Sunday June 27th 2021
Electric, global, expansive
The German auto industry is so fit
From Helmut Becker
The German automotive industry is the measure of all things when it comes to combustion engines. But the structural change towards electromobility is shaking the supremacy, and calls for doom are loud. But what is the situation really like with the corporations?
The death of the valley for the German auto industry has fallen silent. On the contrary: auto stocks are in demand again – and the auto industry is the driver of the economic upturn. So is the industry back on the road to success? No, because she never left it! There are several reasons and empirical evidence for this.
On the one hand, the recovery of the world’s largest automobile sales markets, China and the USA, is in full swing, with only Europe lagging behind. The Chinese automotive market has not only overcome the Corona crisis, no, it is booming. For economic experts, this is a sure sign that car sales will also grow strongly in the rest of the world. What is certain is that Corona has not fundamentally impaired the need for cars, but has only pent up. So the auto industry remains a growth industry. So much so that the German has even made an above-average contribution to the economic recovery.
Burners out – electrics in
On the other hand, the German automobile manufacturers have meanwhile overcome the transformation shock – combustion engines out, electrics in. All corporations have supplemented their traditional combustion technology in no time at all with pure electric drive with a battery (BEV) or as a plug-in hybrid with additional electric drive (PHEV). The public condemnation of combustion engines – and the hype surrounding the electric car pioneer Tesla – was thus grudgingly taken into account. Rational arguments, such as that fossil fuel and not engines are the problem, were not asked for.
Electromobility was the top priority; politically highly subsidized, it ensured that the German auto industry was suddenly left empty-handed. And the greenhorn Tesla grew into an IT specialist and a serious and ambitious competitor who even dared to set up one of its factories in the automotive motherland. Tesla was widely regarded as technologically unassailable and as the best proof of the roughness and backwardness of the German auto industry. What a fundamental error! Because the world market sees it completely differently.
The world market tells you where to go
Despite the electric hype and Tesla, the global market share of German car production has increased continuously until recently – even during the Corona crisis. And until recently it has grown to almost a quarter of world production. For more than half a century, German manufacturers have been gaining market share, although the world market has become increasingly competitive over the past twenty years due to Japanese and Korean competitors.
Every fifth car built in the world today bears a German trademark. However, only every twentieth vehicle rolls off the assembly line in Germany. The proportion has halved within twenty years.
This shows that the German auto industry has never left the road to success. On the contrary, it has become increasingly global and, thanks to the electric push, has gained in breadth and depth as well as in overall international competitiveness.
Fed up with German success factors
How was that possible? Fundamental location factors such as a cosmopolitan and innovative management or highly qualified and performance-oriented employees, including their organizations, were the basic prerequisites for the successful course in the last decades. The political framework conditions that have so far always been favorable across party lines for the car product and its manufacturers are also among the success factors.
In recent years, however, there have been three main factors to which the industry owes its strong global market position today: efficient management of the corona crisis; a far-sighted development of the Chinese market and a high level of flexibility including successful adaptation and integration of electric mobility.
The last point in particular deserves attention, because German manufacturers are surfing the top of the electric wave. New German electric models appear on the market every month. According to the industry association VDA, there should be a total of 150 at the end of 2021. Within a short period of time, Germany and the German automotive industry have become the driving force behind the marketing of electric cars.
In the meantime, the industry has become a leader in electromobility in both Europe and the USA, and Germany has moved up to become the second largest single market for electrified cars after China – with a leading role for other markets. This shows that, contrary to what has often been predicted, the German auto industry did not oversleep the new technology, but took off at exactly the right time.
Stronger than ever
As a result, it can be said that the German auto industry has never been as technologically strong as it is today! It masters everything: Gaps, electronics, combustion technology alone or in combination with an electric drive. It is at home in all markets in the world. And it has a leading position in the largest world market for automobiles: China.
Conclusion: The German auto industry is strategically stronger than ever in the summer of 2021. Which does not imply that it has to stay that way in the long run.
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