INDUSTRY OVERVIEWThe Automotive
Industry in Germany

ISSUE 2022/2023

THE AUTOMOTIVE INDUSTRY IN GERMANY

The World’s Automotive
Innovation Hub“The automotive sector is the backbone industry in Germany, and the German automotive
industry is a global leader. Germany is also one of the strongest countries in the world whenit comes to high-tech automotive products, including autonomous driving technology.”
Hui ZhangManaging Director, NIO Germany GmbH

+60%

3.1 m

1 in 5

24%

1/3

77%

R&D growth in Europe created by German
automotive sector

cars that roll of the international production
line is German OEM madeof global automotive R&D spending made byGerman OEMs

Engineering and Production Excellence
Germany is recognized the world over for its outstanding
automotive industry and excellence in engineering. From
Asia to the Americas, German cars embody highly cherishedvalues of innovation, reliability, safety, and design. Germany is by some distance Europe’s leading production andsales market. The country’s world-class R&D infrastructure,complete industry value chain integration, and highly
qualified workforce create an internationally peerlessautomotive environment. It enables companies to develop
cutting-edge technologies which perfectly address tomorrow’s mobility needs.

passenger vehicles produced in 2021 – making
Germany Europe's leading production siteof total domestic industry revenue generated
by automotive industryof cars manufactured in Germany in 2021
destined for export markets

Beyond Covid-19 to the Mobility Future
Germany’s auto sector is bouncing back from the Covid19 pandemic thanks to a broad array of forward-looking
instruments and measures that will transform both theindustry and future mobility. Significant investment inautonomous driving and battery research and development,
massive expansion of charging infrastructure and electricvehicle cash incentives are driving prospects in the resurgent industry.

Germany’s Automotive Industry
in Numbers
Germany’s automotive sector is the country’s
key industry. As Europe’s leading market andproducer, the industry is also a global export
powerhouse and driver of mobility innovation.
Germany is Europe’s biggest automotive market; number one in production and sales terms,
accounting for around 25 percent of all passenger
cars manufactured and almost 20 percent of all
new registrations. Germany also boasts the largest
concentration of OEM plants in Europe. There are
currently 44 OEM sites located in Germany. German OEM market share in the EU was more than
55 percent in 2021.

R&D Leadership
German OEMs were responsible for internal R&D
investments amounting to almost EUR 28.3
billion in 2021. Germany’s automotive sector isthe country’s most innovative industry sector,
accounting for 34.1 percent of total German industry R&D expenditure of around EUR 71 billion
in 2020. Research and development personnel
within the German automobile industry reacheda level of around 134,000. Manufacturers andsuppliers of the German automotive industry will
invest more than EUR 220 billion in electric mobility
and digitalization for the period 2022 to 2026.

Manufacturing Leader Germany
German automobile manufacturers produced
over 15.6 million vehicles in 2021. Fifteen of theworld’s 75 top automotive suppliers are German
companies. Germany is the European car production leader: more than 3.1 million passenger cars
– and 351,000 commercial vehicles – were manufactured in German plants in 2021.
Export Success
German passenger car and light commercial
vehicle OEM generated foreign market revenueof almost EUR 274 billion in 2021 – a ten percent
increase over 2020. Automotive exports accountfor more than 13 percent of all German exports in
2021 – the product group with the largest export
share. Domestic market revenue is EUR 136.9 billion, compared to 2021.

786,109933

Workforce

OEMs and Suppliers

EUR 410.9 bn

EUR 273.9 bn

Industry Turnover

Export TurnoverSource: Statista 2022

Passenger car production in Europe 2021
in million units

Passenger car registrations in Europe 2021
in million units

3.1

Germany
1.6

Spain
Czech Republic

1.1

Germany
1.6

France

1.6

0.96

Italy

France

0.91

Spain

UK

0.85

Poland

0.43

2.6

UK

Slovakia

Italy

Germany’s industry
numbers speak forthemselves and fora secure and successful investmentin the country.

Belgium

1.4
0.8
0.4
0.3

Sources: VDA, ACEA 2022

3

MARKET OPPORTUNITIESGlobal Market Perspective
Germany is the world’s premium car production hub. Of all premium branded vehicles
produced globally, 65 percent are German
OEM-manufactured. Of all vehicles produced
globally, 40 percent of vehicles were producedin Europe – of which 23 percent were made inGermany in 2021.
Within Europe, more than 80 percent are German
OEM-badged vehicles – 57 percent of these vehicles were made in Germany. The western European
light vehicle production sector is predominantly
premium sector focused. According to LMC Automotive, the western European light vehicle market
hit a seasonally adjusted annual running rate ofaround 13 million units in May 2021 – up fromaround 12.7 million units in May 2020.

