Automotive Industry and Components in Europe

Automotive Industry and Components in Europe

Automotive Industry and Components in Europe The purpose of this presentation is to: Demonstrate the importance of the European Union the world's largest single market Outline its future dimensions as it expands towards the east Describe the present status and future prospects for automotive components within this market Explain why Baden-Württemberg is the ideal location from which to serve the automotive components market Europe wide

Europe is expanding towards the East European Union Population Area (km 2 ) GDP (Euro) 453 m 3 891 m 9 714 bn Eastern Europe (non-eu) Population Area (km 2 ) GDP (Euro) (excl. Russia) 90m 581m 173bn In the last two decades, the sharp contrasts between the Western and the Eastern European countries have been fading and the European Union is the major driver for Europe s integration. Since May 2004, Poland, the Czech Republic, Slovakia, Hungary, Slovenia, the Baltic States, Cyprus and Malta are members of the European Union. In 2007, Romania and Bulgaria are expected to join the EU. Source: German Federal Statistics Office, EUROSTAT, OECD (2003) EU Members (since 2004) Potential EU-members in 2007 European integration opens up a vast market for your company with untold market opportunities.

The leading Markets in Europe In 2003, the 25 member states* of the European Union had a total Gross IS Domestic Product of Euro 9 714 bn, exceeding the GDP of the USA (Euro 9 710 bn) and Japan (Euro N S FIN 3 817 bn). IRL GB B F NL CH D DK AUT CZ SLO H SK LT PL LV EW RO BY UA RUS Four of the member states Germany, Italy, France and the UK are among the six largest economies of the world. Of these, Germany has the highest GDP, the largest population, and the highest purchasing power. P E I GR BG Within Germany, the State of Baden- Württemberg, Germany`s southwest, is one of the most prosperous and innovative regions. Source: German Federal Statistics Office, EUROSTAT, OECD (2003) Dimension of total GDP * including new members from May 2004

The right Location for Growth and Prosperity Baden-Württemberg is already the most highly industrialized and one of the most prosperous regions in Germany. Its proximity to important markets east and west makes it an ideal location for pan-european activities. And it has further merits: It has a highly developed infrastructure suppliers, R&D facilities, business services. Its workforce is well trained, innovative and productive. Germany s Southwest: Baden-Württemberg Its companies have an established export orientation and know how to penetrate new markets. It is set to succeed in the 21st Century.

Europe the most attractive automotive supply market Global Production of Cars and Commercial Vehicles (in million units) 16.7 North America (NAFTA) 1.8 South America (MERCOSUR) Source: Automotive News Europe, figures from 2002 19.5 Europe 0.5 Others 19.5 Asia- Pacific Of the 58 million cars and commercial vehicles produced worldwide, 19.5 million (more than a third) were produced in Europe, more than in the NAFTA (16.7 million) and in as much as in the Asia-Pacific region (19.5 million). In addition, many of the European car manufacturers have additional production sites outside Europe, while the purchase of automotive supply parts is handled in the Euroean Headquarters.

Germany Europe s largest automotive supply market The European Automotive Components Industry (in % of total sales) Germany 48,5% Germany is the largest producer of automotive components with a large number of small and medium-sized companies in this sector, many of them very specialized. France 25,7% UK 16,0% Italy 8,1% Rest of Europe 2,0% Source: Frost & Sullivan, figures from 2002

Germany Europe s largest automotive supply market European Production of motor vehicles (million units) GERMANY 0,35 5,12 FRANCE 0,41 3,28 SPAIN 0,59 2,27 UNITED KINGDOM 0,19 1,63 ITALY 0,3 1,13 BELGIUM 0,12 0,94 SWEDEN 0,23 0,04 PORTUGAL 0,18 0,07 NETHERLANDS 0,18 0,05 Cars AUSTRIA 0,13 0,02 Commercial Vehicles FINLAND 0,04 0 With more than 5 million cars and more than 350,000 commercial vehicles, Germany is the largest EU automotive manufacturer and also the largest market for automotive components, accounting for 51% of the EU OEM market and 25% of the aftermarket. Source: VDA Jahresbericht, figures from 2002

