Remark: Further information on suppliers to the automotive industry can be found in the profiles of the metal-processing, electronics/electrical engineering and rubber and plastics industries.

The suppliers in the automotive industry are having to restructure themselves and realign their relations with the motor vehicle manufacturers, develop new business models to suit the new market conditions, reduce costs, and relocate, close or refit production facilities. After a necessary period of consolidation, the sector will emerge from the crisis with new strength.

Sales
Worldwide:	€ 2,000 bn
Europe:	€ 550 bn
Germany:	€ 290 bn
Investment R&D and production
Worldwide:	€ 85 bn
Germany:	€ 19 bn
Empoyees
Worldwide:	9 mill.
Europe:	2,6 mill.
Germany:	750,000

Growth markets for sales/production
 
China

• 2008: only 2% of the population owns a car
• High investment in infrastructure expansion thanks to economic stimulus programmes
• A growing middle class with a solid income and a corresponding demand for consumer goods
• Growth despite the economic crisis
• Environmental protection is gaining in importance  

ASEAN

• 2 million motor vehicles are sold per year – growing trend
• Market potential ranges from small and premium brands to light-duty commercial vehicles
• High import tariffs for vehicles from outside Asia are forcing foreign manufacturers to manufacture locally
• European and American motor vehicle manufacturers can count on state support for the construction of new manufacturing locations in ASEAN countries  

India

• 2008: only 1.5% of the population owns a car
• Despite the economic crisis India is still a growth market
• Population likes to spend but is holding back on purchases of capital goods because of uncertainty on the jobs market
• Improvement in income of rural population due to government measures
• High market potential for low-cost small cars because of the low wage level  

Eastern Europe

• High number of older cars
• Some government-funded programmes to promote purchases of new cars
• Inflation is holding back purchases of new cars
• Few economic stimulus programmes are in place; the main emphasis is on expanding infrastructure and environmental protection     

Russia

• Increased demand for new vehicles, including in the premium sector, in 2008
• Economic crisis is suppressing this demand
• The trend will initially be towards smaller vehicles, as the government is encouraging this through subsidized credit
• Imports are subject to a 30% import tax since 2009. Foreign manufacturers are having to produce locally
• A recovery in the market is not expected in the short term
• Economy still strongly tied to trends in raw material prices
• Long-term there is good potential, in particular for foreign motor vehicles, which have been able to significantly expand their market share  

Opportunities in established markets
 
USA

• Trend towards eco-friendly and fuel-efficient cars
• Domestic manufacturers have to adjust to the changes in demand
• Foreign manufacturers have the advantage because of their more advanced technology
• As soon as finance to buy a new car becomes interesting again for customers, a rise in sales can be expected  

Western Europe

• Customers want high standard of technology
• Environmentally-friendly and affordable small cars
• Alternative drive systems  

Japan

• Consumption has slumped and is remaining low because of the uncertain situation on the jobs market
• Government encourages purchase of new cars through a scrappage bonus and grants tax breaks to those buying hybrid and electric vehicles
• Japanese manufacturers are gearing up to future needs through continuing development of alternative drive systems and are reducing investment in large vehicles
• High innovations capability, good infrastructure and technology leadership  

Technology trends

• Improved road safety
• intelligent driving systems
• improved sensor technology
• car passenger protection systems
• Hybrid and electric motors
• Transport efficiency (traffic guidance systems)
• Lightweight construction
• Reduction of fuel consumption  

Commercial trends
 

• Traffic safety
• In the established markets customers place high value on safety, both in the vehicles and on the roads. Further developments in vehicle technology to improve safety are being given top priority. Many safety improvements, such as ABS, airbags etc. are now standard  
  

• Environmental policy / Resource-saving
• To remain competitive in the long term, manufacturers have to find alternatives to the use of dwindling resources and fuels. They also have to address the ever tighter legal framework as regards reduction of carbon emissions in the life cycle through production, use and disposal. Most countries are making a lot of money available for this as part of their economic packages. Noise protection also plays a large part

 

• General
• Best market opportunities for cars that combine optimal safety and environmental protection at an attractive price

Source: VDA, OICA, Germany Trade & Invest