German autos
remain in great
demand internationally – particularly in the premium
market sector

Growing Premium Market
Globally, the premium market segment will growat a much faster rate than the total passenger car
segment in the next decades. This can mainly be
attributed to growing international demand forhigh-value, premium small- and compact-sized cars
as well as premium SUVs. The German automotive
industry is one of the world’s leading producers ofpremium cars. Almost all German and Germanybased manufacturers have already launched orintend to launch new products meeting premium
segment demand. The expertise based on the
country’s automotive manufacturing tradition willfurther strengthen Germany as a leading international automotive manufacturing location.

Strong R&D Investment
German automotive company investment inresearch and development remains strong as
manufacturers seek to maintain the competitiveness of vehicles “Made in Germany.” In 2021,
German automotive companies spent almost EUR
28.3 billion on internal R&D projects – more thanany other domestic manufacturing sector. Morethan one third of Germany’s total manufacturingindustry R&D expenditure is spent by automotive
manufacturers and suppliers, with R&D budgets
expected to rise. Germany’s automotive companies employ the largest number of research personnel in the manufacturing sector. Automotive
companies employ about one quarter of the total
R&D workforce in Germany’s private economy.
Innovative Production Location
Germany’s automotive industry occupies poleposition in international innovation rankings
according to the German Association of the Automotive Industry (VDA). Volkswagen, BMW and
Daimler occupy the top three slots with suppliers
including Bosch, Schaffler, and ZF also coming out
top internationally. The industry plans to invest
EUR 150 billion in digitalization, electric mobility
and drive systems, hydrogen technology andtransport safety in the coming years.

Global light vehicle production trend
in million units

Premium Car Production by Country 2021
in percent

Rest of the World

92

89
22
23

UK

70

Germany

75.8

97.3

98.9

2024*

2025*

82.6

3

Japan

6

16
USA

31
China

Sources: Marklines, GTAI Research (2022)

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2019

2020

*forecast
Source: Statista

2021

2022*

2023*

Technological Trends
Automotive engineers in Germany are hard atwork improving internal combustion engine
energy efficiency, developing alternative drive
technologies (including electric, hybrid, andfuel cell cars), and adapting lightweight materials and electronics.
Carbon-emission reduction targets, smart traffic management, and the government’s electric
mobility initiative are major drivers for future
mobility growth. Impressive developments havebeen made in developing smaller, highly chargedup “homogeneous combustion” engines and dual
clutch transmissions (DCTs). Optimized combustion engines that make use of synthetic fuels will
provide a short-term solution for some manufacturers before the introduction of the European
Union mandate that all new vehicles be emissions
free by 2035.
E-Mobility
Domestic and international market potential forenergy-efficient passenger cars is huge. The global
market is expected to outgrow that of conventional vehicles in the near future. Supported by
the country’s ambitious e-mobility plans, theGerman government has set itself the goal of 15
million fully electric vehicles by the year 2030 anda role as lead provider and market for e-mobility
solutions. The speed and scale of transformationin mobility and the automotive sector is remarkable. According to the Federal Statistical Office,88 percent more EVs were produced in 2021 thanwere in the previous year. Exports increased by
92 percent during the same period. The 328,000
fully electric vehicles manufactured had a market
value of around EUR 13.7 billion – up from EUR 8
billion in 2020. In marked contrast, the number of
combustion-engine vehicles produced fell by 23
percent year-on-year.
German OEMs are also keen to meet rising export
demand for vehicles in the USA and from emerging economies. Economic growth, the changing
mobility needs of a young and aspirational consumer population and relatively low passenger-car
density levels are driving demand in emerging
economies. This will allow manufactures located inGermany to follow a proven strategy of increased
imports and on-site production.
Car Connectivity
Demand for connected cars is set to increasesignificantly – and nowhere more so than in thepremium segment. Facilitating a raft of innovative safety, comfort and information services,
smart technologies are revolutionizing the driving experience. According to Mordor Intelligence,car connectivity is the fastest-growing feature
being adopted into new vehicles – with the connectivity market forecast to generate up to USD
1 trillion by the end of 2030. Germany’s industry
strength in electronic technologies and software
solutions is critical to technological advancementin this sector.

