The Automotive Industry in Germany
The Automotive Industry in Germany Industry Overview
Driving Performance through Technology
The Automotive Industry in Germany
Germany is the Geographic and Economic Center of Europe If Germany is known for one thing, it’s the automotive industry. But we’re not just sitting back and riding on the coattails of our reputation as the home of the automobile. Our automotive industry continues to operate at full throttle. Automotive is Germany’s largest industry by turnover, and accounts for more than a third of total domestic R&D spending. German car manufacturers and suppliers are world leaders in innovation with more than 3,500 registered patents every year.
With 48 OEM components and assembly plants, over 30 of the best performing industry-related innovative clusters, 3,600 tier 1, 2, and 3 suppliers, and Europe’s most experienced workforce, Germany is the primary location for technologydriven companies active in all stages of the value chain.
The German Automotive Industry in Numbers
European Motor Vehicle Production in 2008 by Country Belgium 4%
Germany is the number one automotive market by production and sales: accounting for 32 percent of all motor vehicles produced, and 20 percent of all new registrations in the European Union. Around 5.5 million passenger cars, 246,000 light commercial vehicles, 257,000 heavy trucks, and over 10,000 buses were produced at German plants in 2008 – one third of Europe’s production capacity.
Poland 5% Czech Republic 5% Germany 32% Italy 5%
UK 9%
Others 12% France 14%
Germany is home to 48 OEM assembly plants providing multiple business opportunities for suppliers in various fields.
Spain 14% Source: ACEA 2008
Over EUR 288 billion in annual combined revenues for manufacturers and suppliers in 2008. 834,000 people work directly in the automotive industry – of which around 40 percent are employed at the supplier level.
Photo: ©Daimler
In 2008 industry R&D expenditures approached the EUR 18.9 billion mark - more than a third of overall German industry R&D spending.
Industry Overview 2009 www.gtai.com 3
The Advantages of Germany as a Location for Automotive Investments
and their respective decision centers, assembly plants (an impressive one third of Europe‘s total installed capacity) as well as the production facilities of almost all top 100 tier 1 suppliers.
Advantages are abound across all segments and all stages of the automotive value chain. The leading role of German manufacturers and suppliers in the international automotive industry provides further proof of the competitive edge Germany enjoys as an outstanding business location.
Personnel Germany’s excellent and highlyskilled labor force has been the key to success for the German automotive industry. Benefiting from the country‘s unique education system which is specifically geared to meet industry needs, the companies can count on a direct workforce of 834,000 highly-trained and experienced people. One in every nine employees works in R&D. The steady flow of mechanical engineers graduating from approximately 100 universities and colleges helps to ensure the continuity of German engineering excellence.
Photo: ©BMW Group
Market Germany hosts the largest concentration of OEM plants in Europe – creating considerable production volume, client, and product diversification advantages for suppliers. Established suppliers in Germany are able to access 10 different OEMs
R&D Germany has the highest concentration of all European automotive OEM and tier 0.5 supplier R&D centers. This makes the country the most important automotive development activity location in Europe. Germanbased suppliers and service providers profit from close client interaction starting from the pre-development stage. They can take advantage of joint research activities with some of the world’s leading automotive technology research institutes and universities. Numerous innovation clusters integrate industry, science and education in automotive-related areas including mechatronics, microelectronics, mechanical engineering, manufacturing processes and material sciences.
