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Economy Study: Car Industry in Germany Is Barely Growing Any More

Editor: MA Alexander Stark

According to an analysis published by management consultant firm Ernst & Young, the German automotive industry barely grew last year. However: While manufacturers' sales dropped, suppliers registered an increase in turnover.

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The automotive industry is hardly growing any more, a study conducted by the consulting firm Ernst & Young concludes.
The automotive industry is hardly growing any more, a study conducted by the consulting firm Ernst & Young concludes.
(Source: Daimler)

According to a study, the automotive industry in Germany barely grew at all last year. Nevertheless, manufacturers and automotive suppliers hired thousands of new employees. According to an analysis conducted by management consultant firm Ernst & Young (EY), which was published on February 27, the industry in Germany generated total sales of almost 425 billion euros in 2018. After a significant spike in the previous year, the 2018 results only represented a plus of 0.4 %. At the end of the year, exports were even in the red. According to the study, however, the number of employees grew by 1.7 % with a year to around 834,000 and thus once again reached a new high.

The fact that, in view of the adverse general conditions - such as the trade dispute between China and the USA or the problems with the WLTP conversion - sales could be kept at approximately the same level as in the previous year, can certainly be regarded as a success. However, this was only possible thanks to the good development of the Chinese sales market. According to EY, last year rose by 14 percent against the trend, making China the second most important export market for the German automotive industry.

Other important sales markets, on the other hand, underperformed: Exports to the United States - still the most important foreign market - fell by five percent. The decline in exports to Great Britain was even more pronounced; a year ago it was still the second most important export market for German manufacturers and suppliers: Exports to the UK declined by 10%.

The calculations are based on data gathered by the Federal Statistical Office and the Federal Employment Agency on the automotive industry in Germany. Sales made by the German corporation abroad or products that they deliver from there to other countries are therefore not included.

Suppliers Do Better Than Manufacturers

If the car manufacturers and suppliers are considered separately, the study even shows a diametrical development. A 0.2 % drop in manufacturers' sales was mirrored by a 2.1 % increase in the sales of automotive suppliers - only in Germany, mind you. The number of employees also rose more strongly at supplier companies.

EY expert Peter Fuß also considers 2019 to be a difficult year, not only because large sales markets are faltering. US special duties and a disorderly Brexit should, if they come, lead to considerable losses in Germany as a business location, Fuß said. In addition, the current employment growth is probably not sustainable.

This article was first published by Automobil Industrie.

Original: Svenja Gelowicz / Translation: Alexander Stark

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