A Huge Network of OEMs and Suppliers

Industry Overview

Germany's automobile industry is one of the key sectors in the country. Cars and automotive parts are among the country's top export products and are known for their premium quality, safety and environmental friendliness. Germany is the world champion of automotive patents. The biggest German automotive supplier alone filed on average 19 patents per working day in 2014. According to the National Association of the Automotive Industry, VDA, the sector spent 17,6 billion euros on internal research and development in 2014, accounting for one third of total German industry R&D expenditure.

A recent study from Ernst & Young among European automotive companies shows that Germany is the number one automotive production location, especially in terms of innovation, product quality, and productivity.

Our Industry in Numbers

  • Largest automotive market in Europe with 5.6 million passenger vehicles manufactured and 3.04 million new registrations, including 851,200 imported vehicles.
  • Industry turnover added up to EUR 384 billion in 2014.
  • In 2014, 4.3 million automobiles were exported (increase of 3% to 2013). The export quota for passanger vehicles totalled more than 77%.
  • About 28% of total sold vehicles in Germany were imported in 2014.
  • The industry has a workforce of about 775,000, an increase of almost 3% above 2013.

    Source: VDA

Market Potential

EUROPE'S LARGEST MARKET FOR AUTOMOTIVE SUPPLIERS - With more than one third of the total European automotive production located in Germany, the country is by far the largest market for automotive suppliers. The same is true for automotive OEMs, with 2.95 million new registrations there is no other country in Europe where more vehicles are being sold.

AFTER MARKET - Germany has a very competitive auto parts market with many domestic and foreign manufacturers. These suppliers are mostly specialized and are strong in selling their products. Especially for the after market, there is a vast network of distributors, dealers and agents available.

Market Access

With the goal of supporting an effective internal market, the European Union has introduced a regulatory framework that guarantees the international harmonization of technical requirements on motor vehicles, - i.e. passenger cars, motorcycles and tractors.

IMPORTING TO THE EU - The Framework Directive for Whole Vehicle Type Approval makes sure that every motor vehicle being sold in the EU market complies with the requirements. This framework directive contains sales procedures and a list of separate directives laying down technical requirements for motor vehicles as well as for components and separate technical units from which vehicles are assembled. The tariffs for different motor vehicles, auto parts and accessories are available in the integrated community tariff database, TARIC.

IMPORTING TO GERMANY - The German automotive market is very complex, competitive and specialized. Any company thinking of importing to Germany must do serious research in order to find the right niche for their products. Quality is of utmost importance in Germany and customers are looking for serious and reliable suppliers. All automotive products imported into Germany must comply with the industry requirements. Importers must make sure that high quality products with competitive prices are offered. This includes taking care of all necessary certificates, safety marking and quality seals (DIN, CE, etc.). Importers can also contact the German Engineering Federation (VDMA) in order to make sure that their products are suitable to be offered in the market.

Since chemicals are used in the production of automobiles, all manufacturers and importers must make sure that their products comply with the REACH Regulation (Registration, Evaluation and Authorization of Chemicals). According to REACH, companies are required to gather information on the chemical substances used in their products and register the data with the European Chemicals Agency (ECHA). Registration is required for most hazardous substances above 1 ton per year, for substances toxic to the aquatic environment above 100 tons per year, or substances manufactured or imported above 1.000 tons per year.

In order to provide a better understanding and support to automotive companies, the VDA has published a guide for the implementation of REACH in the automobile industry in cooperation with the American, Korean, Japanese and European automotive associations.

Distribution Channels

Foreign auto parts exporters should be aware that car manufacturers in Germany are highly dependent on auto components. The proportion of value added by suppliers is expected to grow to as much as about 77% by 2015. The distribution of auto parts in Germany is double tracked, meaning that auto parts are sold directly from the producer to manufacturers that have an own network of authorized workshops (OES) and also to independent spare parts dealers and repair shops (IAM).

The best way of entering the German automobile market is by contracting representatives specialized in the sector. Nowadays, there are in Germany commercial agents that offer the full range of services for their customers. Some of them even own distribution warehouses and take care of everything from importing the product to selling it. Importers interested in finding a reliable commercial agent can contact the National Association of German Commercial Agencies and Distribution (CDH).

Supporting Institutions

The German Association of the Automotive Industry (VDA) promotes the interests of the German automotive industry worldwide. The association works closely with its more than 620 members, which include automobile, trailers, special bodies and containers manufacturers as well as suppliers. The VDA provides interested companies relevant statistics, a directory of the automotive industry and other useful tools on its website.

The German Auto Parts Distributor Association's (GVA) main goal is to ensure a free market for auto parts and vehicle repair services in Germany. It strives to maintain equal opportunities in the sale and distribution of auto parts and services by supporting a smooth market entrance for suppliers.


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