Covid-19 and Supply Chain Security
The global Coronavirus pandemic has had far-reachingeffects on the global auto industry. Supply chains from
China were already partially disrupted or suspended
with the initial spread of the SARS-Cov-2 virus in Wuhan.
The role of suppliers within the industry had notably
increased prior to this due to the classical OEM business model being slowly superseded. The Covid-19 crisis
has forced all actors to reassess their supply chain andsourcing strategies. However, major changes in the global
structures of supply chains for the auto industry are
not currently envisioned, with OEMs most likely to use

alternative suppliers for critical components and initiate
early warning systems to preempt any potential healthor economic crises in the future. Stock volumes in Europe
and Germany will most likely be increased as the industry
seeks more supply chain independence from China. Due
to further supply chain disruptions (China lockdowns
in spring 2022) and the lack of semiconductors, theconsequences of this will be felt in the short term. The
microelectronics-intensive premium segment will be mostaffected, however the situation should hopefully ease by
mid-2023.

5

MARKET OPPORTUNITIES

Value Added in the Value Chain
The auto industry in Germany thrives as aresult of the diversity of companies active inthe sector: large and medium-sized auto manufacturers alike are to be found there, as are
system and module suppliers – not to mention
numerous small and medium-sized tier 2 and 3
suppliers.
Around 85 percent of auto industry suppliers are
medium-sized companies. All of these suppliers
provide up to 70 percent of total value added
within the domestic auto sector – ensuring that
the German automobile industry remains ahead of
the competition - at home and abroad.

Changing Automotive Industry Structures
Value added is moving to the supplier side andincreasingly to non-auto industry sectors (e.g. thechemical industry in the field of electric mobility).
Accordingly, international suppliers are increasingly attracted to Germany as a business location.
To date, the world’s 10 largest non-German auto
industry suppliers have successfully establishedoperations in Germany.
Global OEM Supplier Leader
Germany boasts 15 of the world’s top 75 automotive OEM suppliers. Automotive suppliers generated EUR 79.7 billion of total German automotive

German Automotive
OEM and Supplier Density

SchleswigHolstein

No other country in Europe can boast acomparable concentration of auto-related
10 R&D, design, supply, manufacturing andassembly facilities. Accordingly, no othercountry in Europe provides the same market opportunities as those offered by theGerman auto industry.

Hamburg10

6 Bremen
Niedersachsen

10

10North RhineWestphalia

3
6

8

14

5

RheinlandPfalz

3
Saarland

98

Hessen10

Thuringia

Saxony

10

7

8

5

7
11

6
16

6

9
6
6

BadenWürttemberg

5

15
Bavaria

1

6

1

4

11

2

1

2

6

12

17 18

6

6

5

10

13

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Industry Overview 2022/23  |  gtai.com

2

10

20

8

Brandenburg

6

6

Source: GTAI 2022

SaxonyAnhalt

10

6
21

Berlin

6

9

19

4

6

10

2

8

6

MecklenburgVorpommern

2

7

10

industry turnover in 2021. The German automotive
industry recorded total revenue volume of EUR
410.9 billion in 2021 –equivalent to an eightpercent increase on 2020 revenue. The domestic
market accounted for over EUR 136.9 billion of thissum, with more than EUR 274 billion turnover generated in foreign markets. Looking further afield,
OEM exports account for more than 65 percent ofgenerated turnover.
R&D LeadershipResearch and development is crucial to maintaining this leading position, as companies strive tostay on top of trends and developments. This
explains German OEM R&D spending of almost
EUR 28.3 billion in 2021 (more than one third of
total global automotive R&D expenditure).

Skilled Labor ForceCentral to the successes enjoyed by German OEMs
to date are the skilled teams of workers who
support ongoing development and production.
The German automotive industry employed aworkforce of around 786,100 people in 2021. They
also serve Europe’s largest automotive market,
where more than 3.1 million passenger cars were
produced in 2021. According to IW Consult, 22
percent of production staff work in conventional
powertrain technology, with almost six percent
active in electric power train technology and over
67 percent in other systems.