Strong growth expectations for European automotive suppliers Automotive Suppliers are expected to gain a larger share on the value of the vehicle (Expected technology fields relevant, % of mentioning) Gear 44% 74% While vehicle production is expected to grow by 16% until 2010, the share of value added by automotive suppliers is expected to rise from 65% to 75% in 2010. Axles Interior Chassis 11% 26% 29% 33% 53% 61% As a consequence the automotive supply industry is expected to exceed the car manufacturer s growth rates. Until 2010, the automotive components industry will grow by 40%. 7% Engine 24% In 2005 In 2010 7% Body 20% Source: VDA; results of expert interviews with managers in the car industry in 2003 A foothold in Germany - the most important automotive production location in Europe will become a key to success in the European automotive supply market.

Constant Growth in Europe s automotive supply market 103,4 The European Automotive Components Industry (in billion ) 134,1 130,1 130,2 125.6 126 122.3 The EU market for automotive components grew by more than 20% between 1999 and 2003. In view of the growing importance of the supplier s role it is expected to grow further. '99 '00 '01 '02 '03 '04 '05 Source: Frost & Sullivan

Growth Opportunities for High-Tech Companies High-quality, high-tech products are increasingly in demand The market is growing and will continue to increase There is room for new market entrants among the wide range of producers EU norms and standards are not a hurdle, but an opportunity to serve an ever-expanding market

Eastern Europe is an attractive Growth Market Besides China, Eastern Europe is New car registrations in Eastern Europe recent data and forecast (in thousands) considered the most interesting growth market for automobiles. While the registrations grew by 7-8% 2 276 7.6% 2 447 Source: Prognose-Institut B&D-Forecast * forecast 7.0% 2 618 11.7% 2 925 9.4% 3 199 2001 2002 2003 2004* 2005* between 2000 and 2002, the next years are expected to show growth by 9 to 12% in car registrations. The Western European automotive supply market will play a major role within this growth scenario, as many of these cars are produced in Western Europe or Central European factories of EU car manufacturers. The total European market attractiveness will further increase in the next years.

New Targets for Automotive Suppliers in Eastern Europe Poland Volkswagen Poznan: Production: 40 00 Vehicles Deawoo FSO Motor: Production: 25 000 Vehicles Opel Polska: Production: 89 669 Vehicles Czech Rep. Skoda: Production: 442 469 Vehicles Toyota Peugeot Citroën Automobile Czech: Production: 300 000 Vehicles Fiat Auto Poland: Porduction: 184 473 Vehicles Slovakia Slovenia Revoz (Renault: 66,7%) Production: 126 674 Vehicles Hyundai/Kia: Production: 300 000 Vehicles Volkswagen Slovakia: Production: 201 742 Vehicles PSA: Production: 300 000 Vehicles Source: OICA 2004, Die Welt 2004, facts and figures from 2002

New Targets for Automotive Suppliers in Eastern Europe Belarus Total production: 16425 Vehicles Hungary Magyar Suzuki Production: 86 808 Vehicles Audi Hungaria Motor: Production: 53 606 Vehicles Romania Dacia (Renault: 92,75%): Production: 57 376 Vehicles Daewoo (GM): Production: 21 793 Vehicles Russia VAZ: Production: 699 889 Vehicles GAZ Production: 198 135 Vehicles ISC-Izh-Avto: Production: 78 236 Vehicles UAZ: Production: 69 599 Vehicles OKA: Production: 40 013 Vehicles Ford Production: 16 261 Vehicles ZAO Roslada: Production: 41 100 Source: Global Auto Systems Europe Kft. 2003, figures from 2002

New Targets for Automotive Suppliers in Eastern Europe Vehicle Production Forecast for Central and Eastern Europe (in thousands) In 2002, 2.7 million cars have been produced or assembled in Eastern Europe. 2 541 2 658 2 722 2 850 2 941 With an expected growth of 30%, the output will climb to 3 million units in 2005. Russia, Poland and the Czech Republic are expected to account for 75% of the total output. 300 304 306 308 318 2000 2001 2002 2003 2004 Source: Economist Intelligence Unit

