1. www.brickworksourcing.com
German Automobile Sector Forging Ahead
January 30, 2013
Procurement Consulting – Brickwork Sourcing
Brickwork India (Confidential)

2. Current Scenario
 Germany, the world’s fourth biggest automobile producer has an annual
production of 12 million automobile units around the world, with 32% of
all the passenger car production, and German OEMs accounting for 17%.
 The automotive industry remains Germany’s most important economic
sector and Europe’s single largest auto market.
 The biggest threat to the German auto industry was in 2008 during the
financial crisis.
 The auto exports made from Germany began to increase a great deal after
2010 with the exports mainly catering to the UK, USA, and Asia.
 The Volkswagen Group, which is a major German auto manufacturer,
experienced huge growth and is currently one of the three biggest auto
companies in the world.
 Germany also hosts the largest concentration of OEM plants in Europe
and is committed to automotive research and development with an
annual investment of EUR 21 billion.
 Germany has always been deemed the most innovative auto nation
worldwide. 2

3. The Future Road
 Given that automotive manufacturing in Germany is one of the largest
sources of employment, GDP, and tax revenue for the country, it becomes
important to ensure the viability of this industry.
 Although German auto majors are investing heavily on research and
development as well as looking at innovation, they might be running out
of options.
 The increasing dependency on third world countries for manufacture of
custom auto parts is a growing trend.
 The auto ancillary industry has to be monitored and increased
dependency seems to be the way forward.
3

4. Growth Drivers and Opportunities
 There has been a huge growth in ancillary industries over the years where
in the German auto majors have lowered production costs by transferring
aspects of production into these industries.
 It is estimated that the auto ancillary industry is bound to grow by 5-7% to
around US$46 billion going forward.
 Adopting reliable suppliers is an area of opportunity for German auto
majors.
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5. Market Potential
Despite all the short comings, there is a huge opportunity waiting for
investors in the automobile sector in Germany; there is constant
expansion and innovation in the sector and this is evident from the large
number of auto patents applied for by Germany. Further, as the country is
the gateway to the auto market of Europe there is a need for new
strategies to implement sourcing of auto parts which are custom made in
countries such as India and China. This would mean that there is an
increased need for global sourcing; Brickwork Sourcing works with global
automobile companies and has capabilities of providing end-to-end
sourcing, vendor and supply chain management solutions.
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6. About Brickwork Sourcing
Brickwork is the pioneer of the Virtual Office business. We provide virtual support for
businesses across the globe. Our well informed Remote Sourcing Analysts (RSAs) can
provide support at any or all stages of your sourcing lifecycle. Your Virtual Sourcing Office
can be a large team of analysts supporting large companies with established procurement
processes or a one-man-show to function as your entire procurement office.
Disclaimer
“The information contained in this document that includes text, graphics and links, are provided on an “as-is”, "with all faults" and "as
available" basis and are without warranty of any kind. While Brickwork relies on sources that are believed to be reliable, it cannot rule
out errors in judgment or application. The document is intended for “information” and “general guidance” purposes only.” Investment
decisions and/or other decisions based on the conclusions and potential strategies mentioned in the document are not necessarily
endorsed by the Brickwork management.” 6

7. Brickwork Sourcing
www.brickworksourcing.com
THANK YOU
Contact:
info@brickworksourcing.com
Sanjeeth Hegde
India: +91 (80) - 4040 – 9999 (218 Ext)
15 February 2013