Author: Eric Heymann (+49) 69 910-31730
April 11, 2013
In the last three years Germany's automotive industry was able to rely on exports as a major pillar of growth. In value terms, exports of the sector – which also includes domestic suppliers – expanded by a nominal 31% in 2010 and by 15% in 2011. This more than offset the heavy losses incurred in the recession year of 2009. In 2012, however, momentum already slowed noticeably, with export growth coming to no more than 2.5%. Massive declines in exports to most countries of continental Europe were compensated by increased deliveries to the US, China, the UK, Russia and Mexico, among others. It is interesting to note that exports to the US and China rose even though these markets are increasingly catered for by German companies' local production sites.
From a current vantage point, German car exports look set to slow further. In January 2013 exports fell below their pre-year level in value terms for the third consecutive time. Export markets which had previously proved "reliable" such as China and the US already registered declines in the last few months – in a year-over-year comparison – or at least markedly slower momentum. In light of the persistently difficult economic environment in western Europe, where the auto market started into the current year with an unexpectedly poor showing, we think it very likely that German car exports will shrink in value terms in 2013 but look for a gradual improvement from the second half of the year. Of course, this decline will also adversely affect domestic car production, which we expect to drop by 2% in real terms in 2013.