Factors Affecting Automotive Industry in Germany

The origin of the automotive industry in Germany can be traced back to 1886 when Karl Benz registered his first vehicle that was powered by gas. Germany is renowned to be the home of the first four-stroke internal combustion engine in the world and continues to enjoy a unique placement in the international automotive industry. Currently, it accounts for 17% of the total global passenger car production with its OEMs. Besides, it should be noted that Germany is the sole largest auto market in the entire Europe.

Over the years, the German automotive Industry has been doing well in the global automotive sector. However, a crisis hit the industry in 2009 when the global economic production fell. This was the first time that such an incident was taking place in six decades. The drop mainly hit the commercial vehicles production dropping the in international production by 9%. This did not go down well with the automotive industry in Germany as profits got held up and production also stalled.

Just like most industrialized nations across the globe, Germany’s automotive industry was also hit by the international financial crisis experienced in modern times. The crisis negatively affected the demand and supply trends in the market, impacting the industry negatively. Even though it did not stop the manufacture of automobiles in Germany, it stalled the progress.

Today, the automotive industry in Germany can be said to have successfully made its way out of the international recession. The sector has been able to recover and achieve solid growth in the aftermath of the crisis. In fact, this was clearly evident when the German automotive industry issued an affirmation of its position as the mainspring for the country’s national economy. Today, almost a fifth of the total sales derived from the overall manufacturing sector in Germany is from the automotive industry. In the 1990s, this share only lagged at about 13%.

Technological advancement is a factor that has enabled German automotive industry to experience significant growth over the years. Germany’s introduction of OEMs created a new trend in terms of demand of cars across the globe. In the recent years, the automotive industry has re-invented them to suit the needs of various car buyers around the world with much emphasis on brand management and market leadership. This has enabled the automotive industry in Germany to stay well ahead of the rest in a congested international market.

The automotive industry in Germany has also been able to steadily sail to the top because of its focus on manufacturing cars that meet the needs of various drivers in the market. When the demand for smaller and more energy efficient medium-range passenger cars began to take an upward trend, Germany had already began manufacturing them well in advance. This significantly propelled the industry to the top in the international automotive market.  The ability of the industry to manufacture cars that meet the need of different drivers is an advantage that has enabled the industry to experience unmatched growth over the years.

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