Resilient German automotive industry defies odds, exports drive growth trajectory

The German automotive sector has experienced a notable recovery following the conclusion of the pandemic, with exports exhibiting particularly robust growth for car manufacturers. The automotive industry in Germany is said to be one of the largest employers in the world.

Germany's automotive industry stands as a global beacon of excellence, renowned for its unparalleled engineering prowess. From Asia to the Americas, German automobiles epitomise cherished qualities of innovation, dependability, safety, and aesthetic design.

The automotive sector is heavily influenced by a select few countries where major Original Equipment Manufacturer (OEM) operations are based, contributing significantly to global vehicle production. These nations include China, the United States, Japan, India, South Korea, and Germany, holding substantial sway in the industry. Economic downturns within these countries profoundly affect the broader industry ecosystem, potentially impeding growth and leaving a noticeable mark on its trajectory.

Hui Zhang, the Managing Director of NIO Germany GmbH, said, "The automotive sector is the backbone industry in Germany, and the German automotive industry is a global leader. Germany is also one of the strongest countries in the world when it comes to high-tech automotive products, including autonomous driving technology."

Germany has gained worldwide recognition for its prominent automobile manufacturing sector, boasting renowned companies like Volkswagen, BMW, Mercedes-Benz, and Audi. This industry has played a pivotal role in Germany's economy, generating substantial employment opportunities and serving as a cornerstone of its economic prosperity. With a rich history and profound influence, the German automotive sector has left a lasting imprint on the global automotive industry.

German automotive industry's economic prosperity 

Recovery is underway in the German automotive sector

The German automotive sector has experienced a resurgence post the Covid pandemic. After a period of decline between 2016 and 2022, local automotive production has rebounded and currently stands approximately 10 per cent below its pre-pandemic levels. At its lowest point, production had plummeted by around 35 per cent.

A contributing factor to this recovery is the boost in exports, with the proportion of net exports of motor vehicles in the gross domestic product (GDP) now back to its 2018 level, reaching 2.9 per cent in 2023.

Germany's push for sustainable mobility

The German automotive sector is experiencing a resurgence following the challenges posed by the pandemic, propelled by a comprehensive range of progressive initiatives set to revolutionise both the industry and future modes of transportation. Substantial investments in autonomous driving, battery research and development, and extensive expansion of charging infrastructure and electric vehicle incentives fuel optimism in the revitalised sector.

The government has established ambitious targets for adopting electric vehicles and is providing incentives to encourage the purchase of such cars. German automotive manufacturers are investing significantly in electric vehicle technology to compete effectively in this expanding market.

Global Aluminium Industry Outlook 2024

The recently published industry-focused "Global Aluminium Industry Outlook 2024" has revealed the prediction that transportation will be the key demand for aluminium in 2024, and electric vehicles will play a role in this demand generation. 

Growing premium car market

In the coming decades, the premium market segment is poised to experience a significantly swifter expansion compared to the overall passenger car segment on a global scale. This surge is primarily ascribed to the escalating international appetite for upscale, premium small- and compact-sized vehicles alongside premium SUVs.

Premium car production by country 2021 (%)

Germany stands out as a powerhouse in the automotive industry, boasting some of the world's foremost producers of premium automobiles. Virtually all German automakers and those with operations in Germany have either introduced or are planning to introduce new offerings tailored to cater to the demands of the premium segment. Leveraging the expertise derived from the country's rich automotive manufacturing heritage, Germany is set to fortify its position as a preeminent hub for international automotive production.