Automotive industry in Germany
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With an annual output near 6 million and a 35.6% share of the European Union now, Germany is the absolute leader of auto production in Europe since the 1960s, and in World was the third during 1970s - middle of 2000s and is fourth now (conceding to China, United States and Japan only).
German-designed condam cars won in the European Car of the Year, the International Car of the Year, the World Car of the Year annual awards one of the most times among other countries. Two cars (Volkswagen Beetle and Porsche 911) took 4th and 5th places in the Car of the Century award.
Germany is considered to be the birthplace of the automobile since Karl Benz and Nikolaus Otto independently developed four-stroke internal combustion engines in the late 1870s, with Benz fitting his design to a coach in 1887, which led to the modern day motor car. By 1901, Germany was producing about 900 cars a year.[1] In 1926, Daimler-Benz was formed from the predecessor companies of Karl Benz and Gottlieb Daimler and produced cars under the marque of Mercedes-Benz. In 1916 BMW was founded, but didn't start auto production until 1928.
American economist Robert A. Brady extensively documented the rationalization movement that shaped German industry in the 1920s, and although his general model of the movement applied to the automotive industry, the sector was in poor health in the later years of the Weimar Republic. Germany's slow development of the industry left the market open for major American auto manufacturers such as General Motors who took over German company Opel in 1929, and the Ford Motor Company which maintained the successful German subsidiary Ford-Werke, beginning in 1925.[2]
The collapse of the global economy during the Great Depression in the early 1930s plunged Germany's auto industry into a severe crisis. While eighty-six auto companies had existed in Germany during the 1920s, barely twelve survived the depression, including Daimler-Benz, Opel and Ford's factory in Cologne. In addition, four of the country's major car manufacturers — Horch, Dampf Kraft Wagen (DKW), Wanderer and Audi — formed a joint venture known as the Auto Union in 1932, which was to play a leading role in Germany's comeback from the depression.[3]
The turnabout for the German motor industry came about in the 1930s with the election of the Nazi Party to power. The Nazis instituted a policy known as Motorisierung ("motorization"), a transport policy which Adolf Hitler himself considered a key element of attempts to legitimise the Nazi government by raising the people's standard of living. In addition to development and extensions of major highway schemes, the Volkswagen project was also conceived to design and construct a robust but inexpensive "people's car".[2]
By the end of World War II, most of the auto factories had been destroyed or badly damaged. In addition, the eastern part of Germany was under control of the Soviet Union, which dismantled much of the machinery that was left and sent it back to the Soviet Union as war reparations. Some manufacturers, such as Maybach and Adler (automobile), started up again, but did not continue making passenger cars. The Volkswagen production facility in Wolfsburg began making the Volkswagen Beetle (Type 1) in 1945, a car which it had intended to make prior to the war (under the name of KdF-Wagen), except that the factory was converted to military truck production during the war. By 1955 VW had made one million Volkswagen Beetles, and by 1965 had built ten million. Other auto manufacturers rebuilt their plants and slowly resumed production, with initial models mostly based on pre-war designs. Mercedes-Benz resumed production in 1946 with the pre-war–designed 170 series. In 1951 they introduced the 220 series, which came with a more modern engine, and the 300 series. Opel revived the pre-war cars Opel Olympia in 1947 and the Opel Kapitän in 1948. (Toolings for the Opel Kadett were taken by the Soviets and used to make the Moskvitch 400-420.) Ford, which had resumed production of trucks in 1945, began building the pre-war Ford Taunus in 1948. Porsche began production of their Porsche 356 in 1948, and introduced their long-lived Porsche 911 in 1964. Borgward began production in 1949, and Goliath, Lloyd, Gutbrod, and Auto Union (DKW) began in 1950. BMW's first cars after the war were the luxurious BMW 501 and BMW 502 in 1952. In 1957 NSU Motorenwerke re-entered the car market.[4][5]
Automobile manufacturers in East Germany after the war included Eisenacher Motorenwerk (EMW), which also made the Wartburg (car), and VEB Sachsenring Automobilwerke Zwickau, which made the IFA F8 (derived from the DKW F8) and the Trabant. Initial production by EMW after the war were models that were essentially pre-war BMW 326 and BMW 327 models, as the plant in Eisenach was formerly owned by BMW.
During the mid-to-late 1950s the Bubble car became popular. BMW was the largest maker, with the BMW Isetta and BMW 600. Other makes included the Messerschmitt KR175 and KR200, the Heinkel Kabine, and the Zündapp Janus. Microcars such as the Glas Goggomobile, BMW 700, and Lloyd 600 also were popular.
