Germany - Country Commercial Guide

This is a best prospect industry sector for this country. Includes a market overview and trade data.

Last published date: 2021-11-16


Total market size = (total local production + imports) – exports

Aerospace & Defense Market in USD millions

(The security market is not reflected in the table but in the written paragraph below.)





2021 (Estimated)

Local Production





Total Exports





Total Imports





Total Market Size





U.S. Imports = U.S. Market Share





EUR-USD Exchange Rate




1.20 projected

U.S. aerospace & defense manufacturers produce the highest trade surplus, year after year, of all manufacturing sectors. According to TradeStats Express, a U.S. Department of Commerce-furnished database showing the latest global patterns of U.S. merchandise trade, the 2020 U.S. aerospace exports to Germany amounted to USD 8.10 billion. The trade surplus was USD 6.28 billion, representing a 20 percent decrease from 2019 (USD 7.85 billion). These figures are in stark contrast to the European statistics stating U.S. aerospace imports of USD 2.95 billion. This is due to a different approach in calculating the sale of sub-systems and components. Aerospace & defense is complemented by homeland security & public safety, an industry spanning across 15 vertical markets with a projected global turnover of more than USD 500 billion in 2021. Both industries are grappling with the impact of the coronavirus pandemic but, according to BNP Media’s SDM Magazine, the “security segment fared much better than originally expected”. This is true for the German market as well where some of the companies had their best year yet.

In the aviation segment, the situation was quite different. Perhaps no other industry has been harder hit overall than aviation, particularly the airline industry. In May 2021, German air traffic decreased by 85.5 percent compared to May 2019 and increased by 582.5 percent compared to May 2020. Due to the long order cycles and a significant backlog in aircraft production, aerospace manufacturing suffered a lot less than aviation. Last year’s CCG projected that German aerospace manufacturing would shrink by 35 percent in 2020. In April 2021, the German Aerospace Industries Association (BDLI) reported that the revenues only declined by 24.4 percent, from EUR 41 billion or USD 45,9 billion in 2019 to EUR 31 billion or USD 35.4 billion in 2020. A promising “take-off” could be seen in the first half of 2021 and year-on-year growth of around 15 percent is expected. It is noteworthy that some 8,200 aerospace manufacturing jobs were lost until April 2021 because of COVID-19. During the rebound, U.S. manufacturers should be well-positioned to benefit from gradual market growth in Western Europe, especially Germany.

Germany has plenty of trade shows which could be significant for making first inroads into the market. It hosts the world’s third-largest trade show for aerospace & defense (ILA Berlin Air Show), the world’s largest trade show for aircraft cabin interiors (Aircraft Interiors Expo/AIX), and Europe’s largest trade show for general aviation (AERO). The major safety & security shows that are relevant for the German market are held in Essen (Security Essen) and Düsseldorf (A+A), but also in London (DSEI) and Paris (Milipol). All of them are ideal platforms for U.S. companies to meet with potential buyers and partners, either virtually or in person.

Leading Sub-Sectors

Germany has the third-largest aerospace & defense market in Europe, with 2020 revenues at USD 35.4 billion, following the UK and France. Some three quarters, around USD 26.2 billion, of the German production are exported. France received a fourth of the German exports with USD 6.7 billion. To a large degree, these exports are attributable to Airbus intra-company trade as part of their geographically dispersed production model with major sites in Germany and France.

Looking at the security market, according to the Federal Association of the German Security Industry (BDSW), the German homeland security & public safety market amounted to EUR 15 billion or USD 17.2 billion in 2020, compared to EUR 17.2 billion or USD 20.4 billion three years ago. The decline appears quite significant in view of the strong sales development in some submarkets since the outbreak of the coronavirus pandemic at the beginning of 2020. It is safe to assume that the industry saw modest but steady growth until then, mostly due to ongoing upgrades of the German internal security and migration enforcement infrastructure and an increased need for security services. Last year, the security services market made up more than half of the overall market and grew by 4.5 percent to EUR 9.2 billion or USD 10.5 billion from EUR 8.8 billion or USD 9.9 billion in 2019.

Aerospace occupies a prominent position in the German government’s strategic considerations. The Federal Ministry of Economic Affairs and Energy (BMWi) lists aerospace as a key industry with high growth rates and a strong industrial core in Germany. The revised and updated “2020 Technology Strategy of the German Aerospace Industry” builds on BMWi’s earlier “Aerospace Strategy”, underlining the particular importance of the aerospace sector for Germany as an industrial country both technologically and economically. Besides aiming at increased competitiveness, the aerospace sector promises to make significant contributions to overarching societal goals, mainly with regards to the aspirational target of achieving climate neutrality by 2050, developing sustainable aviation fuels (SAFs), reducing the noise pollution, and improving the environmental record of aircraft. Moreover, the BMWi has initiated the 6th iteration of the Aerospace Research Program (LuFo), a grant program for aerospace research and technology projects, in 2018. In May 2020, the German government approved a EUR 9 billion (USD 10,26 billion) aid package for German flag carrier Lufthansa, turning them into the single largest shareholder in Europe’s second-largest airline. Similar measures were taken in France (Air France, KLM), Ireland, Spain, and the UK (IAG: Aer Lingus, British Airways, Iberia, Level, Vueling). These measures mainly helped to stabilize the European air transport industry. European aviation has been hit especially hard and the crisis is still ongoing. With varying restrictions from country to country and travel bans that cover entire regions, lethargic recovery of international air travel has not been successful to date. As mentioned above, aerospace manufacturing was less affected than aviation and able to adapt to the current challenges well, but ultimately it relies on the return of the global air transport industry to pre-corona levels. Lufthansa expects that it could take until 2024.

Best prospects for U.S. exporters exist in the following segments: Commercial aircraft, business jets, turboprops, helicopters, UAVs, structures, propulsion systems, subsystems for aerospace vehicles; military aircraft, air defense systems; spacecraft, launch systems, communications systems; access control, identity management, integrated systems, security services. The main vertical markets for homeland security & public safety in Germany are airport security, smart borders, telecommunications and critical infrastructure, and police modernization.

Policy Objectives and Challenges

U.S. suppliers should be aware of the effects of the U.S. Export Control Reform (ECR) regarding changes to the EAR and ITAR for U.S. aerospace & defense companies. The Commercial Service will continue to support U.S. companies by conducting frequent and active outreach to the Federal Office of Bundeswehr Equipment, Information Technology and In-Service Support (BAAINBw) in Koblenz, Rhineland-Palatinate, and following the latest aerospace, defense and security-related policy developments and discussions in Germany. On an international level, insights will be gained from organizations such as the Aerospace and Defense Industries Association of Europe (ASD), the U.S. Aerospace Industries Association (AIA) and Homeland Security Research (HSR) in Washington, D.C. to understand their positions on transatlantic trade issues, and communicate U.S. objectives.

In several recent tenders, the German military and some state police forces have imposed non-ITAR/EAR/PESCO clauses on prospective bidders, asking them to attest that their products do not fall under the respective regimes. This excludes many U.S.-designed and U.S.-made defense-sector goods.


Opportunities include a 4.5 gen fighter jet program for the German Air Force (a preliminary decision has been made in April 2020 but the parliamentary approval is outstanding); future maritime mine countermeasures for the German Navy; the TEN-DLBO tactical radio program for the German MOD; gas turbines for 4 multi-role combat ships (MKS 180) for the German Navy; Scalable Space Inertial Reference Units (SSIRU-L) for SARah, Germany’s radar reconnaissance satellite constellation; large twin-engine transport helicopters for the German Federal Police.

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