Economic Policy and Infrastructure

Trade

Access to foreign markets is essential for companies in the automotive industry. Apart from the US market, growth mostly took place in the markets outside the triad countries in Eastern Europe, Asia, Latin America and other threshold countries with rising levels of motorization.

Trade and investment policy

The German automotive industry has a global footprint, with more than 2000 production sites abroad. Germany depends on exports and open markets. More than 75 percent of passenger car production in Germany is exported. That is why access to foreign markets is a key topic for the German automotive industry.

The global growth in individual mobility, but also the existence of barriers to market entry, have prompted Germany’s automotive industry companies to increase the number of their production sites abroad. Since 2010, German manufacturers have been producing more vehicles abroad than they do in Germany. Whereas only 4.2 million passenger cars were produced abroad ten years ago, today it is around 9.3 million. Contrary to many other European countries, Germany has managed a slight increase in domestic production (from 5.2 to 5.6 million passenger cars). Nevertheless – the big growth in production is abroad. Exports from Germany have been increased in parallel with the increase in foreign production. In the past ten years, they have risen from 3.6 to 4.3 million passenger cars.

This “twin-track strategy” of export and foreign production is a significant contributory factor to the German automotive industry’s success. Having said that, protectionist measures in many countries are making life increasingly difficult for exports. They constrain Germany’s competitiveness. We are not just talking here about high tariffs and import levies, which in India, for example, can exceed 100 percent. Numerous countries also attempt to increase or protect their own local value creation by imposing demands on imports and production. The upshot of such “artificial” location factors is a distortion of competition. Occasionally, they also prevent the development of an internationally competitive industry. The VDA therefore advocates a dismantling of trade barriers.

Angela Mans Head of Foreign Trade and International Relations

Tel: +49 30 897842-352  
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