Lead Markets and Innovative Products
Germany’s economic prowess is decidedly based on its industrial performance and its capacity for innovation. With around 833,000 jobs, the automotive industry in particular is considered a showcase discipline with regard to the Made in Germany seal of quality. With its six strong brands, namely Volkswagen, BMW, Daimler, and the VW-owned marques Audi and Porsche, as well as Opel (Groupe PSA), the automotive industry is one of the forces driving the global mobility sector. Nevertheless, the corona pandemic has caused considerable setbacks.
Drivers of R&D
Companies invest billions in research and development (R&D) to shore up the competitive edge of their business, including in difficult times. Electronic and digital networking, as well as assisted or self-driving cars, are the megatrends for automobiles. In global terms the German carmakers, which have a major share in the middle and luxury car segments, produced some 16 million cars in 2019, with around two out of three cars by German manufacturers made abroad.
Automotive, mechanical engineering and chemistry
Alongside the automotive industry, plant and mechanical engineering and the chemical industry are traditionally strong pillars of the German economy. Founded in 1865 and headquartered in Ludwigshafen, BASF, which has a payroll of around 118,000 employees working at 366 production sites in more than 90 countries, is the world’s largest chemicals company. Key sectors also include the electrical and electronic engineering industry, with global player Siemens active in more than 200 countries. Its application solutions, from mobility to renewable energies, are regarded as highly innovative.
The most important economic centres in Germany are major metropolitan regions such as the Ruhr area, Greater Munich and Greater Stuttgart (high-tech, automotive construction), Rhine-Neckar (chemicals, IT), Frankfurt am Main (finance), Nuremberg (industry, services), and Cologne and Hamburg (port, aircraft construction, media). In east Germany, small but efficient high-tech centres have emerged, in particular in the “beacon regions” of Dresden, Jena, Leipzig, Leuna, and Berlin-Brandenburg.
The list of Germany’s largest corporation (by turnover in 2019) is led and dominated by automotive groups: Volkswagen is in first place, with Daimler and BMW second and third, while the Schwarz and Aldi Groups (retail) occupy fourth and fifth places respectively. Also in the top ten are Siemens (electronics), Deutsche Telekom, Robert Bosch (technology), Uniper (energy) and Deutsche Post. Nevertheless, there are likely to be major changes in the German business landscape in 2020 as a result of the Corona pandemic.