4 Industry Overview 2009
Automotive Industry-related Networks of Competence in Germany SWEDEN
DENMARK
Mechatronics/Microsystems
DENMARK
Engineering
BALTIC SEA
Kiel
BALTIC SEA
Schleswig-Holstein
1
Microsystems
Environmental Technology
2
Micro and Nanotechnology
Recycling Technology
3
Mechatronics
4
Microelectronics
NORTH SEA
3
Schwerin
Hamburg
MecklenburgVorpommern
Bremen
Industrial Manufacturing
Brandenburg
Lower Saxony
1 4
Hanover
1
Adaptronics
Power Engineering
2
Automotive
1
Fuel Cells/Hydrogen
3
Carbon Fiber Reinforced Plastics
2
Power Electronics
4
Virtual Engineering
(Hybrid Engines)
5
Mechanical Engineering
6
Process Technology
POLAND
Berlin
THE NETHERLANDS
2
1 North RhineWestphalia
Magdeburg
1
Potsdam
2 Saxony-Anhalt
4 2 1
5
Düsseldorf
2
4
Dresden
Erfurt
5
Saxony
Traffic and Transportation
Hessen Thuringia
BELGIUM
1
Automotive Engineering
3
Wiesbaden Rheinland-Pfalz
Component Behavior (Modeling)
2
Surface Engineering of Plastics
Information and
3
Lightweight Construction
Communication Tech.
4
Natural Fiber Composites
1
Navigation, Telematics
5
Textile Research
2
Traffic Systems
3
Software Engineering
4
Virtual and Augmented Reality
Mainz
3
2
1
Saarland Saarbrücken
3
CZECH REPUBLIC © Invest in Germany design: [email protected]
LUXEMBURG
3 1 FRANCE
6
Stuttgart
Bavaria
3 Baden-Württemberg
1
Materials Science 1
and Telematics
Munich
4 1 National Border (Federal) State Borders (Federal) State Capital
SWITZERLAND
City-State
Graphic: www.typoly.de
AUSTRIA
Physical Infrastructure Located at the heart of Europe, Germany offers a sophisticated infrastructure that integrates stateof-the-art transportation networks with the most modern and cost efficient IT and telecommunications systems available today. Not for nothing is Germany Europe‘s number one in logistics. Germany‘s exceptional strength in this area has been underlined by the World Economic Forum‘s (WEF) Global Competitiveness Report 2008 in which the German economy took first place for infrastructure. It is this world class infrastructure which supports the continued success of the highly efficient and smooth operating automotive logistics environment.
Source: Federal Ministry of Economics and Technology, 2007
Stable Investment Enviroment Social, economic and political stability provide a solid base for your corporate projects. Our judiciary and civil services are highly professional. Contractual agreements are secure and intellectual property is strictly protected in Germany.
Industry Overview 2009 www.gtai.com 5
Opportunities No other country in Europe can boast a comparable concentration of automotive-related R&D, design, supply, manufacturing, and assembly facilities. Accordingly, no other country in Europe provides the same investment opportunities as offered by the German industry.
active and passive safety, vehicleto-X communication and traffic management. All companies having established a legal entity in Germany (regardless of country of provenance) are eligible.
New Vehicle Programs and Forecast Volumes in European OEM Plants (SOP 2008 -2012) New Programs Accumulated Peak Volume (in 100,000 Units)
16
12
8
7 4
3
Photo: ©Daimler
UK 1.14
Poland 5.41
Belgium 8.26
Czech R. 9.08
Spain 10.79
France 11.28
1
Source: European Light Vehicle Industry Forecast, Global Insight, 2007
6 Industry Overview 2009
3
Sweden 2.01
4
Portugal 2.98
5
Italy 15.31
German vehicle manufacturers are committed to delivering further CO2 emission reductions. The goal for 2012 is clearly set by the European Commission - new vehicles must not produce more than 130 g/ km by means of vehicle technology improvements and other contributory factors. A further 10 g/km reduction is foreseen through other improvements and increased use of biofuels. The industry is building on the country’s longstanding experience in environmental technologies to secure a leading position in all fields of sustainable mobility. This approach translates into a strong demand for innovative products that enhance fuel economy and energy efficiency. Power- train solutions providers, battery manufacturers, suppliers of advanced materials (including light metals and composites), and electronic systems are all finding unique business opportunities in Germany.
