German car exports to China fall 37%
German passenger car brands took almost 8 percent of US market in 2018 – Companies have 118,000 employees at US plants – With stable trade conditions sales by German automotive industry could exceed 17 million in 2019.
“The United States, along with China and Europe, is among the most important sales regions for the German automotive industry.
In 2018 the German OEMs sold 1.34 million light vehicles there, equaling the good result from the previous year and mirroring the trend on the overall market.
Customers in the US bought a total of 17.2 million light vehicles.
This took the market share going to German brands of passenger cars to nearly 8 percent,” said Klaus Bräunig, Managing Director of the German Association of the Automotive Industry (VDA), at the North American International Auto Show in Detroit.
The German group brands sold around 16.5 million new cars worldwide last year.
“With stable trade conditions, in 2019 we could break through the 17 million mark for the first time,” Bräunig explained.
For the German auto industry the US is important not only as a sales market, but also as a production location. This strong commitment benefits the US economy and the employees.
Bräunig said, “German manufacturers and suppliers are major employers in the US. In 2018 around 118,000 people were directly employed at their plants, more than 80,000 of them at our suppliers.
“Our US workforce grew by about 8,000 compared with the previous year.” In addition to the four large plants belonging to German vehicle makers, our suppliers also operate almost 330 production facilities.
“The companies provide jobs and create value in hundreds of municipalities in the US. The German automotive industry therefore makes a key contribution to American prosperity,” Bräunig stated.
German manufacturers have increased their production in the US significantly in recent years. The US is the German OEMs’ third largest foreign location.
While total US production has doubled since 2009, German OEMs have almost quadrupled production at their US facilities.
In 2018 approximately 750,000 German-branded light vehicles were manufactured in the US.
US-made vehicles are not only destined for the domestic market.
Bräunig explained, “The US is an important export hub. Our OEMs exported 56 percent of their US-made vehicles to destinations like China or Europe. Forty-four percent remained in the US.”
While the German firms produced around 750,000 vehicles in their US plants, only 470,000 new vehicles were exported to the US from Germany.
German US production locations need free and fair trade
“Recent developments once again proved that the automotive industry and the jobs it provides depend heavily on free and fair trade – in the US, in Germany and elsewhere. Additional tariffs and local content measures to protect the industry have negative effects both on the local economy and on competitiveness.
“This is why we are deeply concerned about the direction that US trade policy has taken since 2017.
“We should always keep in mind that together the EU and the US account for 50 percent of world trade. We could shape global trade as partners, not opponents,” Bräunig pointed out.
For this reason the German automotive industry supports a transatlantic agreement on industrial goods in conformity with WTO rules, which should include the automotive sector.
Bräunig stated, “Removing import tariffs and reaching the greatest possible understanding on regulations would be the right way to go. That will benefit both sides.”
Bräunig also mentioned the trade conflict between the US and China: “The situation has a major impact on our companies in the US. In 2017 German auto makers exported around 150,000 light vehicles from their US production to China. One in five of all cars that we built in the US went to China.
“Owing to the trade conflicts, German auto makers exported only 95,000 light vehicles from their US production to China in 2018."
This is down from 150,000 a year earlier.
“We therefore hope that the two countries will be able to resolve their dispute.
“China’s temporary reductions of import duties are an encouraging sign, as are last week’s talks between Chinese and American officials.
“But the situation still remains precarious, and another escalation might be just around the corner.” ■