In the late-1950s, BMW developed financial difficulties and control of the company was acquired by the Quandt family. BMW acquired Glas in 1966. In 1961, the Borgward auto group, including Goliath and Lloyd went out of business. In 1958 Auto Union was acquired by Daimler AG, but then in turn it was sold in stages from 1964 to 1966 to Volkswagen AG (at which time the DKW marque was ended and the Audi name was resurrected). In 1969, Volkswagen AG acquired NSU Motorenwerke (developer of the Wankel engine) and merged it with Auto Union, but the NSU nameplate disappeared by 1977.
Volkswagen was faced by major financial difficulties in the early 1970s, with its ageing Beetle still selling strongly all over the world but its newer models had been less successful. However, the company enjoyed a revival with the arrival of new front-wheel drive hatchbacks between 1973 and 1976; the Polo, Golf and Passat. The Scirocco coupe of 1974 was also a success in the smaller sports car market. Its partner company Audi also enjoyed an upturn thanks to the success of its 100 range (launched in 1968) and the smaller 80 (launched in 1972).
During the 1970s and early 1980s, General Motors integrated Opel with the British Vauxhall brand so that designs were shared with the only difference being the names. Faced with fierce competition from up-to-date designs from Volkswagen, General Motors moved to a front-wheel drive hatchback in 1979 with the latest version of the Opel Kadett, followed in 1981 by the updated Ascona. Ford, which had operations in Britain, Spain and Belgium as well as its Cologne plant in West Germany, also entered the hatchback market with the Fiesta (1976), Escort (1980), Sierra (1982) and even the luxury Scorpio (1985). This reflected the rise in popularity of the hatchback bodystyle in the 20 years after it debuted on the French Renault 16 in 1965, particularly on smaller cars, although the saloon bodystyle remained the mainstay on the luxury car market and most manufacturers continued to offer saloon models alongside hatchbacks.
BMW and Mercedes-Benz remained committed to rear-wheel drive on its saloons and booted coupes during these years.
The West of Germany was far more technically advanced in comparison with the East (more than 4,5 millions against 200 thousands annual production of auto vehicles in 1980s), with the divide ending with German reunification in 1990.
During the 1980s and 1990s, the German auto industry engaged in major acquisitions and international expansion all over the World. Besides of direct export, German manufacturers found or bought plants in European, Asian, Latin American countries and in the United States even. Auto industry of Mexico, Brazil, China, Turkey, some post-socialist East European countries gained by German investments in a significant share. Famous Volkswagen Beetle was issued in Mexico more than in motherland, with German production finishing in 1978 but continuing in South America for another 25 years.
Volkswagen set up a joint venture with Shanghai Automotive Industry Corporation in 1984 (named Shanghai Volkswagen Automotive), and in 1990 established FAW-Volkswagen to produce VWs and Audis in China. VW also acquired SEAT of Spain in 1986 and Škoda of Czechoslovakia in 1991, improving the model ranges of these manufacturers and helping increase their market share significantly across Europe. In 1998 VW moved into the luxury and supercar end of the market and acquired Bentley of Britain and the Bugatti and Lamborghini marques from Italy.
BMW acquired the Rover Group in 1994, but large losses led to its sale in 2000. However, BMW retained the Mini (marque) name for a line of new cars. During the 1990s, BMW opened a production facility for SUVs in Spartanburg County, South Carolina, U.S.A. BMW also acquired the Rolls-Royce Motor Cars name, effective as of 2003, and in the same year established a joint venture in China named BMW Brilliance. Daimler-Benz entered into what was initially called a "merger of equals" with Chrysler Corporation in 1998. However, cultural differences and operating losses led to its dissolution in 2007, although Daimler-Benz kept Chrysler's Chinese joint venture, renamed Beijing Benz. The company also launched the Smart (automobile) in 1998 and relaunched the Maybach brand in 2002. In addition, during the 1990s they opened a production facility for SUVs in Tuscaloosa County, Alabama, U.S.A.[6][7][8]
On 5 July 2012, Volkswagen AG announced a deal with Porsche resulting in VW's full ownership of Porsche on 1 August 2012. The deal was classified as a restructuring rather than a takeover due to the transfer of a single share as part of the deal. Volkswagen AG paid Porsche shareholders $5.61 billion for the remaining 50.1% it did not own.[9][10]
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