Germany - Country Commercial Guide
Advanced Manufacturing

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

Last published date: 2020-10-07

Overview

Advanced Manufacturing (AM) is the convergence of information and communications technologies with manufacturing processes to drive real-time control of energy, productivity, costs and information across factories and companies. In 2011, it was identified as one of the highest-priority manufacturing technology areas in need of federal German investment.

The OPC Foundation (Open Platform Communications) is cooperating with the key German Association, the VDMA (German Mechanical Engineering Industry Association).  In June 2016, these two parties signed an MOU to build an international standards structure utilizing the OPC UA Machine Vision Companion Specification. This machine protocol has been developed to help all automation companies to implement Industry 4.0/IoT with robotics, automation and machine vision software language with their products. For the interfaces UMATI has been set up. UMATI means (universal machine technology interface). Both OPC UA and UMATI enable higher-level data processing in a standardized and more secure manner.

Policy Objectives and Challenges

A major challenge for industry and government is the definition of reference architecture and frameworks necessary for interoperability. They are also challenged with how to build confidence around new and innovative approaches to security. In April 2016, the two major international players, the International Internet Consortium (IIC) and the German-led Industrie 4.0, agreed to collaborate for the benefit of interoperability of systems from the different domains. In Germany, the relevant association, such as the ZVEI (The German Association for Electrical & Electronic Industry), VDMA (German Engineering Association), Bitkom (Federal Association for Information Technology, Telecommunications and New Media) are driving the discussions.

Leading Sub-Sectors

Advanced Manufacturing is believed to provide the best export potential for industries such as Machine Tools/General Industrial Equipment, Robotics, Information and Communication Technology, Process Control Instrumentation and Electronics Industry Production Equipment, Additive Manufacturing and Advanced Materials for the next five to ten years. Through 2025, 84 percent of German manufacturers plan to invest EUR 10 billion per year into smart manufacturing technologies, i.e. the automotive industry about 1.2 bn per year,  machinery & equipment and plant engineering and construction 1.5 bn, electronics and microelectronics industry about 817 million per year, or the metal working industry 424m per year. Today, 75% of the German companies in most industries have implemented digital solutions, and 15 million people are directly and indirectly employed in the advanced manufacturing industries in Germany.

Robotics and Automation

Germany is the fifth largest robot market in the world with about 20,000 industrial robots utilized in various industries each year. In 2018 the number of installations reached a new peak with 26,723 units being installed, accounting for an increase of 26 percent compared to 2017. The main industries are automotive, electrical and electronics, metal working, chemical rubber and plastics, logistics, medical, and the food industry.  Please note that the data includes the industrial/commercial use of robotics only. The Robotics + Automation Association in Germany represents three industry segments: Robotics, Machine Vision and Integrated Assembly Solutions with combined annual turnover of EUR 15.1 billion in 2018. Sales in all three segments accumulated are expected to decline by 5 percent in 2019 to EUR 14.3 billion, followed by an additional decrease of 10 percent in 2020 with a forecast turnover of EUR 12.8 billion. Robotics is currently forecasting a decrease of 3 percent. However, experts predict an average increase of 12 percent annually between 2020 and 2022, when the economic situation has overcome the COVID-19 crisis. New data will be available in September 2020.

Considering the robot density (robots’ utilization per 10,000 worker) Germany ranks 3rd in the world with 322 in 2018, behind Korea (710) and, Singapore (658). The USA ranks 7th with 200, China is 21st (97 estimated).

Future topics are the utilization of artificial intelligence, human-robot collaboration, digital transformation in production, and service robotics in the commercial and health industry, collaborative robots and mobile platforms, e.g. AGV’s, robot leasing like Robot as a Service - RaaS.

Additive Manufacturing and Advanced Materials

Germany is home to Europe’s largest advanced materials market. As of right now the growth rates are hampered by COVID19. It is expected that the sectors will gain momentum instantly as soon as the pandemic is contained by a vaccine. The strong growth of Germany’s high-tech industries requires appropriate materials. Depending on the material, growth rates can amount to 10 -15 percent annually. Among the materials sectors with the strongest market potential are composites and particularly additive manufacturing. Formnext, the major European additive manufacturing trade fair, reached a new floor space and visitor record for their show in November 2019. This year, Formnext is scheduled to take place in Frankfurt, November 10-13, 2020. It is planned as a hybrid event consisting of an exhibit as well as virtual events. The German chemicals and pharmaceutical industry achieved annual sales of EUR 198.2 billion in 2019 which would be a decrease of 2.3% compared to 202.9 bn in 2018. (Source: Destatis, VCI). In 2021, the Germany/DACH country focused Fakuma plastics show will take place in Friedrichshafen, October 12-16.

German Machine Tool and Precision Tool Market

The ongoing boom in almost all user industries worldwide has already driven production output to more than EUR 17 billion in 2019 ($ 9.4 billion). Imports from the USA have been about EUR 134.9 million ($153.8 million) for machines and equipment. The capacity utilization was at about 88.5 percent in 2019, according the German machine tool association. The German market consumption is about EUR 10.7 billion ($12.3 billion).

Germany’s best import segments within the Machine Tool industry are:

Laser-, ultrasonic- machines; machine centers; lathes; drilling machines; grinding, honing and lapping machines; gear cutting machines; sawing, cutting-off machines; bending folding, and straightening machines (incl. presses).

The figures for German precision tools industry - whose most important partner is the USA with more than EUR 655 million imports - are similar with a generated increase of 7 percent in 2018 up to EUR 11.6 billion and expected production of EUR 11.7 billion in 2019.

Trends are high-performance processes, Industrie 4.0, micro processing, direct drives, energy and resource efficiency, composite technology, additive manufacturing, laser beam sources, complete machining and shortening of process chains, besides others.

Sensors and Measuring Technology:

Sensors and measurement technology are another growth subsector. In 2019, the annual turnover of all market players was estimated of EUR 35 billion. 2,300 companies and institutes employed about 250,000 people. In 2017 and 2018, we have seen growth rates of 9% and 10%, whereas the market in 2o19 stagnated by -1%. The export quota is 70%. Major markets are the following industries: automotive, electronics, consumer electronics, security, machinery & equipment, besides others. Major competitors include SICK AG, Siemens Sensor Systems, Bosch Sensortec and Beckhoff Automation. The German industry expects further growth opportunity after COVID 19, particularly through the industrial automation/internet of things.

Opportunities

Germany’s advanced manufacturing companies usually require in-country partners. These partners could be agents and distributors selling to OEMs as final consumers or OEMs as distributors for an exclusively built component. An in-country facility and a membership in one of the German associations is recommended, and system integrators are often the ideal partner for automation and internet of things products and services.

Challenges & Barriers

Germany maintains a highly open and transparent business environment, and there are few formal market access barriers. Probably the greatest challenge to entering the German market is conforming with German electro-technical standards and conformity assessment procedures, which differ markedly from those in the United States. For most electrical components such as plugs and cables, U.S. and European standards are nonaligned. In practice, this means that for most U.S. machinery makers, the additional labor required to assemble machinery for the German market will affect pricing by inflating the price paid by the customer while decreasing the cost competitiveness compared with domestic and other European-made machines. As part of the European Commission’s “Machinery Directive,” machinery sold throughout the EU is required to obtain a CE marking whenever the product is covered by specific product legislation. CE stands for “Conformité Européenne,” and is intended to demonstrate compliance with European safety and environmental standards.

Resources

Trade Events

German Organizations:

U.S. Associations: