The Automotive Cluster in Baden-Württemberg, Germany

Topics: Automotive industry, Volkswagen Group, Porsche Pages: 31 (9150 words) Published: July 6, 2009
European Foundation for the Improvement of Living and Working Conditions

The automotive cluster in Baden-Württemberg, Germany

Introduction Profile of Baden-Württemberg Automotive industry in Germany Baden-Württemberg's automotive cluster Factor conditions Demand conditions Summary and future scenarios Bibliography

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This report looks at the automotive industry cluster in the German federal state of Baden-Württemberg. It begins with a short profile of Baden-Württemberg and the German automotive industry. This is followed by an analysis of the way that 1 the main trends and drivers for change in2the industry (as identified in the mapping report ) are reflected in the cluster, according to Porter’s ‘diamond model’ . The report concludes with a SWOT analysis, exploring the competitive advantage of the cluster and possible scenarios for the future development of the industry.

Profile of Baden-Württemberg
Baden-Württemberg is the third largest and the third most populated federal state in Germany, with a population of 10.7 million inhabitants and an area of 35,752 km² in 2003. The largest city is Stuttgart with a population of 587,152. Eight other cities have a population over 100,000: Mannheim, Karlsruhe, Freiburg, Heidelberg, Heilbronn, Ulm, Pforzheim and Reutlingen. Other large cities are Esslingen, Ludwigsburg, Tübingen and Villingen-Schwenningen (see Figure 1). Figure 1: Baden-Württemberg and Europe

Source: Baden-Württemberg Agency for International Economic Cooperation (GWZ)


MacNeill, S. (et al), Trends and drivers of change in the European automotive industry: Mapping report, European Foundation for the Improvement of Living and Working Conditions, 2004. For an illustration and more detailed description, see Porter, M. E., The competitive advantage of nations, New introduction, 2nd edn, London, Macmillan Press, 1998, p.127.


© European Foundation for the Improvement of Living and Working Conditions, 2004


With 9,300 manufacturing plants and an export quota of 41.7% for manufacturing products, the manufacturing sector represented 32.4% of gross value added in Baden-Württemberg. In 2002 the biggest exporting industries are the automotive industry worth €26.32 billion (equalling 25.2% of total exports), machinery worth €23.84 billion (22.8% of exports), and chemical products worth €9 billion (8.7% of export) (Wirtschaftsministerium Baden-Württemberg, 2003a, p. 7). Other important sectors include electrical products, electronics and ICT.

Automotive industry in Germany
German manufacturers of motor vehicles and motor vehicle parts (NACE 34) account for 2,500 enterprises with a total workforce of 890,000, according to the 2001 Yearbook on International Auto Statistics produced by the Association of the Automotive Industry (Jürgens, 2002, p. 2). In 2002, the workforce was 856,000, or 44% of the EU total in this sector, according to Eurostat. The industry consists of a small number of global lead manufacturers with a large number of family-owned small and medium-sized suppliers surrounding them, though a wave of mergers and acquisitions in the 1990s has seen many of the traditional SME suppliers disappear. However, most German car companies are still firmly anchored in block ownership, making them less exposed to the capital market. The ownership structure of the major German car companies is as follows (Jürgens, 2002, p. 5): a) Volkswagen Group including Audi, which is a 100% fully owned subsidiary since 1964 (ownership structure in 3 December 2000) : 20% State of Lower Saxony; 10.2% self-control led by VW; 12.1% national institutional investors; 3.5% other European institutional investors; 3% US institutional investors; 51.4% floating capital. b)...

Bibliography: 37
Accenture, Automotive insight: Telematics: Realising the promise for OEMs, Accenture, 2002a
© European Foundation for the Improvement of Living and Working Conditions, 2004
© European Foundation for the Improvement of Living and Working Conditions, 2004
© European Foundation for the Improvement of Living and Working Conditions, 2004
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