OEMs

Suppliers (only German headquarters)

1

Audi

1

Bosch

12

Eberspaecher Holding

2

BMW

2

Continental

13

Getrag

3

Ford

3

ZF Friedrichshafen

14

Leoni

4

Iveco

4

Thyssen Krupp

15

KSPG

5

MAN

5

BASF SE

16

Freudenberg

6

Mercedes

6

Mahle

17

Webasto SE

7

Neoplan7

Schaeffler

18

Infineon

8

Opel

8

Bentheler Automobiltechnik

19

Leopold Kostal

9

Porsche9

Hella KGaA

20

Trelleborg Vibracoustic

10

Volkswagen

10

Brose Fahrzeugtechnik

21

Kautex Textron

11

Draexlmaier

7

MARKET OPPORTUNITIES

R&D Infrastructure
No other industry invests as much in R&D –almost EUR 28.3 billion in 2021 alone. As such,the auto industry in Germany accounts formore than one third of the country’s total R&D
expenditure.
Germany has the highest concentration of all
European automotive OEM and tier supplier R&D
centers. This makes the country the most important automotive development activity location in
Europe. Suppliers and service providers located inGermany profit from close client interaction starting from the pre-development stage. They cantake advantage of joint research activities withsome of the world’s leading automotive technology research institutes and universities.
Increasing R&D Investments
More than 134,000 people were engaged in R&D
activity in 2020. As well as making provision forinternal R&D expenditure of over EUR 24 billion,
the German automotive sector spends around
EUR 14 billion on external R&D – equivalent toalmost half of the country’s external R&D investments. Despite record R&D expenditure levels,
German companies intend to boost their R&D
activities further still. According to the Ernst &Young European Automotive Survey, more thanInnovation Expenditure Share of Industry Turnover 2020

10.6%

Electronics
Industry

9.0%

Chemical & Pharmaceutical Industries

10.2%

Automotive
Industry

7.2%

Information &Communication
Industry

9.4%

Technical
services

6.8%

MechanicalEngineering
Industry

Source: ZEW 2021

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40 percent of German automotive companies
want to increase their R&D investments in the
future, while 58 percent will maintain current
R&D spending levels.
World Innovation Leader
Auto manufacturers and suppliers located inGermany are among the world’s leading patentapplicants. Nine out of the country’s top ten patent filing companies are predominately active in
the automotive industry – proof positive of thecountry’s importance within the world’s automotive market and its enormous innovation power.
Germany’s automotive industry remains the country’s leading industry innovator with a significant
share of turnover being generated from new
product innovations. Almost 70 percent of companies active in the sector introduced new products
or processes. Overall investment in innovation,
including internal and external R&D expenditures,is constantly increasing. Complete industry value
chain presence ensures that new and innovative
products are made to the highest possible technological standards. Bosch, the biggest German
automotive supplier, alone files around 19 patents
per working day on average.
R&D Incentives – High-Tech Strategy
With R&D considered to be among the mostimportant areas for the development of the German economy, industry and the public sector havemade a commitment to spend around three percent of national GDP per year on R&D activities.
This amounts to approximately EUR 80 billion R&D
spending each year. In addition, an unprecedented
campaign to foster the advancement of newtechnologies has been launched by the German
government. The High-Tech Strategy represents
the first national concept to bring key innovationand technology stakeholders together in a common purpose of advancing new technologies. The
initiative combines the resources of all government
ministries, setting billions of euros aside annuallyfor the development of cutting- edge technologies(R&D projects can also count on generous financial
support in the form of R&D grants).
Automotive Industry Clusters
The decentralized nature of the automotive industry has spurred the development of strong R&D
business networks. Non-university research institutes, universities and companies work together
in numerous industry and research clusters. By

connecting individual competencies, major R&D
clusters in the automotive industry can be identified. These clusters have gained internationalrecognition by integrating industry, science andeducation in automotive-related areas including
mechatronics, microelectronics, mechanical engineering, manufacturing processes, and materialsciences. This has helped the industry to secure
an internationally leading position in a numberof technology fields and secured its status as theinternational benchmark.
International Research Partners
Industrial R&D activities in Germany benefit froma broad innovation landscape which is home toa diverse array of potential research cooperation
partners. Germany also offers research cooperation opportunities with the more than 250
institutes of the four large research organizations:Fraunhofer-Gesellschaft, Max Planck Society,Helmholtz Association, and Leibniz Association.
Their more than 70,000 researchers are globally
acknowledged experts in applied and basic sciences and economically successful. The Fraunhofer
Institute for Communication Systems ESK, inparticular, is developing state-of-the-art vehicle
information and communication technologies(ICT). Main competencies lie in the fields ofautomotive networks, infotainment and driverassistance, and model-driven software.

New Product Turnover Share by Industry 2020

46%

Automotive
Industry

18%

Information &Telecommunication
Industry

19%

23%

MechanicalEngineering
Industry

Electronics
Industry

15%

ChemicalIndustry

14%

Financial
Services

11%

Technical
Services

Source: ZEW 2021

New Lightweight Materials for the Automotive Industry
Lightweight construction is a key enabling technology for
manufacturing the cars of tomorrow and addressing thechallenges of digital transformation, electric mobility andenergy and resource efficiency. McKinsey reports thatvehicle manufacturers will need to increase lightweightcomponent levels from 30 percent to 70 percent by 2030
in order to compensate for electric drive weight increases,
more efficient engine technology and CO2 reduction
goals. Germany boasts a lightweight construction cluster
network that covers the complete industry value chain.
Two exemplary initiatives are the ARENA2036 platform
and the Open Hybrid LabFactory. Arena2036 is the largest
and leading research platform for mobility in Germany.
The entire value chain of tomorrow’s fully digitalized
vehicles is being rethought and implemented as partof the initiative. The research campus has focused its
activities in core projects in four research areas including functional integrated lightweight design. Partnercompetences are anchored in a variety of disciplines that
range from simulation and lightweight construction to
production technology and ergonomics. The Open Hybrid
LabFactory carries out research into new materials andproduction techniques to help make serial productionof cars more environmentally friendly. Production andproduction technologies suitable for mass production
will be developed for the economically and ecologicallysustainable production of hybrid lightweight components
using metals, plastics and textile structures.

9INVESTMENT CLIMATE

Europe’s Most Attractive
Automotive Location
Germany remains an internationally competitive and stable auto hub as it emerges from acoronavirus-enforced production lockdown.
The response to the crisis should see carmakers introduce new efficiencies as they switch
their focus to electric vehicle production.
The global auto industry is in a period of radicaltransformation. Demand for electrified power
train solutions is giving traction to the electric
mobility market in Europe. Further afield, thecontinent of Asia is fast establishing itself as theworld’s biggest passenger vehicle market. By pursuing a truly international business model (withR&D and production at home and abroad), Germany’s automotive industry is optimally equipped
to address these developments. Studies conclude
that German auto hubs count amongst the mostproductive and competitive in the world.

FDI Projects in the Automotive Sector 2017-2021*
total number

by country of origin
Germany

321

USA

189

China

129

Japan

124

France95

by destination country
Germany

205

UK

154
133

TurkeyFrance
Spain

115
104

*Only greenfield investment projects and expansion projects included
Source: fDi Markets 2022

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Growth Markets
The German automotive industry will perform
best in the developing world in the years ahead.
At home, the sector will consolidate its leading
market position, largely as a result of development and growth in the premium market
segment. The European share of value addedin the premium vehicle segment will be more
pronounced than in other regions, where the segment is comparatively small or irrelevant. China
will remain a strong performer in the volume
segment, with India also recording a significant
increase in demand in the small vehicle segment.
The US vehicle market is in upturn mode and oneof the most important sales markets for German
OEMs. In global comparison, Europe is the mostpromising automotive investment location invalue-added terms.
Manufacturing Location
German companies represent 10 percent of European manufacturing companies and generate 27
percent of total EU turnover in this sector. In fact,
the manufacturing sector represents more than
one fifth of Germany’s “value added” – one of
the highest shares in Europe. Increasingly moreinternational companies are placing their faith inGermany as a vital production site location, andare benefiting from superior productivity rates
and the country’s excellent business framework of
stable labor costs, excellent production standards,
and a highly skilled workforce.
Foreign Direct Investment Magnet
According to a survey of 550 decision-makers,
Germany was ranked the highest country of
all European Union member states with “themost credible and investment-friendly COVID-19
recovery plans.” The European Attractiveness
Survey confirms Germany’s reputation as oneof the most attractive business locations in theworld. Germany has caught up with France andthe United Kingdom so that the three nations aretied as Europe’s best investment destinations.
According to preliminary data produced for the
Financial Times’ fDi Markets database, Germany
was Europe’s leading – and the world’s third leading – FDI project destination location in 2021.