The industry is supported by active innovation policy and significant public investments. A total of EUR 15 billion has been made available by the German Federal Government for R&D projects in cutting edge technologies. Applicable research fields for the automotive industry include for example: alternative powertrains and energy storage, X-by-wire technologies,
Germany 20.4
Within the next four years, 16 new vehicle programs - representing an accumulated volume of more than 2 million units at peak - will be launched in Germany. This represents one third of all new program launches in Europe for the period 2008 through 2012.
Incentives in Germany
Incentives for Investments in the Automotive Industry Germany offers numerous incentives for all investors - regardless of whether they are from Germany or otherwise. There is a large selection of programs available designed to support a wide variety of business activities at different stages of the investment process. Support ranges from cash incentives reimbursing direct investment costs to incentives for labor as well as research and development (R&D). Incentives for Setting Up Production Facilities Production facility set-up costs can be significantly reduced using a number of different measures from Germany’s extensive investment incentives package. The main instruments are cash incentives provided in the form of non-repayable grants.
Photo: ©BMW Group
Cash Incentives Germany offers two major programs directing the allocation of these cash incentives: the Joint Task for the Promotion of Industry and Trade (Joint Task); and a special cash incentives program to promote investment activities in Eastern Germany called the Investment Allowance. The Joint Task program regulates the distribution of non-repayable grants for investment costs throughout Germany. Money available through this program is usually distributed in the form of cash payments.
Types of Incentives in Germany Investment Incentives Package
1)
+
Operational Incentives Package
Cash Incentives
InterestReduced Loans
Public Guarantees
Labor-Related Incentives
R&D Incentives
Investment Grants
KfW Loans (National Level)
State
Recruitment
Grants
Investment Allowance1
State Development Bank Loans
Combined State/ Federal
Training Support
Loans
Wage Subsidies
Silent/Direct Partnership
only in Eastern Germany
Joint Task funds must be applied for before the investment project begins. Germany Trade & Invest’s incentives experts offer specific information and consultation services in advance. In Eastern Germany, investment grants are complemented by the Investment Allowance, which is usually provided in the form of a taxfree cash payment but can also be allotted in the form of a tax credit.
Alternatively, the individual German federal states help secure private bank loans by granting public guarantees in the absence of securities. Commitments vouched for within public guarantees are normally subject to intensive individual examination by external assessors.
Public Loans and Guarantees Interest-reduced loan programs make up a second component of Germany’s investment incentives package. They are offered by publicly organized financial institutions submitting loans at below market interest rates. The provision of such loans usually makes it easier for investors to access funding from private lending banks.
Industry Overview 2009 www.gtai.com 7
Each sector comprises various R&D programs. Approximately EUR 15 billion in total is reserved for non-repayable project grants through 2009.
R&D Project Funding Germany offers several incentives programs targeted at reducing the operating costs of R&D projects. Programs operate at the regional, national, and European level and are wholly independent from investment incentives. At the national level, all R&D incentives programs are subsumed under the Federal Government’s four-year High-Tech Strategy. The High-Tech-Strategy defines specific sectors with a high dependency on promising high-tech developments.
Within the current framework of the German economic stimulus program, an extra EUR 500 million R&D funding budget has been set aside for application-oriented research in the area of mobility. Interest-reduced loans and grants are disbursed, for example, for developing new hybrid drives, battery and fuel cell technologies.
How to Profit from Public R&D Funding To participate in R&D funding programs, companies must define an R&D project with clear objectives and a fixed time line. The project application should highlight the innovative character of the project and the technological risks involved. Any application for R&D funding also has to set out a commercialization plan, detailing how research results will be transformed into products, processes or services which generate additional turnover
The High-Tech Strategy: Sectors with Relevant Budgets 2006-2009 (in EUR million) R&D projects in the automotive sector can be subsidized through a number of different programs according to the project’s objectives. Calls for proposals are published on a regular basis by the relevant government ministries. 3,650
Space technologies 2,000
Energy technologies 1,180
Information and communication technology
800
Health research and medical technology
770
Automotive and traffic technologies
640
Nanotechnologies Biotechnology
430
Environmental technologies
420
Materials technologies
420
Optical technologies
310
Plants
300
Aviation and aeronautical technologies
270
Production technologies
250
Microsystems technology
220
Maritime technologies
150
Security research
80
Services
50
Source: German Federal Ministry for Education and Research (BMBF)
8 Industry Overview 2009
Photo: ©Volkswagen
and/or employment in the region where the R&D project is located. The total amount of incentives a project may receive depends on the size of the company (small, medium-sized or large), whether the project is conducted in cooperation with other companies or research institutes, and the research category of the project (fundamental research, industrial research, or experimental development).
