automotive industry in germany invest in germany
TRANSCRIPT
-
8/8/2019 Automotive Industry in Germany Invest in Germany
1/12
The Automotive Industry in Germany Driving Performance through TechnologyIndustry Overview
-
8/8/2019 Automotive Industry in Germany Invest in Germany
2/12
SpainPortugal
France
Switzerland
UnitedKingdom
Netherlands
Belgium
Luxembourg
Italy
Greece
Malta
Cyprus
Poland
Estonia
Latvia
Norway
Belarus
Ukraine
Macedonia
Serbia
Bosnia-Herzegovina
Croatia
Albania
Turkey
RU
Finland
CzechRepublic
Hungary
Romania
Bulgaria
Denmark
Slovakia
Slovenia
Austria
Ireland
Lithuania
Montenegro
3h>
1.5h>
Moldova
Moscow
Germany
Sweden
The Automotive Industry in Germany
Germany is the Geo-
graphic and Economic
Center of Europe
If Germany is known for one thing, its
the automotive industry. But were not
just sitting back and riding on the coat-
tails of our reputation as the home
of the automobile. Our automotive in-
dustry continues to operate at fullthrottle. Automotive is Germanys larg-
est industry by turnover, accounting for
more than a third of total domestic R&D
spending. German car manufacturers
and suppliers are world leaders in inno-
vation with more than 3,500 registered
patents every year. With 47 OEM com-
ponents and assembly plants, 32 indus-
try-related innovative clusters, 3,600
tier 1, 2, and 3 suppliers and Europes
most experienced workforce, Germany
is the primary location for technology-
driven companies active in all stages of
the value chain.
Member States of the European Union
-
8/8/2019 Automotive Industry in Germany Invest in Germany
3/12
Industry Overview 2008www.invest-in-germany.com 3
1 Source: ACEA, 2008
2 European Union 25 + EFTA 3 (Switzerland,
Norway and Iceland)
The German Automotive
Industry in Numbers
- Number one automotive market by pro-
duction and sales: accounting for 34 per-
cent of all passenger cars produced and
20 percent1 of all new registrations in
Europe2
- 5.7 million passenger cars and 500,000
trucks and buses produced at German
plants in 2007
- 25 passenger car assembly plants - more
than one third of Europes installed
capacity
- Over EUR 290 billion in annual combined
revenues for manufacturers and suppli-
ers in 2007 seven percent growth com-
pared to 2006
Passenger Car Production in Europe 2007 in Million Units
- A year-on-year increase of 310,000 units
in passenger car production by far the
largest in Europe
- Industry R&D expenditures in 2007 excee-
ding EUR 18 billion - more than a third
of total R&D spending in the German
industry
- 745,000 people work directly in the auto-
motive industry - 43 percent of them
employed at the supplier level
Change in Passenger Car Production in Europe 2006/2007 in Thousand Units
6
5
4
3
2
1
0
Germany
France
Spain
UK
CzechR.
Italy
Belgium
Poland
Others
Source: ACEA, 2008
5.7
2.6
2.2
1.5
0
.9
0
.9
0.
81
.4
0.7
300
200
100
0
-100
-200
Germany
Spain
UK
CzechR.
Poland
Italy
Fracne
Source: ACEA, 2008
310
117
92
77 6
3
18
-169
-83
Belgium
-
8/8/2019 Automotive Industry in Germany Invest in Germany
4/12
The Automotive Industry in Germany
The Advantages of Ger-
many as a Location for
Automotive Investments
Advantages abound across all segments
within the automotive value chain. The
leading role played by German manufac-
turers and suppliers in the international
vehicle industry further demonstrates
Germanys competitive edge as an out-standing business location.
Market
Germany hosts the largest concentration
of OEM plants in Europe - creating con-
siderable production volume, client and
product diversification advantages for sup-
pliers. Established suppliers in Germany
are able to access nine different OEMs
and their respective decision centers, 25
assembly plants (an impressive one third
of Europes total installed capacity) as well
as production facilities of almost all top
100 tier 1 suppliers.
