The German car industry is under increasing pressure

The car industry will cease to be a driver of economic growth in Germany, according to a study by the Institute for German Economics (IW) in Cologne. This was announced on the eve of a meeting between representatives of the automotive industry and the federal government. The corona crisis and the transition of the car industry from internal combustion engines to electric motors is hitting the car industry hard. And thus the overall German economy, for which the car industry has long been a driver of economic growth.

The importance of car manufacturers and their subcontractors can be seen in a few figures: almost ten percent of Germany’s GDP goes to the car industry. More than two million people in Germany live directly and indirectly from this industry. And it is at the forefront of innovation. Nearly 40 percent of all research and development expenditure goes to the automotive industry.

Under pressure both small and large Crisis meetings of car industry representatives with policy representatives, such as today’s (8 September) video conference, are regularly accompanied by requests for incentives to buy new cars. But this time, the belief that the differences between big and small are such that one cannot go with the same incentives for everyone seems to have prevailed. True, car manufacturers and their subcontractors, large concerns, as well as medium and small businesses, are all under pressure. But some are threatened with survival, others are not.


Japanese car manufacturers

The Japanese automobile industry is unique from a historical point of view, and some parallels can be drawn, common to all brands from the Far East. Car manufacturers from the „Land of the Rising Sun“ mostly originated from large industrial corporations as branches, in the first half of the 20th century. Initially, they were in line with the requirements of the domestic market, especially when it comes to commercial and passenger vehicles. However, it is only since the 1960s that the Japanese automobile industry has experienced enormous success on a global scale, being among the three countries with the most developed automobile industry in the world.

The oil crisis of 1973 was largely in favor of the placement of Japanese vehicles. Millions of customers in the North American market have exchanged their powerful, but also very „thirsty“ cars for „Made in Japan“ economical models with four-cylinder engines. Meanwhile, Japanese cars have proven to be extremely reliable in maximizing opportunities. From then until today, the „Japanese“ have become synonymous with affordability, low running costs and of course reliability


BRAND HISTORY – BMW Although their engines are closest to perfection, the acronym BMW does not represent „Best Motors in the World“, it actually means „Bayerische Motoren Werke“. The secret of their success lies in the constant pursuit of quality and excellence. Unlike other manufacturers, he initially focused his production primarily on engine production. The company was founded, back in 1913, by Karl Friedrich Rapp. Rapp-Motorenwerke, which would later change its name to BMW, focused primarily on aircraft engines, due to huge demand during the First World War. Despite the success, Rapp failed to sell its stake in the company, due to unwanted vibrations produced by the engines. Due to financial difficulties, Karl Rapp resigned in 1916. The Austrian company formed by Franz-Josef Popp and Camillio Castiglionia re-launched BMW, convincing its then-owner Gustavo Otto of the merger. That is how the „Bayerische Flugeug-Werke“ was formed, i.e.