Start-ups are an important innovation factor for medium-sized automotive companies in Germany

    Start-ups and automotive SMEs

    Press release

    Press release

    Berlin, May 22, 2023

    Six out of ten medium-sized automotive companies already cooperated with start-ups Main goals: further develop product portfolio and gain access to new technologies

    A current survey by the German Association of the Automotive Industry (VDA) in cooperation with the German Economic Institute (IW) shows: 60% of the medium-sized automotive companies surveyed have already worked with start-ups. This means that six out of ten companies have already leveraged the potential of a cooperation between established companies and start-ups to carry out innovations and advance the digitization of the industry.

    Companies see the greatest potential in research and development. Many of the companies surveyed are very receptive to new technologies on the market: 44% state that they invest in experimental concepts, even if there is a risk of a bad investment.

    Purchase of products and services most common form of cooperation

    The most common form of cooperation among the companies surveyed that cooperate with start-ups is the purchase of products or services from start-ups: 70% state that they cooperate with start-ups in this way. Cooperation in projects or in the creation of prototypes has a similar value: With a share of 68% of the companies, this form of cooperation is almost on a par with the purchase of products and services. Participation in start-ups is also common at 51%. This form of cooperation – which is mainly cultivated by larger companies – is apparently more attractive for companies in the automotive industry than joining forces with start-ups to form a joint venture (38%). Companies with 500 employees or more and companies with more than €100mn in sales are more likely to invest directly in start-ups and buy company shares than companies with less sales.

    Start-up cooperation often enriches corporate culture

    The survey results show that the companies surveyed from the automotive industry are pursuing many different cooperation goals. It also shows that most of the goals pursued by the companies are largely or at least partially achieved.

    74% of the companies surveyed state that expanding the product portfolio has been at least partially, if not largely or completely achieved. No other goal has a higher value. Second comes access to new technologies, which is at least partially achieved by 70% of the automotive companies surveyed. 34% alone state that they have largely or completely achieved this goal - the highest degree of all.

    The survey shows: 66% of the companies surveyed can strengthen their ability to innovate through cooperation with start-ups. Only 6% of the companies rather don’t achieve this goal or not at all. However, 19% of the automotive companies state that they do not want to increase their ability to innovate through such cooperations.

    More than half (55%) of the automotive companies surveyed can enrich their corporate culture through start-up cooperation. And 53% of the companies can further develop their business model through cooperation with start-ups.

    In times of a shortage of skilled workforce, cooperation with start-ups could be a way of gaining access to skilled workforce. After all, 32% of the cooperating parties actually get access to specialists through the cooperation.

    From the point of view of medium-sized companies, obstacles that can make cooperation difficult or even prevent it are above all a lack of resources, an unclear cooperation benefit and differences between the (potential) cooperation partners.

    67% of the companies see an obstacle in the uncertainty regarding the maturity, reliability or probability of survival of the start-up. Companies in the automotive industry in particular have been successful in the market for decades and have built up a long-standing, solid cooperation network. By contrast, start-ups are often volatile and fast-moving by nature. So it seems understandable that many companies have problems dealing with the uncertainty that may accompany cooperation with start-ups.

    Funding instruments may tackle problems here. A support measure for establishing cooperation with start-ups could be state-funded vouchers specifically for small and medium-sized companies, which they could use to invest in start-ups. 35% of the companies surveyed indicated a lack of state financial support as an obstacle.

    Press Office

    Moritz Schmerbeck

    Spokesperson with focus on technology and innovation