Personnel
Germanys excellent highly-skilled labor
force has been the key to success for the
German automotive industry. Benefiting
from the countrys unique education sys-
tem geared to meet industry needs, the
industry can count on a direct workforce of
almost 750,000 highly-trained and experi-
enced people. One in nine employees work
in automotive-related R&D. The steady
flow of mechanical engineers graduat-
ing from approaching 100 universities andcolleges is helping to ensure continuity of
German engineering excellence.
4 Industry Overview 2008
Value Chain
ActivityDevelopment Design Manufacturing Distribution
Type of Facility R&D Center Design Center Production &
Assembly Site
Logistics Center
No. of Automo-
tive Locations
in Germany
211 212 253 334
Germanys
Share of the
European Total
42% 36% 20% 34%5
1: OEM R&D centers
2: OEM design centers
3: OEM final assembly plants for passenger vehicles;
the total number of OEM production sites in Germany is 47
4: Automotive logistics center
5: Share of German companies among top 100 European logistics prov iders
Source: Automotive News Europe, Nov. 2006; German Federal Logistics Association
(Bundesvereinigung Logistik), 2006; Invest in Germany Research, 2008
BMW Group, production plant, CO2-booth underframe
-
8/8/2019 Automotive Industry in Germany Invest in Germany
5/12
Mechatronics/Microsystems
Engineering
Microsystems
Micro and Nanotechnology
Mechatronics
Microelectronics
Power Engineering
Fuel Cells/Hydrogen
Power Electronics
(Hybrid Engines)
Traffic and Transportation
Automotive Engineering
and Telematics
Information and
Communication Tech.
Navigation, Telematics
Traffic Systems
Software Engineering
Virtual and Augmented Reality
Environmental Technology
Recycling Technology
Industrial Manufacturing
Adaptronics
Automotive
Carbon Fiber Reinforced Plastics
Virtual Engineering
Mechanical Engineering
Process Technology
Materials Science
Component Behavior (Modeling)
Surface Engineering of Plastics
Lightweight Construction
Natural Fiber Composites
Textile Research
1
R&D
Germany is home to 42 percent of all Euro-
pean OEM and tier 0.5 supplier automo-
tive R&D centers. This makes the country
the most important automotive develop-
ment activity location in Europe. German-
based suppliers and service providers
profit from close interaction with their
clients from the pre-development stage.
They can take advantage of joint research
activities with some of the worlds leading
automotive technology research institutes
and universities. Numerous innovation
clusters integrate industry, science and
education in automotive-related areas
including mechatronics, microelectronics,
mechanical engineering, manufacturing
processes, and material sciences.
Technology Leader
From machine building to electronics,
Germany is the technological leader in all
automotive-related industries.
Physical Infrastructure
Located at the heart of Europe, Germany
offers a sophisticated infrastructure that
integrates state-of-the-art transporta-
tion networks with the most modern and
cost efficient IT and telecommunications
systems available today. Not for noth-
ing is Germany Europes number one in
logistics. Germanys exceptional strength
in this area has been underlined by the
World Economic Forums (WEF) Global
Competitiveness Report 2008 in which
the German economy took first place
for infrastructure. It is this world class
infrastructure which supports the con-
tinued success of the highly efficient and
smooth operating automotive logistics
environment.
Incentives
Germany offers investment incentives of
up to 50 percent of capital expenditure. In
addition, extensive support is also pro-
vided for employment and R&D purposes.
Stable Investment Environment
Social, economic and political stability
all provide a solid base for your corpo-
rate projects. Our judiciary and civil ser-
vices are highly professional. Contractual
agreements are secure and intellectual
property is strictly protected in Germany.