Financing & Incentives
in Germany
Incentives programs in Germany are available
through different public funding instruments
and for different funding purposes. The individual funding requirements may, for example, result from investment projects, researchand development activities, personnel recruitment, working capital needs or other specificpurposes.
The different incentives instruments including
grants, loans and guarantees are generally available for all funding purposes and can ordinarily be
combined; thus matching the different businessactivity needs at different development stages of
the company.
Investment Project Financing by Private Equity
Technologically innovative start-ups in particularhave to rely solely on financing through equity
such as venture capital (VC). In Germany, appropriate VC partners can be found through the
Bundesverband Deutscher Kapitalbeteiligungsgesellschaften e.V. (BVK – “German Private Equity
and Venture Capital Association”). Special conferences and events like the Deutsches Eigenkapitalforum (“German Equity Forum”) provide anotheropportunity for young enterprises to come into
direct contact with potential VC partners. Public
institutions such as development banks (publicly
owned and organized banks that exist at thenational and state level) and public VC companies
may also offer partnership programs at this development stage.
Investment Project Financing by Bank Loans
Debt financing is a central financing resource
and the classic supplement to equity financing
in Germany. It is available to companies with acontinuous cash flow. Loans can be provided tofinance long-term investments, working capitaland operational costs (R&D, personnel) and forbridging temporary financial gaps. Besides offersfrom commercial banks, investors can access publicly subsidized loan programs in Germany. These
programs usually offer loans at attractive interest
rates in combination with repayment-free startup years, particularly for small and medium-sizedcompanies. These loans are provided by the federal development bank KfW and also by regional
development banks.

Investment and R&D Incentives
When it comes to setting up production andservice facilities, investors can count on a numberof different public funding programs. These
programs complement investment project financing. Most important are cash incentives provided
in the form of non-repayable grants applicable
to co-finance investment-related expenditures
such as new buildings, equipment and machinery.
R&D project funding is made available through anumber of different incentives programs targeted
at reducing the operating costs of R&D projects.
Programs operate at the regional, national, andEuropean level and are wholly independent frominvestment incentives. At the national level, all
R&D project funding has been concentrated in
the High-Tech Strategy to push the developmentof cutting-edge technologies. Substantial annual
funding budgets are available for diverse R&D
projects.

Please visit
our website formore incentives
information:
www.gtai.com/
incentives

Labor-related Incentives
After the location-based investment has been
initiated or realized, companies can receive further subsidies for building up a workforce or the
implementation of R&D projects. Labor-related
incentives play a significant role in reducing theoperational costs incurred by new businesses.
The range of programs offered can be classified
into three main groups: programs focusing on
recruitment support, training support, and wage
subsidies respectively. Labor-related incentives
play a significant role in reducing the operationalcosts incurred by new businesses.
Incentives in Germany

Funding purposes

Investments

Working
CapitalResearch &Development

Specific
Purposes

Personnel

Financing supported by any of thefollowing public funding
instruments (combinations of instruments usually possible)

Public funding instruments

GrantsLoans

Guarantees

EquityCapitalMezzanine
Capital11

SUCCESS STORYBest Practice Example: NIO GmbHGermany Trade & Invest provides a range ofinward investment services to international
investors. After careful consultation with theindividual investor, a support program of consultancy and information services is drawn
up to help set the stage for investment success. Chinese electric vehicle start-up NIOGroup established its global design centerin Munich in 2015. It is here in Bavaria thatthe premium vehicle provider designs its
autonomous and electric vehicles including its
EP9 model – currently the fastest e-sports carin the world according to the company. The
group has invested EUR 80 million in its NIO
GmbH German subsidiary operation to date.

“For research and development, particularly in theautomotive industry, Germany is the best locationin the world. The country offers top talent andexcellent infrastructure. Hardware, industrial
infrastructure, the right suppliers: They are all here.”
Hui ZhangManaging Director, NIO Germany GmbHCompany Information
Founded in Shanghai in 2014, NIO is a global
start- up that produces high-performance premium electric and autonomous vehicles. NIO
investors include Baidu, Lenovo, Tencent, andSequoia Capital. Demand for battery electric vehicles (BEVs) is growing in China, with Chinese consumers purchasing more than 200,000 BEVs in thefirst two quarters of 2018. This is best reflected in
the increased competition in the premium BEV
segment. NIO also currently operates a numberof “NIO Houses” – including charge points, workspaces, lecture theatres, and childcare services.
The company also foresees the opening of NIOHouses in a number of major world cities, thereby
providing customers with international access toservices provided. NIO is seeking to grow its number of sales and service outlets (NIO House andNIO Space) to around 200 by the end of 2020. In
2018 the company went public on the New York
Stock Exchange as part of its plans to scale up its
activities in order consolidate its position in thecompetitive Chinese market.

