Key factors for a successful transformation
Identifying and actively developing opportunity areas. In the coming years, significant market potentials will open up in the fields of electrification, automation, and networking. Companies can receive targeted support in a variety of ways to tap into these opportunities. Innovation networks and start-up initiatives will play an important role in this regard. Both increase innovation activity, in both an evolutionary and a radical sense. In this context, it would also be possible to further strengthen efforts in funding programs associated with the transformation – such as the National Hydrogen Strategy, the initiatives on artificial intelligence (AI) or quantum computing – and to highlight and interlink the automotive aspects. Intensifying cooperation and the transfer of knowledge between industry and science would open up further potential.
- Intensify training and continuing education. New skills are needed not only for the three opportunity areas, but also for other technologies associated with the automotive transition, such as lightweight construction. In close cooperation with companies, educational institutions, and universities, new training and continuing education programs could be developed and supported that address these skills and thus contribute to securing the future of the automotive industry in Germany. This approach would make it possible to develop prospects for skilled workers who are currently still active in the conventional powertrain sector.
- Strengthen networking and cooperation to learn from and with each other. The forty regions that are particularly affected could network with each other in a targeted manner and jointly initiate projects that promise synergies. These could include specific cooperation networks on connecting innovation topics, best practice projects that are scaled up, or a virtual research platform involving research institutes. In any case, the current findings make it possible to match regions and companies with similar challenges, allowing experiences to be shared and resources to be deployed in a bundled manner.
- Develop specific measures in the regions. The forty regions particularly affected are at different stages in the process of automotive transformation. Regions that are home to manufacturers, for example, face different challenges than regions that are primarily characterized by small and medium-sized enterprises (SMEs). The current analysis makes it possible to identify specific potentials in the individual types of regions, which can build on different strengths. This makes it possible to create and implement targeted measures for the successful further development of the regions. One possible way to increase regional resilience would be to establish a network excellence initiative based on the successful idea of an excellence strategy for universities. The problem with knowledge transfer is often the short funding period, which leads to broken knowledge chains. Instead, networks of excellence could be funded on a longer-term basis, with their success evaluated every seven years. This could ensure a continuation of knowledge generation and transfer. To better exploit this potential, interlinked coaching formats (such as transformation pilots) could be expanded or newly developed in which the better development of foreign markets and the identification of new business fields and models could be addressed.
- Improve location factors. Improving the general location factors can also benefit the automotive companies based there by supporting their transformation.
At the same time, efficient location factors are an essential prerequisite when it comes to attracting new companies to settle in Germany. Important factors in this respect include the availability of suitable land, the supply of skilled workers, universities, an efficient digital infrastructure, adequate transport links, and connections to innovation networks. These location factors are comparatively unfavorable, especially in rural regions. The current revival of greenfield investments would also actively support targeted settlement strategies by improving the location conditions.
The Prerequisites for a Successful Transformation are in Place
Overall, the initial conditions are good for a successful transformation of the automotive industry in Germany. Although around 260,000 people are still employed in the area of internal combustion engine powertrains, around 125,000 people are already working in the three opportunity areas.
The momentum of the transformation is very high, and companies are investing heavily, especially in the training of their employees. This is yielding results, as illustrated by the study's evaluations of opportunity areas and new investments. German OEMs and major automotive suppliers in particular are playing an active role in shaping the transformation and are investing large sums in the automotive transformation. Positive effects in new registrations of electric vehicles are the result. German OEMs such as Volkswagen and Daimler already rank high in the German registration statistics for electric vehicles. In Norway, where more electric vehicles are already sold than combustion engines, Audi and Volkswagen led the registration statistics in 2020.
Nevertheless, there are further challenges for companies and regions with regard to the declining importance of conventional drives, especially from three perspectives. SMEs, companies in the conventional drive sector, and companies in rural areas generally have to deal with lower levels of freedom and greater pressure to adapt. However, with the help of targeted measures – ideas are discussed in this study – it seems possible to successfully shape automotive change here as well.
Effects on Foundries
As a result of their path dependencies and specializations, some of which have lasted for decades, companies have built up considerable expertise that is in danger of being devalued by the automotive transformation in the field of combustion technology. This experiential knowledge (often technologically adept) can be secured, utilized, and further developed through targeted further training. This specifically involves skills such as casting complex structures – of components for internal combustion engines, for example. Foundries can transform this knowledge by interweaving new skills with their deep process knowledge with a view to casting parts and components for e-motors or other parts and components that are experiencing increasing importance as a result of the automotive transition.
The complete study by Antonio Ardillo, Hanno Kempermann, Johannes Ewald, Manuel Fritsch, Oliver Koppel, Benedikt Müller, Thomas Potinecke and Benita Zink, 2021, Economic significance of regional automotive networks in Germany, study for the Federal Ministry for Economic Affairs and Energy (BMWi), Cologne can be downloaded in German below.