Industry Overview 2008www.invest-in-germany.com 5
Automotive Industry-Related Networks of Competence in Germany
Dresden
Kiel
Potsdam
Stuttgart
Hanover
Mainz
Wiesbaden
Saarbrcken
Erfurt
Magdeburg
Schwerin
Dsseldorf
Munich
Berlin
Hamburg
Bremen
SWITZERLAND
FRANCE
THE NETHERLANDS
POLAND
CZECH REPUBLIC
BALTIC SEA
BALTIC SEA
BELGIUM
LUXEM-
BURG
Mecklenburg-Vorpommern
Brandenburg
Saxony-Anhalt
Saxony
Thuringia
Bavaria
Baden-Wrttemberg
Hessen
Saarland
Rheinland-Pfalz
North Rhine-Westphalia
Lower Saxony
Schleswig-Holstein
DENMARK
NORTH SEA
NationalBorder
(Federal)State Borders
(Federal)State Capital
City-State
Source: Federal Ministry of Economics and Technology, 2007
1
2
3
4
1
2
1
2
3
4
1
2
3
4
5
6
1
2
3
4
5
1
45
3
2 1 1
4
3
3
1
4
1
1
1
2
2
1
3
6
2
1
5
24
3
-
8/8/2019 Automotive Industry in Germany Invest in Germany
6/12
The Automotive Industry in Germany
6 Industry Overview 2008
Opportunities
No other country in Europe can boast a
comparable concentration of automotive-
related R&D, design, supply, manufac-
turing, and assembly facilities. No other
country in Europe provides the same new
investment opportunities offered by the
German industry.
- Within the next five years, 16 new vehicle
programs - representing an accumulatedvolume of more than two million units at
peak - will be launched in Germany. This
represents one third of all new program
launches in Europe within 2008 and 2012.
- German vehicle manufacturers are com-
mitted to delivering further CO2emission
reductions. The goal for 2012 is clearly
set by the European Commission - new
vehicles are to produce not more than
130 g/km by means of vehicle technology
improvements and other contributory fac-
tors. A further 10 g/km reduction is fore-
seen through other improvements and
increased use of bio-fuels. The industry
is building on the countrys longstanding
experience in environmental technologies
to secure a leading position in all fields of
sustainable mobility.
This approach translates into a strong
demand for innovative products that en-hance fuel economy and energy efficiency.
Powertrain solutions providers, battery
manufacturers, advanced materials (includ-
ing light metals and composites) suppliers,
and electronics systems suppliers are all
finding unique business opportunities in
Germany.
Germany
20
.4
Italy15
.3
France
11
.3
Spain10
.8
CzechR.
9.1
Belgium8
.3
Poland5
.4
Portugal3
.0
Sweden
2.0
UK1
.1
Source: European Light Vehicle Industry Forecast, Global Insight, 2007
No. of New Programs
Accumulated Peak Volume in 100,000 Units
New Vehicle Programs and Forecast Volumes
in European OEM Plants (SOP 2008 -2012)
16
12
7
54 4
1
3 3
8
- The industry is supported by an active
innovation policy and significant pub-lic investments. A total of EUR 15 billion
has been made available by the German
Federal Government for R&D projects
in cutting edge technologies. Applicable
research fields in the automotive industry
include: alternative fuels, fuel cell tech-
nology, alternative powertrain and energy
storage systems, active safety, vehicle-to-
X communication and traffic management
systems. All companies active in Germany
(regardless of country of provenance) are
eligible.
Mercedes-Benz Direct Hybrid concept vehicle
-
8/8/2019 Automotive Industry in Germany Invest in Germany
7/12
Industry Overview 2008 www.invest-in-germany.com 7
Incentives
Cash Incentives
Investment Incentives Package Operational Incentives Package
Reduced Interest
Loans
R&D IncentivesLabor-Related
Incentives
Public Guarantees
Investment GrantKfW Loans
(National Level)
State
Investment
Allowance1 State Development
Banks
Combined State/
Federal
GrantsRecruitment
Support
LoansTraining
SupportSilent/Direct
PartnershipWage Subsidies
+
1) only in eastern Germany
Types of Incentives
Source: Invest in Germany Research, 2008
Incentives for Investments
in the Automotive Industry
Germany offers numerous incentives for
all investors - regardless of whether they
are from Germany or otherwise. There is
a large selection of programs designed
to support a wide variety of business
activities at different stages of the invest-
ment process available. Support ranges
from cash incentives for the reimburse-ment of direct investment costs to incen-
tives for labor and R&D.
Germanys Investment
Incentives Package
Investors production facility set-up costs
can be significantly reduced using a num-
ber of different measures from Germanys
extensive investment incentives package.
The package consists of cash incentives,
loan programs offering reduced interest
rates and public guarantees at state and
national level.