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Project Information
NIO established its first international operations
outside China in Munich in 2015 – just six months
after parent group formation. The Munich site
serves the dual function of being both the Group’s
global design center and its vehicle design center.
NIO’s positioning as a pioneer in the delivery ofpremium in-car services to create a “mobile living
space” is central to the company’s ambitious plans
to increase its footprint in China’s competitive
BEV market. Additional services include mobile
charging, battery swap, and 24-hour pick-up
and drop-off options that make up the USD 2.6
billion in-car services market forecast by NIO forconnected and autonomous vehicles. Around EUR
80 million has been invested in the group’s global
design center in Munich to date.
Location Factors
Germany’s longstanding reputation as global auto
industry leader and home of the best automotive R&D location in the world was pivotal to
NIO’s decision to locate its global design centerin Munich. This, and access to Bavaria’s thriving
automotive industry and attendant infrastructure– as well as a highly qualified pool of international labor – proved the decisive factors in thedecision to locate to Germany. Innovation in thefield of autonomous technology is key to thecompany’s long-term plans to differentiate itself
from other BEV manufacturers, with the company
holding more than 1,200 battery swapping patents and having contributed to 17 national industry standards for battery swaps. NIO’s Chinesename (“Weilai”), means “Blue Sky Coming” andrepresents the group’s commitment to establishing BEVs as the natural vehicle lifestyle choice fora more sustainable future – one being driven by
innovation forged in Germany.

OUR SERVICES

Germany Trade & Invest Helps You
Our team of consultants is at hand to provide youwith the relevant background information on Germany’s tax and legal system, industry regulations,and the domestic labor market. Germany Trade &Invest’s experts help you create the appropriate
financial package for your investment and put you
in contact with suitable financial partners. Our
incentives specialists provide you with detailed
information about available incentives, support
you with the application process, and arrange
contacts with local economic development corporations.

Germany Trade & Invest’s teams of industry
experts will assist you in setting up youroperations in Germany. We support your project management activities from the earliest
stages of your expansion strategy.
We provide you with all of the industry information you need – covering everything from key
markets and related supply and application sectors to the R&D landscape. International companies profit from our experience in identifying thebusiness locations that best meet their specificinvestment criteria. We help turn your requirements into concrete investment site proposals;
providing consulting services to ensure you makethe right location decision. We coordinate site visits, meetings with potential partners, universities,
and other institutes active in the industry.

All of our investor-related services are treatedwith the utmost confidentiality and provided
free of charge.

Our support services for your investment project

Strategy

Evaluation

Decision & Investment

Project management assistanceBusiness opportunity
analysis and market
research

Project partner
identification andcontact

Joint project management with regional
development agency

Coordination and support of negotiations
with local authorities

Cost factor
analysis

Sitepreselection

Site visit
organization

Final site
decision support

Market intelligenceand statistics

Financing & incentives
consultancy

Tax and Legal
information

Contact to financial
partners

Market entry
strategy support

Location consulting/Site evaluation
Identification ofproject-specificlocation factors

Support services
Facts onincorporation

13

GERMANY TRADE & INVEST

Our Expertise Network

14

Germany Trade & Invest (GTAI) provides directaccess to all of the relevant actors in the German
economy. As the hub for a far-reaching network
at both home and abroad, GTAI maintains close
relations with a number of partners important
to international investors setting up businessin Germany. These include all federal government ministries and the leading associations of
the German economy including the Federationof the German Industry (BDI) and the Association of the German Chambers of Industry andCommerce (DIHK). As well as this, GTAI also
maintains close ties to important trade andindustry associations including the Verband derAutomobilindustrie (VDA – “German Associationof the Automotive Industry”). Our working partnership with the VDA allows prospective investors to benefit from the association’s detailed
market analyses and industry structure insights.
Together with Germany Trade & Invest’s business support services, companies who locate toGermany can do so knowing that the VDA is promoting the interests of the automotive industry
both domestically and internationally.

The German Association of the Automotive Industry (VDA) nationally and internationally promotes
the interests of the entire German automotive
industry in all fields of the motor transport sector,
for example in international trade and economic,transport and environmental policy, technicallegislation, standardizing and quality assurance.
To an equal extent, VDA promotes services instandardization, research and quality. It organizes
the world’s largest trade fair for mobility, theIAA (International Motor Show), as well as othercongresses and it regularly publishes on all automotive topics.

