MANUFACTURING TRENDS IN THE GERMAN AUTOMOTIVE INDUSTRY

Open Access
Author:
Ayd, Jr., William
Area of Honors:
Supply Chain and Information Systems
Degree:
Bachelor of Science
Document Type:
Thesis
Thesis Supervisors:
  • Robert Alexander Novack, Thesis Supervisor
  • Edward J Glantz, Thesis Supervisor
  • John C Spychalski, Honors Advisor
Keywords:
  • german automotive industry
  • car manufacturing
  • auto industry trends
Abstract:
This paper looks at manufacturing and sales trends of German passenger vehicles from automakers Volkswagen AG (and therein Audi), Daimler AG, BMW, and Porsche in order to see if their current manufacturing strategies, which are heavily focused within Germany, will remain economically justified and sustainable in the long run. In the context of this paper I look at “economically justified” from a total supply chain cost perspective, i.e. production in a country with higher labor costs may still be “economically justified” if it has a close proximity to the target market, since in this case lower transportation costs may offset higher labor costs. This topic is important because automobile manufacturing within Germany is one of the largest sources of employment, GDP, and tax revenue for the country. Given that automobile manufacturing around the globe has struggled following the financial crisis of 2008, it becomes even more critical that the potential strengths and weaknesses of the aforementioned companies be examined. In this examination of the German automotive industry however, the fact that manufacturing in Germany is more expensive in terms of labor costs and is further away from growing markets than other labor market alternatives makes any marginal manufacturing of vehicles within Germany economically unjustified without the intervention of government.