German automobile production on the upswing

 

  • Berylls experts believe that German automotive production will grow significantly faster than GDP in the coming years.
  • Dependence on the premium sector and the risk of production being shifted abroad are risk factors for growth.
  • Compared to current production volumes, Berylls ideally expects an increase of 13 percent by 2030.
  • If the expected positive effects do not materialize and the volume falls, a negative effect on GDP of almost two percent can be expected in the worst-case scenario.
  • The course must be set in the right direction today, and de-bureaucratization is an essential part of this.

At the turn of 2023/2024, the German economy is characterized by pessimism, at least if you believe the German Economic Institute (IW). The reasons for this are multi-layered. They include the weakening global economy, interest rate hikes, but also uncertainties regarding the federal budget. In addition, confidence in Germany as a business location is waning, not least due to the abrupt end of the e-car subsidy. A lack of reliable framework conditions and the shortage of skilled workers make it difficult to look ahead to 2024 with optimism. Nevertheless, the Berylls experts see reason for cautious optimism in the automotive industry.

After all, following many low points in the recent past, the German automotive industry has returned to a path of growth. Stefan Schneeberger, production expert at Berylls: "In the coming years, German vehicle production will grow by 2.5 percent per year, significantly faster than real gross domestic product (GDP), which is forecast at 1.4 percent per year. If we assume this growth, 5.3 million vehicles will be produced in Germany in 2030, compared to 4.3 million last year." Growth of 24 percent is expected by 2030, which is significantly higher than in China. The increase in vehicle production there will be 17 percent in the same period.

However, the production figure given for Germany represents an average value that lies within a corridor with a considerable range. This is because the automotive industry in Germany is facing two major challenges. Firstly, its transformation towards e-mobility and secondly, industrial policy upheavals. These include the wars in Ukraine and the Middle East, as well as increasing market protectionism in the various regions of the world.

Relocations of production and negative effects on business models could be the consequences. They would cause domestic production to shrink by up to 32 percent, as the Berylls analysis suggests. In the best-case scenario, however, six million vehicles will be produced in Germany in 2030, an increase of 13 percent compared to the assumed average. In reality, however, the production volume will not increase at the domestic OEMs, but almost exclusively at Tesla’s plant in Grünheide near Berlin. On average, German manufacturers are not planning any growth in local production and are also heavily dependent on developments in the premium segment.

Another problem for the domestic industry are manufacturers that are setting up operations in neighboring European countries. The announcement by BYD is a good example of this. The Chinese manufacturer is planning a plant in Hungary and will supply Europe with comparatively affordable vehicles from there. However, to ensure that Germany remains an important location in the future, it would be desirable to invest in local production sites or for new manufacturers to locate their European production in Germany, similar to Tesla.

It would be the task of a committed industrial policy to set the course for this. This certainly includes cutting red tape from many processes. In contrast, the Berylls experts see the temporary introduction of an industrial electricity price as unhelpful.

If the automotive industry shrinks in Germany, this will have an immediate and significant impact on GDP. The worst-case scenario forecast by Berylls, with a decline in production of 1.7 million vehicles by 2030 (measured against the mean value), would have a negative effect on GDP of 1.6 percent.

To prevent this downturn, all relevant players are called upon to take effective countermeasures. The OEMs alone cannot achieve this.

Über Berylls by AlixPartners

The Berylls Group’s services are fully dedicated to the automotive industry. Our experts in Germany, China, Great Britain, South Korea, North America and Switzerland understand the industry’s key challenges and are developing ways to achieve sustainable success in the automobility eco system. We use advanced digital strategies and other innovative approaches. Our professionals are networking across five specialised units to offer our clients end-to-end support, from strategy development to the implementation. We call this network our Berylls Quintet:

Berylls Strategy Advisors – The expertise of our top management consultants extends across the entire automobility value chain – from long-term strategic planning to operational performance improvements. Based on Berylls’ automobility thought leadership, our consulting teams stand out in view of their broad experience, their profound industry knowledge, their innovative problem-solving competence and their entrepreneurial thinking.

Berylls Digital Ventures – Our clients’ strategic concepts require the development and operation of digital products or the implementation of new business models. The Berylls Digital Ventures team works with our clients to take up this challenge – end-to-end. At the same time, we also invest in promising start-ups and bring our own digital solutions to market, providing these ready-to-use for our clients.

Berylls Mad Media – The radical digitalisation of the customer interface undermines the boundaries in the automotive sales model. Our Berylls Mad Media experts develop and operate tailored solutions, including datadriven marketing, integrated service designs, and including the agile realisation of integrated process and IT architectures. We strengthen customer loyalty, market exploitation, and profitability – taking vehicles and services to market digitally.

Berylls Equity Partners – is a private investment company. Supported by strong anchor investors and pursuing an entrepreneurial approach, we acquire, operationally improve operationally, and furnish with a longterm strategic direction companies with value potential in the mobility industry.

Berylls Green Mobility – We believe that sustainability will deliver competitive advantages in the real world of the global automobility business. Whether in an advisory capacity to external clients and other Berylls entities or through our electric vehicle charging service Wall-E – the first free-to-the-user e-mobility infrastructure initiative which helps convert drivers’ interest in e-mobility into a roadgoing reality – Berylls Green Mobility drives the change toward making automotive sustainable.

The unique value we bring to the table is based on digitisation, technological innovation, market insights and renowned partnerships. The Berylls Quintet is your high-performance engine to succeed on this exciting road. It is the key to accompanying the automotive industry on its way into the future and to leveraging its potential, from strategy to final implementation – end-to-end.

Because the future is coming. But different.

Firmenkontakt und Herausgeber der Meldung:

Berylls by AlixPartners
Maximilianstrasse 34
80539 München
Telefon: +49 1606927414
Telefax: +49 (89) 71041040-99
http://berylls.de

Ansprechpartner:
Christian Bangemann
Pressesprecher Berylls – PR & Media Relations
E-Mail: christian.bangemann@berylls.com
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