Building-Up Human Resources Labor-related incentives play a significant role in reducing the operational costs incurred by new businesses. Germany’s Federal Employment Agency (Bundesagentur für Arbeit) and the different federal states offer a range of labor-related incentives programs designed to fit the different company needs when creating a workforce. The range of programs offered can be classified into three main groups: programs focusing on recruitment support, training support, and wage subsidies.
Industry Overview 2009 www.gtai.com 9
Our Investment Project Consultancy Services
Germany Trade & Invest Helps You Our teams of industry experts in the automotive and related industries will assist you in setting up your operations in Germany. From design and engineering centers to manufacturing and assembly plants, we can support your project management team from the earliest stages of your expansion strategy. We do this by providing you with all the industry insider information you need – covering everything from automotive markets and segments
to industry trends and the supplier landscape, automotive technology R&D to industry regulation and the domestic labor market.
field. Our team of experts is at hand to provide you with the relevant background information on Germany’s tax and legal system.
Profit from our experience and know-how to identify the investment location which meets your specific investment criteria. We help turn your requirements into concrete investment site proposals, providing free consultation services to ensure you make the right location decision. We coordinate site visits, meetings with potential suppliers, service providers, technology partners, universities and other institutes active in the automotive
Germany Trade & Invest’s financial experts help you create the appropriate financial package for your investment and bring you into contact with suitable financial partners. Specialists provide you with detailed information about available incentives, support you with the application process, and arrange contacts with local economic development corporations. Take advantage of our range of free of charge services.
Complete your project management needs from our range of investment and one-stop project consultancy services. Strategy
Evaluation
Decision & Investment
Project Management Assistance Business opportunity analysis and market research
Market entry strategy support
Project partner identification and contact
Joint project management with regional development agency
Coordination and support of negotiations with local authorities
Cost factor analysis
Site preselection
Site visit organization
Final site decision support
Project-related financing and incentives consultancy
Organization of meetings with legal advisors and financial partners
Administrative affairs support
Accompanying incentives application and establishment formalities
Location Consulting /Site Evaluation Identification of project-specific location factors
Support Services Identification of relevant tax and legal issues
10 Industry Overview 2009
Contact
Imprint Publisher & Editor Germany Trade and Invest Gesellschaft für Außenwirtschaft und Standortmarketing mbH Friedrichstraße 60 10117 Berlin Germany T. +49 (0)30 200 099-0 F. +49 (0)30 200 099-111 offi[email protected] www.gtai.com Chief Executive: Michael Pfeiffer Contact Automotive Industry: [email protected] Conception, Layout, Text, Translations Germany Trade & Invest Support Promoted by the Federal Ministry of Economics and Technology and the Federal Ministry of Transport, Building and Urban Affairs in accordance with a German Parliament resolution. Notes © Germany Trade & Invest, May 2009 All information provided by Germany Trade & Invest has been put together with the utmost care. However we assume no liability for the accuracy of the information provided. Order Number 13688
Germany Trade & Invest is the foreign trade and inward investment agency of the Federal Republic of Germany. The organization advises and supports foreign companies seeking to expand into the German market, and assists companies established in Germany looking to enter foreign markets. Germany Trade & Invest Friedrichstraße 60 10117 Berlin Germany T. +49 (0)30 200 099-0 F. +49 (0)30 200 099-111 [email protected]
All inquiries relating to Germany as a business location are treated confidentially. All investment services and related publications are free of charge. www.gtai.com
Photo: ©Volkswagen
About Us
Driving Performance through Technology
The Automotive Industry in Germany
Germany is the Geographic and Economic Center of Europe If Germany is known for one thing, it’s the automotive industry. But we’re not just sitting back and riding on the coattails of our reputation as the home of the automobile. Our automotive industry continues to operate at full throttle. Automotive is Germany’s largest industry by turnover, and accounts for more than a third of total domestic R&D spending. German car manufacturers and suppliers are world leaders in innovation with more than 3,500 registered patents every year.