Since 1946, the VDA has lobbied nationally andinternationally for the creation of the best possible automobility. Our goals are safety, quality
and sustainability at the highest technical level.
As the representative of the key industry in theGerman economy, the VDA is responsible for morethan 750 thousand jobs in Germany and leads a
lively dialogue with the industry, the public, politicians, and customers.

The members of the association are companies
that operate a plant in the Federal Republic of
Germany for the industrial production of motor
vehicles and their engines, trailers, special bodies and containers as well as vehicle parts andaccessories. The VDA consists of about 600
member companies, who have come together toresearch and produce clean and safe automobility for the future. In the country that is known
for its successful invention of both automobiles
and trucks, the VDA represents the automotive
manufactures and supply companies to ensure
the continued competitive utilization of theirexperience and skills. The cooperation between
manufactures and suppliers in the VDA is uniquein the world of motoring.

The office of the association is situated in Berlin.
The VDA also has an office in Brussels as well as alocation of the VDA China (QMC) in Beijing.

Industry Overview 2022/23  |  gtai.com

From 2021 onward, the IAA (International Motor
Show), one of the biggest automotive trade showsin the world, will be held in Munich.

Contact
Verband der Automobilindustrie e. V. (VDA)
Behrenstr. 35
10117 Berlin
Germany
T. +49 (0)30 897 842-0
F. +49 (0)30 897 842-600
info@vda.de
www.vda.deCONTACT

Investor Consulting
Stefan Di Bitonto is thesenior manager for automotive technologies inGermany Trade & Invest’s
Mechanical & Electronics
Technologies team. An
acknowledged industry
expert, Stefan has successfully accompanied numerous investment projects
from North America, Asia and Europe.

Christoph Mester is the
manager responsible fortransportation technologies
at Germany Trade & Invest.
A passionate advocate for
future mobility, Christophsupervises large-scale projects along the entire value
chain with clients from America, Asia and Europe.
Prior to joining GTAI in 2020, he worked as a guest
lecturer in economics at Hochschule Osnabrück.

For questions on how to establish your businessin Germany please contact Stefan Di Bitonto at
stefan.dibitonto@gtai.com and Christoph
Mester at christoph.mester@gtai.com

Contact us at our headquarters in Berlin:
Germany Trade & Invest
Friedrichstraße 60
10117 Berlin
Germany
T +49 30 200 099-555
F +49 30 200 099-999

For more information about the automotive
industry in Germany, please visit our website:www.gtai.com/automotive

Imprint
Publisher
Germany Trade and Invest
Gesellschaft für Außenwirtschaft
und Standortmarketing mbH
Friedrichstraße 60
10117 Berlin
GermanyNotes
All rights reserved ©Germany Trade & Invest,
June 2022

Executive Board
Dr. Jürgen Friedrich, Chairman/CEO
Dr. Robert Hermann, CEO

Reproduction, in whole or in part, only permissible
with express prior authorization. All market data
provided is based on the most current market
information available at the time of publication.
Germany Trade & Invest accepts no liability forthe actuality, accuracy, or completeness of theinformation provided.

EditorWilliam MacDougall, GTAI

Order Number
20851/2

LayoutDanielle Röbbenack, GTAI
Print
Kern GmbH, 66450 Bexbach
www.kerndruck.de
Picture Credits
Cover: Adobe Stock/Gorodenkoff
Page 15: GTAI, GTAI/Anke Illing15

About Us
Germany Trade & Invest (GTAI) is the economic development agencyof the Federal Republic of Germany. The company helps create andsecure extra employment opportunities, strengthening Germany as
a business location. With more than 50 offices in Germany and abroad
and its network of partners throughout the world, GTAI supports ­German companies setting up in foreign markets, promotes Germany as a­business location and assists foreign companies setting up in ­Germany.
All investment services and related publications are free of charge.

Germany Trade & Invest
Headquarters
Friedrichstraße 60
10117 Berlin
Germany
T +49 30 200 099-0
F +49 30 200 099-111
invest@gtai.com
www.gtai.com

Germany Trade & Invest
Bonn Office
Villemombler Straße 76
53123 Bonn
Germany
T +49 228 249 93-0
F +49 228 249 93-212
info@gtai.de
www.gtai.de