The German Machinery & Equipment Industry 2013 Market leadership powered by German engineering

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1 Chris Schmidt - istockphoto The German Machinery & Equipment Industry 2013 Market leadership powered by German engineering Jérôme Hull Manager, Mechanical and Electronical Technologies Germany Trade & Invest GmbH September 2013, EMO Hannover, Germany

2 Agenda 1. The German M&E Market Facts & Figures 2. Business Opportunities in the M&E Market Industrie The Advantages of Germany as an Investment Location 4. About Germany Trade and Invest (GTAI) 2

3 The German M&E Market Facts & Figures The Germany M&E industry is back on track, with expected record turnover Facts about the German M&E Industry After having seen a strong sales decline in 2009, the industry recovered in 2010 with a turnover plus of 6 % a growth rate of about 12 %, 2012 turnover EUR 207 billion, expecting record turnover in Annual Turnover of M&E Industry in Germany (in EUR billion) Germany s largest industry by level of activity, with more than 6,000 companies and about 970,000 employees Germany s 16.5 % world trade share of machinery, awards it consecutively the title export world champion. Overall Annual R&D expenditures is at over EUR 13.2 billion - one of the most innovative industries in Germany companies register 28 % of the world s mechanical engineering patents. Source: VDMA (2012) 3

4 The German M&E Market Facts & Figures Worldwide machinery turnover top 10 countries (2011) Germany EUR 230 bn (+14%) China EUR 563 bn (+15%) USA EUR 276 bn (+7%) South Korea EUR 65 bn (+8%) Italy EUR 107 bn (+8%) 9 Japan EUR 292 bn (+12%) France EUR 49 bn (7%) 10 Great Britain EUR 43 bn (+10%) Brasil EUR 38 bn* Source: VDMA (2012), (*2011) India EUR 40 bn* 4

5 The German M&E Market Facts & Figures Germany is Export World Champion in the M&E Industry The Global Market Share of the 10 largest M&E Sectors in Germany 2012 (Total export volume, world export share, world market position) Export volume in EUR billion Power transmission engineering Materials handling technology Construction equipm. and building materials machinery Air-handling technology Machine tools Food processing machinery and packaging machinery Agricultural machinery Valves and fittings Precision Tools Compressors, sompressed ait and vacuum techn ,7% (1) 20,4% (1) 10,5% (3) 11,7% (2) 18,1% (2) 21,8% (2) 17,7% (1) 13,7% (2) 15,4% (1) 16,0% (1) Source: VDMA (2012), GTAI Research (2013) 5

6 Agenda 1. The German M&E Market Facts & Figures 2. Business Opportunities in the M&E Market Industrie The Advantages of Germany as an Investment Location 4. About Germany Trade and Invest (GTAI) 6

7 Business Opportunities Industrie 4.0 The four stages of Industrial Revolution from centralized mechanization processes to integrated value-added chains Mechanisation Electrification Automatisation Integration Source: DFIK

8 Business Opportunities Industrie 4.0 The vision behind the smart factory concept Industrie 4.0 What is Industry 4.0? What are the objectives of Industry 4.0? Cyber-Physical Systems (CPS): machines, storage, production facilities etc. exchange information, trigger actions and independently control each other. Industrial processes become more vertically integrated and can be managed more efficiently and flexible Self-organizing, Adaptive Logistics Resilient Factory Technology Marketplace Products in Smart Factories are always traceable. Operational and embedded production processes are horizontally linked and controllable in real time from order to supply Continuous engineering over the whole life cycle becomes possible. Networked Production Intelligent Maintenance Within the High-Tech Strategy 2020 Action Plan, Industrie 4.0 has received special attention in realizing current innovation policy objectives: 200 Mio subventions Customer-Integrated Engineering Source: Acatech2013; Industrie 4.0 Platform 8

9 Agenda 1. The German M&E Market Facts & Figures 2. Business Opportunities in the M&E Market Industrie The Advantages of Germany as an Investment Location 4. About Germany Trade and Invest (GTAI) 9

10 Advantages of Germany as an Investment Location Leading Economy Quality of Life Global Player Secure Investment Environment 9 3 High Productivity Competitive Tax Conditions 8 4 Excellent Workforce Inviting Incentives 7 5 Power of Innovation 6 First-Class Infrastructure 10

11 Advantages of Germany as an Investment Location Germany s share of GDP from industrial production is comparatively high, making Germany the largest manufacturer in Europe. GDP of G8-Countries by Sector (2012, in %) Development of Industrial production sales in selected countries (2012) Russia 36,0 60,1 Germany 30,5 68,5 Japan* 30,1 68,3 Canada 28,7 69,3 Italy 24,2 73,8 United Kingdom* 21,7 77,0 USA 19,3 79,6 France 19,0 79, *2011 data Agriculture Industry Services Source: The German Federal Environment Ministry Source: VDMA 2012 Note: *refers to EU-28; Source: IMD 2012, Eurostat

12 Advantages of Germany as an Investment Location Germany is a major global R&D player. Germany s federal states R&D expenditures correspond with that of other European countries. German Machinery & Equipment Innovation Expenditures (in EUR bn) Global Top 10 - R&D Expenditures (2011, in EUR bn) Global Top 10 - R&D Expenditures (2011, in EUR bn) 16 USA 298, ,1 3, ,7 2,6 3,1 12,8 Japan* China Germany 128,5 96,6 73,6 8 France 44, ,8 5, ,3 5,6 5,4 United Kingdom Korea* 31,0 27, ,1 8,8 9,6 8,8 9,1 9, Canada Australia* 21,7 20,4 investment-related innovation expenditures ongoing innovation expenditures percentage of innovation expenditures to turnover Italy 19,7 0,0 100,0 200,0 300,0 400,0 Source: VDMA (2013); Note: For 2012 only forecasts available; Source: OECD 2013 according to OECD, UNESCO 2012 (right) 12