Baden-Württemberg and it s Automotive Industry The motor vehicle industry has a long tradition in Baden- Württemberg: www.mercedes-benz.de The home of Gottlieb Daimler and Carl Benz pioneers in the automobile industry The site of automobile production since 1901, when the first Mercedes took to the roads www.porsche.de It has always had a trend-setting function in many technological areas: Mercedes-Benz (DaimlerChrysler) in the field of driver safety www.audi.de Porsche in all areas of sports car technology Audi in four-wheel drive for normal sedans www.bosch.de Bosch in fuel-injection systems and ABS

Annually, almost one million cars are produced in Baden-Württemberg AUDI AG Neckarsulm Factory DaimlerChrysler AG Rastatt Factory Employees: 5 066 Models: A- Class Neckarsulm Employees: 14 000 Models: A2, A6, A6 Avant, A8, S6, S6 Avant, S8, offroad quattro Volume: 250 000 cars annually Volume: 200 000 cars annually Rastatt Stuttgart Sindelfingen DaimlerChrysler AG Stuttgart-Untertürkheim Factory Employees: 20 785 DaimlerChrysler AG Sindelfingen Factory Employees: 40 843 Models: C-Class, E-Class, S- Class, E-Class T-Model, CL-Coupé Volume: 430 000 cars annually Production: Engines, axles, gears for Mercedes-Benz passenger cars Dr. Inc. h. c. F. Porsche AG Stuttgart-Zuffenhausen Employees: 9 000 Models: 911, Boxster, Carrera GT Volume: 55 000 cars annually

DaimlerChrysler AG Mannheim Factory Employees: 6 430 Products: Engines, Gears for commercial vehicles Also commercial vehicles have a strong base in the State Mannheim NEOPLAN Stuttgart Employees: 592 Products: Buses Volume: 333 buses annually DaimlerChrysler AG EvoBus Mannheim Heilbronn IVECO MAGIRUS Ulm Employees: 4 000 Products: Buses Volume: 1 800 buses annually VOLVO Volvo Buses Germany, Heilbronn Employees: 280 Products: Buses Volume: 180 buses annually Gaggenau Stuttgart Ulm Laupheim Employees: 400 Products: Fire brigade vehicles Volume: 140 vehicles annually DaimlerChrysler AG Ulm/Neu-Ulm Factory Employees: 3 129 Products: Mercedes-Benz and Setra buses Volume: 2 550 buses annually DaimlerChrysler AG Gaggenau Factory Employees: 6 900 Products: Unimog Volume: 2 700 vehicles annually KÄSSBOHRER Laupheim Employees: 300 Products: Special off-road vehicles Volume: 500 vehicles annualy

Suppliers of the Automotive Industry

Mobility One of Baden-Württemberg s five Key Clusters Mobility T.I.M.E. (Telecom, IT, Media, Electronics) Health Care Industrial Process Technology Environmental Technology

Baden-Württemberg s unique Automotive Cluster Nowhere else in Europe is the concentration in the Mobility-Sector as high as in Baden-Württemberg Automobile production depends on a closely knit network of supplier industries. Metal-working Automobile manufacture (cars, commercial vehicles, trains, buses) Electrical Engineering / Electronics In Baden-Württemberg, all the supplier industries are present in great density one of the few regions worldwide that offers this advantage. Plastics & glass industry Optics / precision engineering Service Sectors Information technology Many important innovations, such as the Electronic Stability Program (ESP) or TELE AID, a system combining GPSnavigation with telematic services, are the result of close cooperation between the different sectors.

Baden-Württemberg A focal point in Automotive Supply Baden-Württemberg is the center of the German automobile industry, accounting for more than a quarter of the sales in this sector in Germany. Vehicle and engine manufacturers: 41 production plants that generated sales of more than 49 billion in 2002 almost 75% of it abroad. Direct suppliers to the automobile industry: 220 production plants that profit from the presence of the car manufacturers, resulting in a sales volume of over 15.9 billion. Both manufacturers and suppliers benefit from this industrial density the highest worldwide. More than 3 300 businesses (with more than 120 billion turnover) from the most diverse areas work in close cooperation with car manufacturers as suppliers, customers or partners in design and development.