With 48 OEM components and assembly plants, over 30 of the best performing industry-related innovative clusters, 3,600 tier 1, 2, and 3 suppliers, and Europe’s most experienced workforce, Germany is the primary location for technologydriven companies active in all stages of the value chain.
The German Automotive Industry in Numbers
European Motor Vehicle Production in 2008 by Country Belgium 4%
Germany is the number one automotive market by production and sales: accounting for 32 percent of all motor vehicles produced, and 20 percent of all new registrations in the European Union. Around 5.5 million passenger cars, 246,000 light commercial vehicles, 257,000 heavy trucks, and over 10,000 buses were produced at German plants in 2008 – one third of Europe’s production capacity.
Poland 5% Czech Republic 5% Germany 32% Italy 5%
UK 9%
Others 12% France 14%
Germany is home to 48 OEM assembly plants providing multiple business opportunities for suppliers in various fields.
Spain 14% Source: ACEA 2008
Over EUR 288 billion in annual combined revenues for manufacturers and suppliers in 2008. 834,000 people work directly in the automotive industry – of which around 40 percent are employed at the supplier level.
Photo: ©Daimler
In 2008 industry R&D expenditures approached the EUR 18.9 billion mark - more than a third of overall German industry R&D spending.
Industry Overview 2009 www.gtai.com 3
The Advantages of Germany as a Location for Automotive Investments
and their respective decision centers, assembly plants (an impressive one third of Europe‘s total installed capacity) as well as the production facilities of almost all top 100 tier 1 suppliers.
Advantages are abound across all segments and all stages of the automotive value chain. The leading role of German manufacturers and suppliers in the international automotive industry provides further proof of the competitive edge Germany enjoys as an outstanding business location.
Personnel Germany’s excellent and highlyskilled labor force has been the key to success for the German automotive industry. Benefiting from the country‘s unique education system which is specifically geared to meet industry needs, the companies can count on a direct workforce of 834,000 highly-trained and experienced people. One in every nine employees works in R&D. The steady flow of mechanical engineers graduating from approximately 100 universities and colleges helps to ensure the continuity of German engineering excellence.
Photo: ©BMW Group
Market Germany hosts the largest concentration of OEM plants in Europe – creating considerable production volume, client, and product diversification advantages for suppliers. Established suppliers in Germany are able to access 10 different OEMs
R&D Germany has the highest concentration of all European automotive OEM and tier 0.5 supplier R&D centers. This makes the country the most important automotive development activity location in Europe. Germanbased suppliers and service providers profit from close client interaction starting from the pre-development stage. They can take advantage of joint research activities with some of the world’s leading automotive technology research institutes and universities. Numerous innovation clusters integrate industry, science and education in automotive-related areas including mechatronics, microelectronics, mechanical engineering, manufacturing processes and material sciences.
