In the fast lane

Earlier this year, Germany marked the 125th anniversary of the birth of the automobile. Karl Benz registered his ‘vehicle powered by a gas engine' in January 1886, and the resulting patent is widely considered as the birth certificate of the car. It is also Germany that launched the world's first four-stroke internal combustion engine.

With 47 original equipment manufacturer (OEM) plants, 32 industry-related innovation clusters, 3,600 suppliers across tiers 1, 2 and 3, and Europe's most experienced workforce, Germany is an undisputed leader in the global automotive industry and the location of choice for companies across all stages of its value chain.

German OEMs account for 17 per cent of the global passenger car production and form the largest concentration of OEM plants in Europe. The automotive industry is the country's most important economic sector and accounts for more than a third of total domestic R&D spending. Germany is also Europe's single largest automobile market, based on both production and sales figures. According to industry body Verband der Automobilindustrie (the German Association of the Automotive Industry — VDA), 5.5 million passenger vehicles were manufactured and 2.9 million vehicles were registered last year.

Charging ahead

In September, the US light vehicle market (passenger cars and light trucks) recorded a year-on-year growth of 10 per cent, by touching 1.05 million units. In comparison, German automotive manufacturers sold 88,600 vehicles — a rise of 19 per cent — which far outstripped the international market trend, according to Germany Trade and Invest, the country's foreign trade and inward investment agency that also acts as a statistician. In the passenger car segment, which grew at a much more modest rate of 3 per cent globally, German brands pushed up sales by a record 17 per cent. In the light truck segment (SUVs, CUVs, vans and pickups) Germany underlined its strong position with a growth of 27 per cent, against the overall global market increase of 17 per cent.

Apart from the nearly six million vehicles produced in Germany each year, an additional 5.5 million are produced overseas by German brands. Six German firms dominate the industry — Volkswagen AG, BMW AG, Daimler AG, Dr. Ing h.c. F. Porsche AG, Adam Opel AG, and Ford-Werke GmbH.

Besides manufacturers, Germany is also home to the biennial Internationale Automobil-Ausstellung (the International Automobile Exhibition — IAA), held at Frankfurt. Organised by VDA, the world's most important mobility trade fair attracted 928,000 visitors this year between September 15 and 25, marking a 10 per cent increase in visitor figures over 2009.

These records and results are hardly surprising. According to Germany Trade and Invest, the German auto industry invested €19.6 billion (Dh101.9 billion ) in research and development last year, marking a 3.1 increase over 2009. It has also registered a staggering average of 10 patents every day, totalling 3,650 patents a year, making it the most innovative auto nation in the world.

This annual R&D commitment is reflected in various new environmentally friendly technologies that optimise conventional drive technologies. New research fields include alternative fuels, fuel cell technology, alternative power trains and energy storage systems, active safety, vehicle-to-X communication and traffic management systems.

Matthias Wissmann, President, VDA, offers a simple explanation. "Fuel efficiency has now become a key argument in the purchase of a vehicle. With their broad range of new, economical vehicles, German manufacturers can continue to score in this important market. In the future, automobiles will be even more intelligent, have even lower emissions, and more often will be fitted with alternative power trains. Our long-term goal is the zero emissions vehicle," he said, addressing the 450 international guests at the Electric Mobility Congress in September. According to VDA, the German automotive industry plans to invest €12 billion in developing alternative power trains over the next three to four years.

New concern

There is just one niggling little worry for the future, which could prove a dampener to an industry that has hitherto been running at full throttle. Germany faces a shortage of engineers to design all the new cars they intend to produce — a combination of ageing workforce and the young generation's apparent lack of interest in technical studies.

According to VDA, the shortage of engineers in the country hit an all-time high of nearly 77,000 jobs in recent months. This may prove to be a problem for many of the big firms, such as Volkswagen which aims to be the world's biggest automaker by 2018, or BMW which wants to hire 800 people at Leipzig as part of the €400-million expansion of its i3 and i8 plants. Also at Leipzig, Porsche plans to add the Cajun SUV to its local production line, with the intention of hiring 1,000 extra workers. Leipzig's mayor, Burkhard Jung, said, "Until two years ago, we hardly heard of companies in the region struggling to find skilled staff, but the scarcity of engineers has become an issue now."

Although it may sound far-fetched — especially in the face of steadily increasing profits — the German giants may face problems as this shortage threatens to slow growth and restrict expansion, especially with hybrid and electric models. A seeming solution is to look at distant shores.

Porsche's head of personnel Thomas Edig explains it best. "Manufacturers are now vying for talent from China, India and other growth markets. We also want to recruit employees from China and India because we need their know-how and understanding of their home markets."

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The state of affairs in 2010

• Volkswagen was ranked the world's third-largest motor vehicle manufacturer and Europe's largest

• The BMW Group produced 1,481,253 automobiles and 112,271 motorcycles across all its brands

• Opel announced an investment of €11 billion for the next five years, of which €1 billion is earmarked for the development of innovative and fuel-saving engines.

• The Daimler Group sold 1.9 million vehicles and employed more than 260,000 people

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What's in a name?

When August Horch designed his first car, another car manufacturer already operated under his name, and he chose to call his firm Audi, the Latin translation of the German word horch, which means ‘listen'.

Mercedes was named in honour of Emil Jellinek, a distributor of Daimler cars, who also entered them in races using his daughter's name Mercedes as a pseudonym.

In 1934, Ferdinand Porsche received a contract from Hitler to design a ‘people's car', or Volkswagen.

The Beetle was marketed in its home country as Käfer, German for beetle.

 BMW is an acronym for Bavarian Motor Works.