German car industry electrifies amid shifting global dynamics
Analysts at Pekao emphasise the fundamental changes in the German automotive industry. The latest data indicates a growing surplus in the trade of electric vehicles, which now comprises about half of the total surplus in the automotive sector.
An analysis of data from Oxford Economics and Destatis reveals that the export of German electric vehicles has been consistently increasing since 2017, with a stable level of imports from China. This trend is particularly evident in exports to countries other than China, which have shown a steady upward trajectory in recent years.
Transformation of the automotive sector
An Allianz report, in contrast, highlights profound structural changes in the German automotive industry. Manufacturers are confronted with a triple challenge: tariff threats from the USA, growing customer expectations for internet-connected cars, and a technological gap in the realm of electric vehicles.
Data regarding employment is particularly concerning, as the automotive industry experiences significant downsizing. Robert Bosch plans to lay off 3,800 employees, Schaeffler 2,800, and ZF Friedrichshafen between 11,000 and 14,000 people.
Prospects for the industry
The German automotive industry faces the necessity of a fundamental transformation. The primary challenge is maintaining competitiveness amidst rising energy costs and price pressures from Asian manufacturers. According to the Allianz report, over one-third of German industrial companies are curtailing investments in core production processes due to high energy costs.
In a broader context, the export of traditional German cars (combustion and hybrid) is on a downtrend, while the segment of electric vehicles is witnessing growth. This suggests a profound transformation of the entire automotive sector towards electrification.
An analysis of trade data also indicates shifting dynamics in relationships with key trading partners. While exports to China exhibit signs of stabilisation, the American market is becoming an increasingly important destination for German car manufacturers.