4 Industry Overview 2009
Automotive Industry-related Networks of Competence in Germany SWEDEN
DENMARK
Mechatronics/Microsystems
DENMARK
Engineering
BALTIC SEA
Kiel
BALTIC SEA
Schleswig-Holstein
1
Microsystems
Environmental Technology
2
Micro and Nanotechnology
Recycling Technology
3
Mechatronics
4
Microelectronics
NORTH SEA
3
Schwerin
Hamburg
MecklenburgVorpommern
Bremen
Industrial Manufacturing
Brandenburg
Lower Saxony
1 4
Hanover
1
Adaptronics
Power Engineering
2
Automotive
1
Fuel Cells/Hydrogen
3
Carbon Fiber Reinforced Plastics
2
Power Electronics
4
Virtual Engineering
(Hybrid Engines)
5
Mechanical Engineering
6
Process Technology
POLAND
Berlin
THE NETHERLANDS
2
1 North RhineWestphalia
Magdeburg
1
Potsdam
2 Saxony-Anhalt
4 2 1
5
Düsseldorf
2
4
Dresden
Erfurt
5
Saxony
Traffic and Transportation
Hessen Thuringia
BELGIUM
1
Automotive Engineering
3
Wiesbaden Rheinland-Pfalz
Component Behavior (Modeling)
2
Surface Engineering of Plastics
Information and
3
Lightweight Construction
Communication Tech.
4
Natural Fiber Composites
1
Navigation, Telematics
5
Textile Research
2
Traffic Systems
3
Software Engineering
4
Virtual and Augmented Reality
Mainz
3
2
1
Saarland Saarbrücken
3
CZECH REPUBLIC © Invest in Germany design: [email protected]
LUXEMBURG
3 1 FRANCE
6
Stuttgart
Bavaria
3 Baden-Württemberg
1
Materials Science 1
and Telematics
Munich
4 1 National Border (Federal) State Borders (Federal) State Capital
SWITZERLAND
City-State
Graphic: www.typoly.de
AUSTRIA
Physical Infrastructure Located at the heart of Europe, Germany offers a sophisticated infrastructure that integrates stateof-the-art transportation networks with the most modern and cost efficient IT and telecommunications systems available today. Not for nothing is Germany Europe‘s number one in logistics. Germany‘s exceptional strength in this area has been underlined by the World Economic Forum‘s (WEF) Global Competitiveness Report 2008 in which the German economy took first place for infrastructure. It is this world class infrastructure which supports the continued success of the highly efficient and smooth operating automotive logistics environment.
Source: Federal Ministry of Economics and Technology, 2007
Stable Investment Enviroment Social, economic and political stability provide a solid base for your corporate projects. Our judiciary and civil services are highly professional. Contractual agreements are secure and intellectual property is strictly protected in Germany.
Industry Overview 2009 www.gtai.com 5
Opportunities No other country in Europe can boast a comparable concentration of automotive-related R&D, design, supply, manufacturing, and assembly facilities. Accordingly, no other country in Europe provides the same investment opportunities as offered by the German industry.
active and passive safety, vehicleto-X communication and traffic management. All companies having established a legal entity in Germany (regardless of country of provenance) are eligible.
New Vehicle Programs and Forecast Volumes in European OEM Plants (SOP 2008 -2012) New Programs Accumulated Peak Volume (in 100,000 Units)
16
12
8
7 4
3
Photo: ©Daimler
UK 1.14
Poland 5.41
Belgium 8.26
Czech R. 9.08
Spain 10.79
France 11.28
1
Source: European Light Vehicle Industry Forecast, Global Insight, 2007
6 Industry Overview 2009
3
Sweden 2.01
4
Portugal 2.98
5
Italy 15.31
German vehicle manufacturers are committed to delivering further CO2 emission reductions. The goal for 2012 is clearly set by the European Commission - new vehicles must not produce more than 130 g/ km by means of vehicle technology improvements and other contributory factors. A further 10 g/km reduction is foreseen through other improvements and increased use of biofuels. The industry is building on the country’s longstanding experience in environmental technologies to secure a leading position in all fields of sustainable mobility. This approach translates into a strong demand for innovative products that enhance fuel economy and energy efficiency. Power- train solutions providers, battery manufacturers, suppliers of advanced materials (including light metals and composites), and electronic systems are all finding unique business opportunities in Germany.
