Global Mainstream Car Market | Germany - Auto Market

Global Mainstream Car Market | Germany - Auto Market

Overview of the German Automotive Market

The German automotive industry has a history of over 130 years and is one of the pillar industries of the German economy. The development process of the German automotive industry can be roughly divided into five important stages：

1. Initial stage:

Since Karl Benz invented the first automobile in 1886, the German automotive industry has gone through a process from scratch. During this period, Germany's automobile industry began to take off, gradually forming the initial framework for automobile production. ‌

2. Development stage:

At the beginning of the 20th century, the German automobile industry experienced rapid development, especially between the two world wars, with a significant increase in German automobile production. During this period, the technology and design level of the German automotive industry have significantly improved. ‌

3. Challenge and Change Stage:

After World War II, Germany was divided into two parts, east and west, and the automotive industry was severely affected. The phenomenon of "illegal immigration" in East Germany led to a large number of automotive workers fleeing to West Germany, providing talent support for the development of West Germany's automotive industry. In addition, Ford's factory in Cologne was relatively "favored" during the Allied bombing, providing important support for the recovery of the West German automotive industry.

4. Globalization and Internationalization Stage:

With the development of globalization, German automotive companies have begun to go global, especially since the end of the 20th century. The German automotive industry has experienced a wave of asset restructuring and mergers, forming globally renowned car brands such as Mercedes Benz, BMW, and Volkswagen. The global layout of the German automotive industry has made it an important participant in the global automotive industry. ‌

In recent years, the German automotive industry has turned its attention to developing countries such as China, Brazil, and Russia, and the expansion of these markets has provided new growth points for the German automotive industry. At the same time, German automotive parts companies have also begun to establish wholly-owned or joint ventures globally, further promoting the globalization process of the German automotive industry. ‌

5. Electrification transformation stage:

Nowadays, the German automotive industry is in a critical stage of electrification transformation. The German Automobile Industry Federation stated that from 2023 to 2027, the German automotive industry will invest over 250 billion euros globally in the research and development of new energy vehicle technologies, and an additional 130 billion euros in the construction of new factories and the renovation of their equipment. ‌

In recent years, major German car companies have accelerated their electrification process to adapt to the development trend of the global automotive industry and the requirements of environmental regulations. ‌

For example, at the end of last year, BMW produced its last internal combustion engine at its Munich factory, which later transformed into an electric vehicle production base. It is reported that BMW plans to design all its models as hybrid or pure electric vehicles by 2025; Realize electrification of all M models by 2030.

At present, BMW's electrification transformation strategy has achieved phased results. According to the 2023 financial report, BMW sold over 560000 new energy vehicles worldwide, with pure electric vehicle sales exceeding 375000 units, a year-on-year increase of 74.2%, achieving the established target of pure electric vehicle sales accounting for about 15% of the group's total sales. The Chinese market has contributed significantly to BMW's pure electric vehicle sales, with approximately 100000 units delivered in 2023. ‌

Coincidentally, Volkswagen is also striving to advance its vehicle electrification process. And China plays an important role in the process of mass electrification transformation.

It is reported that Volkswagen's goal is to provide no less than 30 pure electric models in the Chinese market by 2030. This plan reflects Volkswagen Group's emphasis on the Chinese electric vehicle market and its determination to accelerate the transition to electrification. In order to achieve this goal, Volkswagen Group has taken a series of measures, including improving its localization research and development level in China, strengthening cooperation with local Chinese enterprises, and investing in research and development. ‌

In terms of cooperation with local Chinese enterprises, Volkswagen and Xiaopeng's Volkswagen brand models, as well as Audi's brand models in cooperation with SAIC, will be launched on the market in 2026. In addition, Volkswagen has collaborated with Horizon Robotics to develop autonomous driving technology, with Zhongke Chuangda to develop information entertainment systems, and with Shanghai Muchuan Industrial Design to enhance user experience. ‌

In terms of investment in strengthening research and development: Volkswagen plans to invest 2.5 billion euros in Hefei to enhance research and development. This is Volkswagen's largest research and development center outside of its headquarters in Germany, which will focus on the development of intelligent connected vehicles. As an important interface for connecting joint ventures and local partners, VCTC will undertake key development tasks for Volkswagen. ‌

From the difficulties in the initial stage to the success of globalization, and then to the new transformation of electrification, the development process of the German automotive industry is full of ups and downs and changes, as well as countless challenges and opportunities.

After years of development and accumulation, Germany has become a world automotive powerhouse and has formed multiple global leading car companies and brands.

The leading domestic car companies in Germany mainly include Volkswagen AG, BMW Group, Mercedes Benz, Wiesmann, and others.