The amount of these investment incen-
tives generally depends on three factors:
project scope, investor company size and
the new investment location. Investment
incentives can reach up to 50 percent of
eligible expenditures once these factors
have been considered.
BMW Leipzig plant,
central building:
Production BMW 3 Series
-
8/8/2019 Automotive Industry in Germany Invest in Germany
8/12
The Automotive Industry in Germany
8 Industry Overview 2008
Cash Incentives
The main instrument of Germanys invest-
ment incentives package are cash incen-
tives provided in the form of direct
investment grants. Germany will make
more than EUR 2.3 billion in cash incen-
tives available in 2008.
Investment grants are offered in sev-
eral incentive regions in Germany. Eligi-
ble investment costs include the purchase
or production costs of buildings, machin-
ery and equipment. The purchasing costs
of intangible assets are likewise eligible.
In general, investment projects must cre-
ate long-term jobs in order to benefit from
investment grant provision.
In eastern Germany, investment grants
are complemented by the Investment
Allowance (Investitionszulage IZ), which is
usually provided in the form of a cash pay-
ment and/or tax credit. As with investment
grants, eligible Investment Allowance
costs include the purchase or production
costs of buildings, machinery and equip-
ment. Because the Investment Allowance
is a tool specifically created to support the
eastern parts of Germany, all equipment
financed through the investment allow-
ance must remain in eastern Germany for
at least five years upon completion of the
investment project.
Interest-Reduced Loans
Special loan programs make up a second
component of Germanys investment incen-
tives package. They are offered by publicly
organized financial institutions.
These programs usually offer loans at
below-market interest rates and subordi-
nated loans similar to equity.
The provision of such loans makes it easier
for investors to access additional funding
from public banks.
Public Guarantees
The investment incentives package is com-
pleted by public guarantees. This tool is
offered by the state and the federal govern-
ment to help secure private bank loans.
VW plant Wolfsburg Golf GTI and Golf R32 production (body construction)
-
8/8/2019 Automotive Industry in Germany Invest in Germany
9/12
Industry Overview 2008www.invest-in-germany.com 9
Germanys Operational
Incentives Package
Labor-Related Incentives
Labor-related incentives are available
throughout Germany. The Federal Employ-
ment Agency and all German states offer
a range of different labor-related incentives
programs. They can be divided into three
main groups: programs focusing on recruit-
ment support, training support, and wagesubsidies respectively.
Incentives for R&D Projects
Germany offers several incentives pro-
grams targeted at reducing the operating
costs of R&D projects. Programs operate
at the regional and national level wholly
independent from investment incentives.
At the national level, all R&D incentives
programs are subsumed under the Fed-
eral Governments four-year High-Tech
Strategy. The High-Tech-Strategy defines
specific sectors with a high dependency on
new high-tech developments. Each sector
comprises various R&D programs. More
than EUR 770 million is available for R&D
projects in the automotive and traffic tech-
nologies sector.
The High-Tech Strategy: Sectors with Relevant Budgets 2006-2009 in EUR Million
Source: German Federal Ministry for Education and Research (BMBF)
3,650
2,000
1,180
800
770
640
430
420
420
310
300
270
250
220
150
80
50
Space technologies
Energy technologies
Information and communication tech.
Health research and medical technology
Automotive and traffic technologies
Nanotechnologies
Biotechnology
Environmental technologies
Materials technologies
Optical technologies
Plants
Aviation and aeronautical technologiesProduction technologies
Microsystems technology
Maritime technologies
Security research
Services
Most R&D projects related to the automotive industry are financed through programs
focusing on automotive and traffic technologies providing an incentives budget of
EUR 770 million. According to application focus, possibility exists to participate in
other funding programs (e.g. materials, production, microsystems, et al.).
German Aerospace Center (DLR), Automotive drive simulator
-
8/8/2019 Automotive Industry in Germany Invest in Germany
10/12
10 Industry Overview 2008
The Automotive Industry in Germany
Invest in Germany Closely Supports Your Project Management
Team throughout the Entire Investment Decision Process
Investment Decision Process Areas of Invest in Germany Support
Invest in Germany Helps You
Our teams of industry experts in the auto-
motive and related industries will assistyou in setting up your operations in Ger-
many. From design and engineering cen-
ters to manufacturing and assembly
plants, we can support your project man-
agement team from the earliest stages of
your expansion strategy.