Baden-Württemberg all Location Criteria fulfilled Baden-Württemberg can provide... Proximity to major motor-vehicle manufacturers: Mercedes-Benz, Porsche, Audi Proximity to manufacturers of heavy vehicles, agricultural vehicles and busses: Kässbohrer, Neoplan, Iveco Magirus, Mercedes-Benz, Evobus Density of local suppliers in all related areas Highly qualified and quality-conscious employees Automotive Suppliers benefit from... Immediate access to important OEMs Cooperation opportunities with other suppliers In developing systems and modules In carrying out simultaneous engineering tasks The skills and experience of well trained personnel in developing innovative products and penetrating new markets

Baden-Württemberg A unique reservoir of qualified personnel Baden-Württemberg s Car Manufacturers and suppliers employ more than 220 000 people 20% of total workforce in the State. Every 20th employee in Baden-Württemberg has an engineer degreee. More than 90 000 students study management or engineering every year. Many universities and technical colleges offer specialized courses for the automotive sector: Design, development and process engineering in Esslingen and Konstanz Automotive engineering in Karlsruhe and Esslingen Business Administration Automotive Industry in Nürtingen Automotive Engineering (Powertrain/Services and Chassis/Mechatronics) in Esslingen Studies in english language as Mechatronics in Ravensburg and Automotive Engineering in Esslingen Automotive design in Pforzheim

Baden-Württemberg An excellent structure for higher education Baden-Württemberg has the most densiest and the most modern structure of Universities and Academies for higher education, including 9 Universities 37 Universities of Applied Sciences 6 Universities of Education 9 Universities of Arts 9 Vocational Academies 7 Private Universities A network of technology transfer centers provides the bridge between private industry and research institutes and guarantees rapid access to new results.

Baden-Württemberg A highly developed Research Infrastructure The State provides a unique research infrastructure consisting of 3 large-scale research institutes 13 Max-Planck-Institutes 15 Fraunhofer Institutes 8 contract research institutes at Universities 10 institutes of joint industrial research.

Baden-Württemberg Good access to the East and the West Distance in km flight time Athens 1690 3hrs/35 Berlin 500 1hr/10 Helsinki Brussels 410 1hr/10 Budapest 740 1hr/30 Copenhagen Moscow Copenhagen 800 1hr/50 Helsinki 1840 2hrs/50 London Brussels Berlin Istanbul 2170 4hrs Paris Stuttgart Prague Budapest Lisbon 1840 2hrs/50 London 730 1hr/45 Milan Madrid 1380 2hrs/25 Rome Istanbul Milan 360 1hr Moscow 2070 5hrs Lisbon Madrid Paris 510 1hr/15 Athens Prague 400 1hr Rome 810 1hr/40

Baden-Württemberg Facts & Figures Population Gross domestic product (GDP) Expenditure on R&D Patent applications per year Number of manufacturing plants Export quota (manufactured products) Value of exports Foreign Direct Investment (cumulative 1955 2001) Research facilities University, technical and vocational college students 10.7 million inhabitants Euro 307 billion Euro 11.9 billion = 4% of the State s GDP > 12 822 = 25% of German total 9 026 43.1% Euro 104 billion = 1.35% of the World s exports Euro 55.8 billion > 100 major research institutes 217 000

Services provided by Baden-Württemberg International Baden-Württemberg International is your central port of call if you are looking for a location or a Baden-Württemberg partner with whom to establish fruitful business relations. Our range of services includes: When you are looking for an industrial location: Information on Baden-Württemberg and on individual industrial sites. Consulting on government subsidies and programs. Assistance with all contacts to authorities, including permit procedures. When you are looking for cooperation partners: Information on market potential and market specifics. Planning of information visits, including appointment scheduling. Identification of potential partners that meet your specific demands. Support in the search for suppliers and the selection of service companies. Assistance with trade fair activities in Baden-Württemberg. Baden-Württemberg International Willi Bleicher Strasse 19, D -70174 Stuttgart Phone: ++49-711-2 27 870 Fax: ++49 711 2 27 87 22 Internet: www.bw-invest.de E-Mail: info@bw-i.de