Germany Autos Report Q1 2012

The effects of the economic slowdown are beginning to be felt in the German automotive market with ten-month cumulative vehicle sales growth slowing for both the passenger car and commercial vehicle segments. We expect both consumer and business sentiments to take a hit from the state of the global economy, further tightening of Germany's labour market and Germany's involvement in any future bailout measures. In line with this view, we maintain our end of year forecast for total sales growth of 8.3% y-o-y to 3.46mn units in 2011, which we expect to be followed by a moderate 3.8% growth to 3.59 units in 2012.
We also expect to see significant resistance to production growth in Germany, both in the short and the long term. In the short term, increased raw material prices and the pace of recovery in the overall European market will limit production growth. In the longer term, BMI believes the hike in production costs in the country will provoke a need for German carmakers to increase their exposure to non- European markets. This will limit production growth to an average 3.3% y-o-y between 2012 and 2016. Despite limitations in its growth potential, Germany occupies an impressive third position in BMI’s Risk-Rewards Ratings for the autos industry in Europe. Key factors that support Germany in this position are a stable regulatory environment, the size of its autos market and relatively strong consumer confidence. Although a more robust recovery in the Russian market has meant it overtaking Germany in our ratings, we believe Germany will remain an attractive, if difficult, destination for new entrants.
It is partly owing to these factors that Germany is increasingly being used as a base for high-value manufacturing, particularly that related to environmentally friendly vehicle technology. BMW and Daimler have announced investments of EUR400mn (US$552mn) and EUR90mn (US$124mn) respectively in and around Leipzig. In October 2011, Porsche started work on a EUR500mn (US$691mn) investment in expanding its Leipzig plant. The expansion is aimed at preparing for the production launch of the company's small Cajun SUV, which is due in 2013. CEO Norbert Reithofer cited the presence of a ‘tried-and-tested production network and high levels of education and outstanding competencies’ as backing for the choice of location.
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Executive Summary 5
SWOT Analysis 6
Germany Autos SWOT 6
Germany Political SWOT 7
Germany Economic SWOT 7
Germany Business Environment SWOT 8
Table: Passenger Car Sales (Units), January_September 2011 9
Regional Overview 12
FTAs Will Boost Already Strong Import Sales 12
Table: Europe – Top Automotive Suppliers Sales By Region (US$mn), 2010 14
Table: BMI Industry Risk-Reward Ratings For Autos In Europe 19
Macroeconomic Forecast 20
Table: Germany - GDP By Expenditure, Current Prices Breakdown 23
Industry Forecast Scenario 24
Table: German Autos Sales – Historical Data And Forecasts 24
Production 25
Table: German Autos Production – Historical Data And Forecasts 26
Trade 27
Table: German Autos Trade – Historical Data And Forecasts 27
Historical Background 28
Major Industry Players 30
Table: German New Vehicles Sales By Brand 30
Industry News 31
Passenger Cars 33
Table: German Passenger Car Segment – Historical Data And Forecasts 33
Competition In The Luxury Segment 33
New Investments 34
Company News 35
The Alternative Fuel Race 40
Commercial Vehicles 43
Table: German Commercial Vehicle Segment – Historical Data And Forecasts 43
Segment Trends 44
New Investments 45
Company News 45
Table: Timeline For MAN-Scania Merger 46
Motorcycles 48
Table: German Motorcycles Segment – Historical Data And Forecasts 48
Segment News 49
Suppliers 52
Company Profiles 55
Volkswagen (VW) 55
BMW 56
Mercedes-Benz 57
Robert Bosch 58
Continental 59
BMI Methodology 61
How We Generate Our Forecasting Model 61
Sources 62
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