness and sustainability, the European Commission set up the CARS 2020 Action Plan in 2012. Consisting of concrete policy initiative proposals, CARS 2020 directly addresses the opportunities opening up in emerging economies. Central to the initiative’s objectives are four areas of activity: 1. the promotion of investment in advanced technologies and innovation for clean vehicles; 2. Improve market conditions; 3. Support industry in accessing the global market; 4. Pro- mote investment in skills and training. Research and innovation activities will be streamlined under the European Green Vehicle Initiative, with European Investment Bank cooperation providing small and medium-sized enterprises with access to credit.