German Trade Secrets

Germany's Competitive Advantages Make Deutschland Number One

Mar 26, 2008

This European powerhouse is a winner in global trade propelled by best-in-breed export sales, top luxury automotive brands, and world-class mechanical engineering.

The integration of East and West Germany has not impeded Germany's progress as a world leader in international trade nor has it led to labour conflicts.

In fact, Germany's healthy trade balance continues to grow while labour harmony seems to be improving as Eastern Germans enjoy higher incomes and more business opportunities.

Germany's leadership can be attributed to four key competitive advantages of Deutschland's economy.

World's Leading Exporter

With a population of some 84 million, Germany exports more goods by value than any other country. German exports in 2007 amounted to US$1.36 trillion which was 11.4% more than China and almost 20% more than the United States.

In 2007, Germany's trade surplus was $240 billion. This compares with China's estimated trade surplus of $300 billion and America's $850 billion deficit. These estimates are according to the CIA World Factbook.

Germany overtook the U.S. to become the world's leading export country from about 1992, around the time that Germany joined the European Union as a founding member.

Germany's Top Automotive Global Brands

According to the 2007 Interbrand BusinessWeek report, Germany places five luxury automotive brands among the world's top global brands for all sectors. This is more than any other country.

The strategic importance of German automotive brands is that they produce high-end luxury vehicles and specially made race cars. With Germany's reputation for quality precision engineering, Deutschland enjoys a competitive advantage in selling high dollar vehicles in foreign countrires.

The Mercedes-Benz SLR McLaren is a two-door roadster that sells for US$500,000, with a waiting list at many American car dealerships. So it's not hard to see how German luxury automotive products spearhead the high value and growth of Germany's exports.

German Niche Products and Services

In the global market place, Germany is also a leading supplier of computer products and services, sporting goods, financial services and personal care items. Below is a list of German brands among the world's top 100 global brands.

World's Best in Mechanical Engineering

Engineering professionals around the globe agree that Germany is the world's leader in mechanical engineering systems analysis and design.

One major competitive advantage of this precision engineering expertise is that Deutschland makes the tools that make the tools. For example, Germany owns a 58% market share for producing reciprocating pumps used for drilling and water purification systems and produces 34% of packaging and bottling equipment used around the world. Germany is also a leading maker of strategically important environmental technologies including solar energy and wind power machine components,

Another vital competitive advantage from making tools that make the tools is that, by definition, German mechanical engineers are in a strong position to maintain their technological leadership. After all, German mechanical engineers design the most advanced products that other countries use.

The copyright of the article German Trade Secrets in International Trade Leaders is owned by Daniel Workman. Permission to republish German Trade Secrets in print or online must be granted by the author in writing.