January 30, 2013Procurement Consulting – Brickwork Sourcing

German Automobile Sector Forging AheadGerman Automobile Sector Forging Ahead

Brickwork India (Confidential)

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Germany, the world’s fourth biggest automobile producer has an annual production of 12 million automobile units around the world, with 32% of all the passenger car production, and German OEMs accounting for 17%.

The automotive industry remains Germany’s most important economic sector and Europe’s single largest auto market.

The biggest threat to the German auto industry was in 2008 during the financial crisis.

The auto exports made from Germany began to increase a great deal after 2010 with the exports mainly catering to the UK, USA, and Asia.

The Volkswagen Group, which is a major German auto manufacturer, experienced huge growth and is currently one of the three biggest auto companies in the world.

Germany also hosts the largest concentration of OEM plants in Europe and is committed to automotive research and development with an annual investment of EUR 21 billion.

Germany has always been deemed the most innovative auto nation worldwide. 2

Current Scenario

Given that automotive manufacturing in Germany is one of the largest sources of employment, GDP, and tax revenue for the country, it becomes important to ensure the viability of this industry.

Although German auto majors are investing heavily on research and development as well as looking at innovation, they might be running out of options.

The increasing dependency on third world countries for manufacture of custom auto parts is a growing trend.

The auto ancillary industry has to be monitored and increased dependency seems to be the way forward.

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The Future Road

There has been a huge growth in ancillary industries over the years where in the German auto majors have lowered production costs by transferring aspects of production into these industries.

It is estimated that the auto ancillary industry is bound to grow by 5-7% to around US$46 billion going forward.

Adopting reliable suppliers is an area of opportunity for German auto majors.

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Growth Drivers and Opportunities

Market Potential

Despite all the short comings, there is a huge opportunity waiting for investors in the automobile sector in Germany; there is constant expansion and innovation in the sector and this is evident from the large number of auto patents applied for by Germany. Further, as the country is the gateway to the auto market of Europe there is a need for new strategies to implement sourcing of auto parts which are custom made in countries such as India and China. This would mean that there is an increased need for global sourcing; Brickwork Sourcing works with global automobile companies and has capabilities of providing end-to-end sourcing, vendor and supply chain management solutions.

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THANK YOUTHANK YOUContact:info@brickworksourcing.com Sanjeeth HegdeIndia: +91 (80) - 4040 – 9999 (218 Ext)

10 April 2023

Brickwork Sourcing

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