2014 turnover: Record year despite adverse circumstances
Overall, the automotive industry in Germany can look back on a successful 2014. Notwithstanding a difficult economic and political environment, it managed to increase its turnover to 367.9 billion euros, reaching a new record level in the process. Almost two thirds of the turnover, 236.8 billion euros, was derived from export revenues. Domestic turnover totaled 131.2 billion euros. These developments illustrate that the German automotive industry has successfully maintained and built on its competitive position notwithstanding adverse circumstances.
German Motor manufacturers: Continued demand for "made in Germany"
Within the automotive industry pride of place went to Manufacturer Group I, namely the motor vehicle and engine manufacturers. With turnover of 284.8 billion euros, the companies in Manufacturer Group I accounted for 77 percent of the automotive industry total. On the domestic market, the manufacturers turned over 80.2 billion euros. Turnover from abroad was 204.5 billion euros. This underlines the German motor manufacturers' high level of export orientation and certainly also the outstanding global reputation of vehicles “Made in Germany.”
Suppliers: Through the 70 Billion euro turnover mark for the first time
The year 2014 also had a gratifying conclusion for the German supplier industry. It increased its turnover by 5 percent to 73.3 billion euros, thus breaking through the 70 billion euro mark for the first time. Contrary to the motor manufacturers, German suppliers generate the bulk of their turnover domestically, as their customers primarily operate in Germany. Export revenues in the past year however enjoyed a significantly more dynamic trajectory, posting an 8 percent increase to 27.4 billion euros. Domestic turnover grew by 3 percent to reach 45.9 billion euros.
Research and development: German automotive industry leads the world
In 2014 the automotive industry was once again Germany’s most research-intensive sector. In-house research and development (R&D) spending amounted to 17.6 billion euros. Compared with 2013, the German automotive industry boosted its R&D expenditure by 6 percent, contributing almost one third (31 percent) to the economy’s total R&D expenditure. In addition to boosting the efficiency of the conventional combustion engine, reducing CO2 emissions and optimizing (production) processes, R&D efforts focus on alternative drive systems, e-mobility, increased vehicle safety, vehicle networking, automated driving and/or the development of assistance systems.
A total of almost 93,000 R&D employees are beavering away in Germany on automotive innovations. That means that the automotive industry employs one quarter of the economy’s total R&D personnel. R&D also enjoys a high priority within the automotive industry’s core workforces in Germany – almost one in eight employees is engaged in this area. The automotive industry’s position as far and away the biggest investor and employer in the R&D arena underscores its importance to Germany as a technology center. This is the breeding ground of the innovations and technological know-how that underpin the industry’s international competitiveness.
In-house spending is supplemented by contracted-out R&D work, such as to R&D service providers (e.g., engineering service providers) or universities, but within the industry as well. This external R&D expenditure totaled 8.2 billion euros in 2013. In addition to their own efforts, therefore, German automotive industry companies also made heavy demands on R&D beyond their own corporate confines. This illustrates the major importance of the sector’s strong R&D networking, both within the industry and beyond.
German manufacturers and suppliers are also increasingly ramping up their foreign R&D capabilities, reflecting the automotive industry's increasing globalization. The German automotive industry's global expenditure in 2013 totaled 29.6 billion euros. That was 7 percent up on 2012. The automotive industry spent 13 billion euros of this abroad. Whereas only a good third, 5.6 million units, of the global output of German marques (14.7 million units) was produced domestically, the bulk of R&D (56 percent) still takes place in Germany. That means that especially in the strategically important R&D arena, companies still rate Germany highly. A critical contribution to this comes last but not least from Germany's excellent R&D infrastructure, with
a cluster of companies involved in research throughout the entire automotive value chain, together with universities, research institutes and highly qualified staff.
According to EU Commission data, the German automotive industry accounts for a good third (34 percent) of the industry’s total worldwide R&D expenditure – as such, it occupies pole position not only on the national stage, but in the international arena as well.
Employment Situation: Sustained growth in employment
The automotive industry once again demonstrated its importance to the German labor market in 2014, further increasing employment in its German-based companies. Midway through the year, core workforces numbered 774,900 employees. That was almost 3 percent higher, or 18,900 employees, than 2013. Employment peaked in November at 785,200 personnel.
The year 2014 saw growth in all three Manufacturer Groups. The motor manufacturers accounted for the bulk, with 447,200 employees. That was growth of 13,600 employees (a good 3 percent) in their companies’ core workforces. The supplier companies posted growth of almost 2 percent, or 4,500, to reach a total of 295,400 employees. In addition, trailer and body manufacturers employed 32,300 people last year. That was growth of almost 900 employees, or 3 percent, in the core workforces of the companies in this Manufacturer Group.
Growth in production volume in Germany, the factories’ high capacity utilization and the good export performance, especially to the EU and China, contributed to the positive employment growth in the German automotive industry. Globalization of production is an additional contributing factor as it is creating jobs in management functions or in research and development, for example. The automotive industry is therefore a good example of increasing local manufacturing in foreign locations creating and safeguarding domestic jobs as well.