Detroit, MI, USA/Berlin, Germany, 17-Jan-2018 — /EuropaWire/ — Strong growth in the dynamic light truck segment – More production in NAFTA – Higher exports major factor in US trade balance – Direct investment in US and free trade in goods with US are mutually dependent
Statement delivered by Matthias Wissmann, President of the German Association of the Automotive Industry (VDA), at the VDA’s press conference in Detroit on Monday, January 15, 2018, at 7.50 a.m. (local time)
Ladies and Gentlemen,
I have pleasure in welcoming you most warmly to our VDA press conference at the Detroit Motor Show, and I am delighted to be able to give you a positive picture of the German automotive industry today.
First: last year, the German manufacturers slightly increased their US sales of light vehicles (passenger cars and light trucks).
Sales rose by a good 1 percent to 1.35 million new vehicles. The overall US market, by contrast, lost nearly 2 percent, down to just over 17.1 million light vehicles. However, this is still a very high level.
The German OEMs have accordingly pushed up their share of the light vehicle market to 7.9 percent (from 7.6 percent in 2016). So we are in third place behind the Big Three and the Japanese competitors, and ahead of the Koreans.
It is worth noting that the German manufacturers have added to their market share in both the passenger car and the light truck segments. Our share of the passenger car market rose from 11.8 percent to 12.7 percent, and our share of light trucks rose from 4.9 percent to 5.2 percent.
Light trucks account for almost two thirds (65 percent) of the entire US light vehicle market. They increased by 4 percent in 2017. Yet the German OEMs’ light truck sales grew nearly three times as much (+11 percent).
In 2012, one quarter of all vehicles we sold in the US were light trucks, with sales concentrating mainly on passenger cars. Today that proportion has risen to well over 40 percent.
Within the light truck segment, CUVs (Cross Utility Vehicles) form the largest subgroup, with a 35 percent share of the light vehicle market. This segment has been showing above-average growth for several years now.
With a market share of over 40 percent, the German OEMs lead in the luxury CUV segment that includes small, medium-sized and large premium CUVs. This underscores the outstanding position we have long enjoyed in the premium segment. We also take more than 40 percent of the market in luxury cars.
Our share of the electric car market in the US is 16 percent, which is double our share of the total light vehicle market. A look at the number of electric models (PHEVs and BEVs) on offer in the US reveals that the models from German manufacturers make up a good third (35 percent). Most of these vehicles are plug-in hybrids. The range of available models will be greatly extended during the coming years. This puts us in a good position for the ramp-up.
Second: we are continually expanding our cooperation with the US and our production in NAFTA.
In 2017 for the first time, the German manufacturers in NAFTA built over 1.4 million light vehicles (+11 percent). The majority (56 percent) were built in US plants. Far fewer (44 percent) rolled off production lines in Mexico, even though production there rose to 620,000 units (+46 percent) within one year owing to the introduction of new models.
US production by the German OEMs came to 803,000 light vehicles in 2017, which was indeed down slightly on the previous year (-6 percent) but here, too, we recorded better results than overall US production: total light vehicle production lost 8 percent, falling to close to 11 million units. This snapshot must not obscure the fact that the German manufacturers have roughly trebled their US production since 2010, while overall US light vehicle production has only added 45 percent.
For the German OEMs, therefore, the US is not only an important strategic market but increasingly also a significant production location.
Third: the German manufacturers and suppliers are becoming more and more important to industry in the US.
German facilities in the US are continually gaining importance for the German vehicle makers and suppliers. It is also true that the German OEMs and suppliers are becoming ever more important in the US automotive industry.
For example, 40 percent of vehicles built in the US by the German manufacturers are also sold in the US. Another 6 percent go to buyers in the other two NAFTA countries.
This also means that more than half of all cars that our OEMs produce in the US are exported to Europe, Asia and the rest of the world. And that is around 430,000 vehicles.
Our share of all US exports (of light vehicles) therefore amounts to roughly one quarter, i.e. three times as much as our share of the US market.
A look at German passenger car production throughout NAFTA shows that 44 percent of new cars are destined for countries outside NAFTA.
But what about trade in the opposite direction? The US still comes second among the top five export destinations for vehicles produced in Germany. In 2017, about 500,000 light vehicles from Germany were exported to the United States. In terms of value, the US is actually the number one destination for passenger cars, light trucks and supply products from Germany.
However, while we have been strategically expanding our production in the US for several years, exports from Germany have been decreasing. The reduction over the last four years (2013 to 2017) comes to one quarter, i.e. around 160,000 light vehicles.
This means that in the US, too, the German OEMs are strengthening their presence on the large markets, and the trend is toward local production.
Direct investment and unrestricted international trade are two sides of the same coin and go hand-in-hand. The US benefits from both sides of this coin.
Furthermore, there will be more potential for transatlantic trade and for investment if the negotiations on a transatlantic trade agreement can be resumed soon. We Europeans are working on this.
German suppliers have trebled the number of their US facilities since the end of the 1990s.
The German OEMs employ over 36,000 people in the US. There are another approx. 80,000 employees at German suppliers. This high level of employment comes about because the suppliers’ customers are not only the German OEMs, but also other manufacturers that produce in the US or in NAFTA. Since the end of the 1990s, the German suppliers have trebled the number of their plants in NAFTA to over 430, and in the US alone the number of facilities has risen from nearly 90 to around 270. This is a clear expression of our commitment to the United States and our activities here!