We do this by providing you with all the
industry insider information you need
covering everything from automotive
markets and segments to industry trends
and the supplier landscape; automotive
technology R&D to industry regulation and
the domestic labor market.
Profit from our experience and know-
how to identify the investment location
which meets your specific investment
criteria. We help turn your requirements
into concrete investment site proposals,
providing free consultation services to
ensure you make the right location deci-
sion. We coordinate site visits, meetings
with potential suppliers, service provid-
ers, technology partners, universities
and other institutes active in the automo-
tive field. Our team of experts is at hand
to provide you with the relevant back-
ground information on Germanys tax
and legal system.
Invest in Germanys financial experts
help you create the appropriate financial
package for your investment and bring
you into contact with suitable financial
partners. Specialists provide you with
detailed information about available
incentives, support you with the applica-
tion process, and arrange contacts with
local economic development corporations.
Take advantage of our range of free of
charge services.
Investment Process Milestones
Invest
inGermanyKeySupportAreas
Strategy Evaluation Decision and Investment
Information
Consulting
and Project
Coordination
- General market information
- Industry guides/reviews
- Conditions for investment, e.g. economic data,labor mar ket,incentive programs, and tax & legal framework
- Proactive identification
of business opportunities- Identification of project-
specific location factors
- Discussion of marketentry strategies
- Advice on project financing
- Model calculationof potential incentives
- Cost factor analysis
- Identification of possibilitiesfor cooperation with suppliers,R&D institutes, technologypartners, etc.
- Organization of site visitsand fact finding missions
- Contact with the economicdevelopment corporations ofthe German states
- Support with finalsite decision
- Selection of project partners
and facilitators (serviceproviders,financial partners)
- Negotiations withrelevant authorities
- Assistance with the incentivesapplication process
- Seamless project handover
to the economic develop-ment corporation in theselected state
-
8/8/2019 Automotive Industry in Germany Invest in Germany
11/12
Picture credits Cover
Photograph: Daimler
Page 2 Germany is the Geographic and Economic Center of Europe
Graphic: www.typoly.de
Page 4 The Advantages of Germany as a Location for Automotive Investments
Photograph:
BMW Group
Page 6 Opportunities
Photograph: Daimler
Page 7 Incentives for Investments in the Automotive Industry
Photograph: BMW Group
Page 8 Incentives for Investments in the Automotive Industry
Photograph: Volkswagen
Page 9 Germanys Operational Incentives Package
Photograph: DLR Institut fr Verkehrssyteme
Imprint Publisher & Editor
Invest in Germany GmbH
Friedrichstrae 60
10117 Berlin
Germany
T. +49 30 200 099-0
F. +49 30 200 099-111
www.invest-in-germany.com
Managing Director: Michael Pfeiffer
Director Marketing Communications: Bettina Knape
Contact Automotive Industry: [email protected]
Conception, Layout, Text, Translations
Invest in Germany
Supported by
Federal Ministry of Economics and Technology
NoteInvest in Germany, April 2008
All information provided by Invest in Germany is for informational purposesonly and not legally binding. Invest in Germany does not accept liability for
inaccuracies or errors in translation.
-
8/8/2019 Automotive Industry in Germany Invest in Germany
12/12
About Us
Invest in Germanyis the inward investment
promotion agency of the Federal Republic
of Germany. We assist and advise potential
investors interested in Germany. Foreign
enterprises planning to establish theirbusiness operations in Germany can ob-
tain information on the business environ-
ment, such as the corporate investment
framework, tax regulations, and subsi-
dies.
Our range of services includes strategic
planning, market research and competi-
tive analysis. Our experts provide compre-hensive project management and support
services from site selection to the final
realization of the investment. All inquiries
are kept confidential and our services are
free of charge.
We support investors from our headquar-
ters in Berlin and from our offices in the
US, China, and Japan.
Headquarters
Invest in Germany GmbH
Friedrichstrae 60
10117 Berlin
Germany
T. +49 30 200 099-0
F. +49 30 200 [email protected]
www.invest-in-germany.com