These car companies have established their own extensive automotive brands in various segmented markets. Among them, Volkswagen AG has the most diverse number of car brands and has a high level of recognition worldwide. For example, Volkswagen, Audi, Porsche, Lamborghini, Bugatti, Skoda, Seat, Bentley, Scania, Ducati, and MAN, among others.

In 2016, Volkswagen Group achieved global sales of 10.31 million vehicles, surpassing Toyota to become the world's largest automaker and maintaining its position as the world's number one for four consecutive years. This achievement marks Volkswagen Group's leading position in the global automotive market, and also reflects the successful implementation of its multi brand strategy, as well as the popularity of various young and attractive car models among a large number of consumers around the world. ‌

In 2023, Volkswagen Group's global sales reached 9.24 million vehicles, a year-on-year increase of 12%. In the field of pure electric vehicles, Volkswagen Group's global sales reached 770000 units, a year-on-year increase of 35%.

According to data released by Volkswagen Group, its largest sales market is Western Europe, with a delivery volume of 3.27 million vehicles, a year-on-year increase of 21%; Next is the Chinese market, with sales of 3.236 million vehicles, a year-on-year increase of 1.6%; The third is the North American market, with cumulative sales reaching 990000 units, an increase of 18% year-on-year.

BMW Group's car brands include BMW, Rolls Royce, MINI, BMW M, BMW i, BMW Motorrad, and more.

In 2023, BMW Group delivered 2555341 BMW, MINI, and Rolls Royce cars to global customers, a year-on-year increase of 6.5%, setting a new historical sales record for the company.

At the same time, BMW Group's electrification transformation is also maintaining a fast growth rate. In 2023, BMW Group's global delivery of pure electric vehicles surged by 74.4% year-on-year, reaching 376183 units. Achieved the established target of pure electric vehicle sales accounting for approximately 15% of the group's total sales. Adding the plug-in hybrid models delivered throughout the year, BMW Group will sell over 560000 new energy vehicles in 2023, a year-on-year increase of 30.5%.

In the Chinese market, BMW Group's performance is equally impressive. In 2023, BMW Group delivered a total of 824932 BMW and MINI cars in the Chinese market, a year-on-year increase of 4.2%. Among them, BMW's pure electric vehicle models have shown impressive sales performance, delivering nearly 100000 units throughout the year, becoming an important pillar of BMW's overall sales growth. Especially in November and December of last year, BMW's pure electric vehicle models sold over 10000 units in a single month for two consecutive months. ‌

At present, Mercedes Benz Group AG has not yet provided a clear report on its full year sales in the European market for 2023. In terms of the Chinese market, Mercedes Benz will sell 768000 vehicles in 2023, accounting for 30.4% of the global sales share. ‌

These car brands have helped the automotive industry become a powerful engine for Germany's economic growth.

In 2023, new car sales in Germany exceeded 2.84 million units, a year-on-year increase of 7.3%. The growth rate of gasoline car sales was the most significant, with a year-on-year increase of 13.3%, reaching 979000 units. This strong growth means that gasoline and diesel vehicles have seen an increase in their market share after years of relative decline. ‌

In contrast, the sales of pure electric vehicles increased by 11.4%, reaching 524000 units; The sales of plug-in hybrid vehicles have decreased by more than half, to only 176000 units. ‌

In terms of market share, according to current data, in December 2023, the electric vehicle market in Germany will account for 30%, with pure electric vehicles accounting for 22.6% and plug-in hybrid vehicles accounting for 7.4%.

In addition, in 2023, the total production of passenger cars in Germany will be about 4.1 million units, of which about three-quarters will be exported, with a total export value of 164 billion euros.

According to data from the German Federal Statistical Office, the production of electric vehicles in Germany is expected to reach approximately 973000 units in 2023, a year-on-year increase of 59.9%. In terms of electric vehicle exports, Germany exported about 786000 pure electric vehicles in 2023, a year-on-year increase of 58.0%, which is more than two and a half times that of two years ago, accounting for about a quarter of Germany's new car exports and worth 36 billion euros. The main export destinations are the Netherlands with approximately 122600 vehicles (15.6% of the total), followed by the United Kingdom with approximately 105300 vehicles (13.4% of the total) and Belgium with approximately 97500 vehicles (12.4% of the total).

In 2023, Germany imported approximately 446000 electric vehicles, an increase of 23.5% from the previous year, valued at 14.1 billion euros. The majority of imports come from China (about 129300 units, accounting for 29.0% of the market share, more than doubling from 2022), followed by South Korea (about 44200 units, accounting for 9.9% of the market share) and the Czech Republic (about 41500 units, accounting for 9.3% of the market share).

In 2023, the German automotive industry will achieve sales of approximately 470 billion euros, accounting for around 4.5% of Germany's GDP. The German automotive industry directly employs about 790000 people and indirectly creates millions of job opportunities.