The division of labor within NAFTA is also economically important to the US. For instance, shock absorbers and torque converters are made in Mexico and delivered just-in-time to the production lines in US automotive plants. The large suppliers long ago established worldwide supply chains that benefit the US in particular. Every measure that restricts or hampers the exchange of goods would have a major impact on these supply chains for the US.
Fourth: US market will remain stable in 2018
What do we expect in 2018? The economic prospects are good. We see consumer confidence continuing, due in part to rising disposable incomes. Employment is riding high, and unemployment is at 4.1 percent, which is the lowest level for 17 years.
The investment conditions are also good, and financing conditions are favorable. This paves the way for another respectable automotive year in the US.
Following the keen growth of the US automotive market for seven years up to 2016, we may expect that 2018 will, like 2017, bring a small contraction. In 2018 we expect a volume close to 17 million light vehicles.
Given that the German OEMs are continuing their model offensive, I expect that we will be able to increase our market share once again in 2018.
Head of Department Press
Tel: +49 30 897842-120
Fax: +49 30 897842-603
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- Notification shares buy-back: DIGI COMMUNICATIONS N.V. reports to the regulated market the transactions which occurred under the DIGI symbol, 2 – 6 Mar 2020
European Customer Data Platform Industry Grows Quickly Despite Limited Funding: CDP Institute
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- Notification shares buy-back: DIGI COMMUNICATIONS N.V. reports to the regulated market the transactions which occurred under the DIGI symbol, 24 – 28 Feb 2020
- EH GROUP ENGINEERING awarded EU Horizon 2020
- Notification shares buy-back: DIGI COMMUNICATIONS N.V. reports to the regulated market the transactions which occurred under the DIGI symbol, 17 – 21 Feb 2020
- Digi Communications NV announces the release of the Preliminary Financial Results for year ended 31 December 2019
- Notification shares buy-back: DIGI COMMUNICATIONS N.V. reports to the regulated market the transactions which occurred under the DIGI symbol, 10 – 14 Feb 2020
- Reporting of legal documents concluded by DIGI Communications N.V. in January 2020 or in other period but effective in January 2020, in accordance with article 82 of Law no. 24/2017 and FSA Regulation no. 5/2018
- Digi Communications NV announces Investor Call on the Preliminary Financial Results for the year ended 31 December 2019
- Consolidation Looms for Fast-Growing Customer Data Platform Industry: CDP Institute Report
- Notification shares buy-back: DIGI COMMUNICATIONS N.V. reports to the regulated market the transactions which occurred under the DIGI symbol, 3–7 Feb 2020
- Digi Communications N.V. hereby reports successful closing of the offering of senior secured notes by RCS & RDS S.A., its Romanian subsidiary
- Notification shares buy-back: DIGI COMMUNICATIONS N.V. reports to the regulated market the transactions which occurred under the DIGI symbol, 27 – 31 Jan 2020
- Digi Communications N.V.: Independent Limited Assurance Report issued by the external auditor on 30 Jan 2020 regarding the information included in the current reports under Law 24/2017 (Article 82) and FSA Regulation no. 5/2018
- Digi Communications N.V.: Rectification of the report published on 15 Jan 2020, regarding legal documents concluded by DIGI COMMUNICATIONS N.V. in other periods but effective in Dec 2019, in accordance with article 82 of Law no. 24/2017 and FSA Regulation no. 5/2018
- Digi Communications N.V. reports the upsize and successful pricing of the offering of senior secured notes by RCS & RDS S.A., its Romanian subsidiary
- RCH To Present New Smart ECR, Robust and Vintage POS Systems at EuroShop 2020
- Notification shares buy-back: DIGI COMMUNICATIONS N.V. reports to the regulated market the transactions which occurred under the DIGI symbol, 20 – 24 Jan 2020
- Digi Communications N.V.: (i) launch of an offering by RCS & RDS S.A. of senior secured notes; (ii) issuance of a notice of conditional full redemption of all outstanding €550.0m 5.0% senior secured notes due 2023 issued by the Company and (iii) restatement by the Company of its unaudited interim condensed consolidated financial statements for the 9-month period ended 30 Sep 2019
- Notification shares buy-back: DIGI COMMUNICATIONS N.V. reports to the regulated market the transactions which occurred under the DIGI symbol, 13 – 17 Jan 2020
- Reporting of legal documents concluded by DIGI Communications N.V. in December 2019 or in other period but effective in December 2019, in accordance with article 82 of Law no. 24/2017 and FSA Regulation no. 5/2018
- Notification shares buy-back: DIGI COMMUNICATIONS N.V. reports to the regulated market the transactions which occurred under the DIGI symbol, 6 – 10 Jan 2020
- Berlin-based SuitePad named Best Places to Work in Hotel Tech 2020 category at HotelTechReport.com’s HotelTechAwards
- Notification shares buy-back: DIGI COMMUNICATIONS N.V. reports to the regulated market the transactions which occurred under the DIGI symbol, 30 Dec 2019 – 3 Jan 2020
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