13 Advantages of Germany as an Investment Location Germany s high-tech industries like machinery, automotive, chemicals and electrical equipment perform outstandingly strong. Share of High-Tech Industries of Gross Value Added (in %, 2010) 1 4,5 4,0 3,9 3,5 3,0 3,4 3,0 2,5 2,2 2,0 1,5 1,0 0,5 1,8 1,8 0,9 1,2 1,6 0,7 0,5 1,1 1,1 0,6 0,4 0,9 0,0 Germany Japan EU-14 USA Machinery Automotive Electrical Equipment Chemicals Source: German Institute of Economic Research (DIW) 2013; Note: 1 High-tech industries are characterized by high internal R&D expenditures of between 2.5%-7% of the average OECD turnover; Cutting-edge technologies show an internal R&D intensity of more than 7% of the average OECD turnover 13

14 Advantages of Germany as an Investment Location R&D Excellence // Germany s top innovation clusters - Kompetenznetze Selected M&E industry-related innovation clusters in Germany Universities, research centers and companies establish interdependent relations with access to technology and supplier networks, creating innovative value chains. Collaboration between industry and research is improved and foreign investors can find information and project partners for R&D. The Clusterplattform Deutschland provides information on cluster policy measures, as well as on upcoming events, and essentially serves to facilitate access to the individual initiatives. It also encourages a mutual and intensive exchange of information and experience relating to the measures, their development, and impact. Source: Fraunhofer Innovation Clusters, GO-CLUSTER Initiative 14

15 Agenda 1. The German M&E Market Facts & Figures 2. Business Opportunities in the M&E Market Industrie The Advantages of Germany as an Investment Location 4. About Germany Trade and Invest (GTAI) 15

16 About Germany Trade & Invest (GTAI) The foreign trade and inward investment promotion agency of the Federal Republic of Germany German Parliament Resolutions for Founding/Financing Federal Government BMWi - Shareholder BMI Company Tasks Investment Attraction Export Promotion Location Promotion 16

17 About Germany Trade & Invest (GTAI) Two Headquarters in Germany - 48 Locations Worldwide Chicago New York San Francisco Toronto Washington D.C. Buenos Aires Bogotá Mexico City Santiago de Chile Sao Paulo Berlin Bonn Athens Brussels Helsinki London Madrid Milan Paris Stockholm The Hague Jerusalem Cairo Johannesburg Nairobi Tunis Almaty Belgrade Budapest Bucharest Kiev Moscow Prague Warsaw Zagreb Dubai Istanbul Bangkok Beijing Hanoi Hong Kong Jakarta Kuala Lumpur Mumbai New Delhi Seoul Shanghai Taipeh Tokyo Sydney 17

18 About Germany Trade & Invest (GTAI) AHK-Cooperation AHK Offices GTAI Offices Joint offices 18

19 About Germany Trade & Invest (GTAI) Complete your project management needs from our range of investment and one-stop project consultancy services. Strategy Evaluation Decision & Investment Project Management Assistance Business opportunity analysis and market research Market entry strategy support Project partner identification and contact Joint project management with regional development agency Coordination and support of negotiations with local authorities Location Consulting/Site Evaluation Identification of projectspecific location factors Cost factor analysis Site preselection Site visit organization Final site decision support Support Services Identification of relevant tax and legal issues Project-related financing and incentives consultancy Organization of meetings with legal advisors and financial partners Administrative affairs support Accompanying incentives application and establishment formalities 19

20 Thank you for your Attention! For further information, please contact us: Europe Berlin - Headquarters Mr. Oliver Seiler Director Mechanical & Electronic Technologies T oliver.seiler@gtai.com Mr. Max Milbredt Manager Electronics & Microtechnology T max.milbredt@gtai.com Ms. Peggy Görlitz Senior Manager Machinery & Equipment T peggy.goerlitz@gtai.com Mr. Marko Kolbe Senior Manager Transportation Technologies T marko.kolbe@gtai.com Dr. Rainer Müller Senior Manager Applied Sciences & Technology Transfer T rainer.mueller@gtai.com Mr. Jonathan Schoo Manager Electronics & Microtechnology T jonathan.schoo@gtai.com Mr. Jérôme Hull Manager Machinery & Equipment T jerome.hull@gtai.com Mr. Stefan Di Bitonto Manager Transportation Technologies T stefan.dibitonto@gtai.com North America Chicago Office New York Office San Francisco Office Mr. Emilio Brahmst Senior Manager Chicago, USA T F emilio.brahmst@gtai.com Mr. Claus Habermeier Director New York, USA T: F: claus.habermeier@gtai.com Ms. Angelika Geiger Director San Francisco, USA T: F: angelika.geiger@gtai.com Asia-Pacific Beijing Office Tokyo Office Mumbai Office Mr. Markus Hempel China Representative Beijing, China T F markus.hempel@gtai.com Mr. Iwami Asakawa Japan Representative Tokyo, Japan T F iwami.asakawa@gtai.com Ms. Asha-Maria Sharma India Representative Mumbai, India T F asha-maria.sharma@gtai.com 2012 Germany Trade and Invest GmbH All information provided by Germany Trade and Invest has been put together with the utmost care. However we assume no liability for the accuracy of the information provided. 20