German innovation

Facing up to Automotive Reality

The car of the future, courtesy of Apple.
  • Why it matters

    Why it matters

    The auto industry is vital to the German economy, but domestic manufacturers are falling behind in innovative technologies.

  • Facts


    • About 90 million cars are produced worldwide each year, with Germany contributing almost 6 million.
    • Volkswagen overtook Toyota as the number one automaker in the first half of this year.
    • The car industry turns over €368 billion, or $416 billion, annually, and employs 775,000 people in Germany.
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Trends at the International Motor Show in Frankfurt, known as the IAA, include cars that avoid traffic jams and accidents, low-emission engines and a tendency toward bigger and bigger vehicles. But despite current strong sales, automakers are worried about declining demand in key markets.

Were you expecting a report from this year’s show? No. This is actually from the Frankfurt Motor Show in 1995.

The German auto industry has experienced two golden decades since then. Worldwide car production has grown from 50 million to about 90 million vehicles a year, and Germany has seen an increase from 4.7 to 5.9 million. German manufacturers dominate the market for premium vehicles, and VW was the world market leader in the first half of the year.

The German auto industry is taking advantage of the opening of Eastern European markets, where it is building component, engine and assembly plants to bring down its production costs. Thanks to their early investment in China, German automakers managed to secure more than 20 percent of the world’s largest market for automotive sales today.

Some things at this year’s IAA haven’t changed in 20 years. Networked cars are still unable to prevent traffic jams, and people still prefer to buy large, gas-guzzlers instead of small, more environmentally friendly cars.

But one thing has changed. German automakers’ business model is seriously threatened. The internal combustion engine is on its way out and could soon be replaced by electric engines, or perhaps even fuel cells? Self-driving cars have become a potential reality.

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