The industry is supported by active innovation policy and significant public investments. A total of EUR 15 billion has been made available by the German Federal Government for R&D projects in cutting edge technologies. Applicable research fields for the automotive industry include for example: alternative powertrains and energy storage, X-by-wire technologies,
Germany 20.4
Within the next four years, 16 new vehicle programs - representing an accumulated volume of more than 2 million units at peak - will be launched in Germany. This represents one third of all new program launches in Europe for the period 2008 through 2012.
Incentives in Germany
Incentives for Investments in the Automotive Industry Germany offers numerous incentives for all investors - regardless of whether they are from Germany or otherwise. There is a large selection of programs available designed to support a wide variety of business activities at different stages of the investment process. Support ranges from cash incentives reimbursing direct investment costs to incentives for labor as well as research and development (R&D). Incentives for Setting Up Production Facilities Production facility set-up costs can be significantly reduced using a number of different measures from Germany’s extensive investment incentives package. The main instruments are cash incentives provided in the form of non-repayable grants.
Photo: ©BMW Group
Cash Incentives Germany offers two major programs directing the allocation of these cash incentives: the Joint Task for the Promotion of Industry and Trade (Joint Task); and a special cash incentives program to promote investment activities in Eastern Germany called the Investment Allowance. The Joint Task program regulates the distribution of non-repayable grants for investment costs throughout Germany. Money available through this program is usually distributed in the form of cash payments.
Types of Incentives in Germany Investment Incentives Package
1)
+
Operational Incentives Package
Cash Incentives
InterestReduced Loans
Public Guarantees
Labor-Related Incentives
R&D Incentives
Investment Grants
KfW Loans (National Level)
State
Recruitment
Grants
Investment Allowance1
State Development Bank Loans
Combined State/ Federal
Training Support
Loans
Wage Subsidies
Silent/Direct Partnership
only in Eastern Germany
Joint Task funds must be applied for before the investment project begins. Germany Trade & Invest’s incentives experts offer specific information and consultation services in advance. In Eastern Germany, investment grants are complemented by the Investment Allowance, which is usually provided in the form of a taxfree cash payment but can also be allotted in the form of a tax credit.
Alternatively, the individual German federal states help secure private bank loans by granting public guarantees in the absence of securities. Commitments vouched for within public guarantees are normally subject to intensive individual examination by external assessors.
Public Loans and Guarantees Interest-reduced loan programs make up a second component of Germany’s investment incentives package. They are offered by publicly organized financial institutions submitting loans at below market interest rates. The provision of such loans usually makes it easier for investors to access funding from private lending banks.
Industry Overview 2009 www.gtai.com 7
Each sector comprises various R&D programs. Approximately EUR 15 billion in total is reserved for non-repayable project grants through 2009.
R&D Project Funding Germany offers several incentives programs targeted at reducing the operating costs of R&D projects. Programs operate at the regional, national, and European level and are wholly independent from investment incentives. At the national level, all R&D incentives programs are subsumed under the Federal Government’s four-year High-Tech Strategy. The High-Tech-Strategy defines specific sectors with a high dependency on promising high-tech developments.
Within the current framework of the German economic stimulus program, an extra EUR 500 million R&D funding budget has been set aside for application-oriented research in the area of mobility. Interest-reduced loans and grants are disbursed, for example, for developing new hybrid drives, battery and fuel cell technologies.
How to Profit from Public R&D Funding To participate in R&D funding programs, companies must define an R&D project with clear objectives and a fixed time line. The project application should highlight the innovative character of the project and the technological risks involved. Any application for R&D funding also has to set out a commercialization plan, detailing how research results will be transformed into products, processes or services which generate additional turnover
The High-Tech Strategy: Sectors with Relevant Budgets 2006-2009 (in EUR million) R&D projects in the automotive sector can be subsidized through a number of different programs according to the project’s objectives. Calls for proposals are published on a regular basis by the relevant government ministries. 3,650
Space technologies 2,000
Energy technologies 1,180
Information and communication technology
800
Health research and medical technology
770
Automotive and traffic technologies
640
Nanotechnologies Biotechnology
430
Environmental technologies
420
Materials technologies
420
Optical technologies
310
Plants
300
Aviation and aeronautical technologies
270
Production technologies
250
Microsystems technology
220
Maritime technologies
150
Security research
80
Services
50
Source: German Federal Ministry for Education and Research (BMBF)
8 Industry Overview 2009
Photo: ©Volkswagen
and/or employment in the region where the R&D project is located. The total amount of incentives a project may receive depends on the size of the company (small, medium-sized or large), whether the project is conducted in cooperation with other companies or research institutes, and the research category of the project (fundamental research, industrial research, or experimental development).
Building-Up Human Resources Labor-related incentives play a significant role in reducing the operational costs incurred by new businesses. Germany’s Federal Employment Agency (Bundesagentur für Arbeit) and the different federal states offer a range of labor-related incentives programs designed to fit the different company needs when creating a workforce. The range of programs offered can be classified into three main groups: programs focusing on recruitment support, training support, and wage subsidies.
Industry Overview 2009 www.gtai.com 9
Our Investment Project Consultancy Services
Germany Trade & Invest Helps You Our teams of industry experts in the automotive and related industries will assist you in setting up your operations in Germany. From design and engineering centers to manufacturing and assembly plants, we can support your project management team from the earliest stages of your expansion strategy. We do this by providing you with all the industry insider information you need – covering everything from automotive markets and segments
to industry trends and the supplier landscape, automotive technology R&D to industry regulation and the domestic labor market.
field. Our team of experts is at hand to provide you with the relevant background information on Germany’s tax and legal system.
Profit from our experience and know-how to identify the investment location which meets your specific investment criteria. We help turn your requirements into concrete investment site proposals, providing free consultation services to ensure you make the right location decision. We coordinate site visits, meetings with potential suppliers, service providers, technology partners, universities and other institutes active in the automotive
Germany Trade & Invest’s financial experts help you create the appropriate financial package for your investment and bring you into contact with suitable financial partners. Specialists provide you with detailed information about available incentives, support you with the application process, and arrange contacts with local economic development corporations. Take advantage of our range of free of charge services.
Complete your project management needs from our range of investment and one-stop project consultancy services. Strategy
Evaluation
Decision & Investment
Project Management Assistance Business opportunity analysis and market research
Market entry strategy support
Project partner identification and contact
Joint project management with regional development agency
Coordination and support of negotiations with local authorities
Cost factor analysis
Site preselection
Site visit organization
Final site decision support
Project-related financing and incentives consultancy
Organization of meetings with legal advisors and financial partners
Administrative affairs support
Accompanying incentives application and establishment formalities
Location Consulting /Site Evaluation Identification of project-specific location factors
Support Services Identification of relevant tax and legal issues
10 Industry Overview 2009
Contact
Imprint Publisher & Editor Germany Trade and Invest Gesellschaft für Außenwirtschaft und Standortmarketing mbH Friedrichstraße 60 10117 Berlin Germany T. +49 (0)30 200 099-0 F. +49 (0)30 200 099-111 offi[email protected] www.gtai.com Chief Executive: Michael Pfeiffer Contact Automotive Industry: [email protected] Conception, Layout, Text, Translations Germany Trade & Invest Support Promoted by the Federal Ministry of Economics and Technology and the Federal Ministry of Transport, Building and Urban Affairs in accordance with a German Parliament resolution. Notes © Germany Trade & Invest, May 2009 All information provided by Germany Trade & Invest has been put together with the utmost care. However we assume no liability for the accuracy of the information provided. Order Number 13688
Germany Trade & Invest is the foreign trade and inward investment agency of the Federal Republic of Germany. The organization advises and supports foreign companies seeking to expand into the German market, and assists companies established in Germany looking to enter foreign markets. Germany Trade & Invest Friedrichstraße 60 10117 Berlin Germany T. +49 (0)30 200 099-0 F. +49 (0)30 200 099-111 [email protected]
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