This is a best prospect industry sector for this country. Includes a market overview and trade data.
Last Published: 8/29/2019

Overview

Advanced Manufacturing (AM) is the convergence of information and communications technologies with manufacturing processes to drive real-time control of energy, productivity and costs across factories and companies. It was identified as one of the highest-priority manufacturing technology areas in need of federal German investment.
The OPC Foundation (Object Linking and Embedding for Process Control) 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 will prepare the machine vision and robotics industry for Industry 4.0 and for the factory of the future, and will help SMEs to implement robotics and machine vision software language with their products.
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), BitCOM (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 100 billion or more per year into smart manufacturing technologies, but only 20 percent are already spending money on investments.
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. The main industries are automotive, electrical and electronics, metal working, chemical rubber and plastics 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 sales of EUR 14 billion in 2017. Sales are expected to grow by 9 percent in 2018 to EUR 15.4 billion. Future topics are the utilization of artificial intelligence, human-robot collaboration, digital transformation in production, and service robotics in the commercial industry.
Additive Manufacturing and Advanced Materials:
Germany is home to Europe’s largest advanced materials market. The strong growth of its 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 space record for their show in November 2018. Traditional materials such as chemicals and plastics are expected to reach more moderate but still good growth rates of 3-4 percent in 2018. In 2017, this market segment achieved annual sales of EUR 61 billion. In 2019, the triennial ‘K’ Show will take place in Dusseldorf, October 16-23. The German chemicals industry is expected to grow an estimated 5.9 percent in 2018, or to approximately EUR 204 billion.
German Machine Tool and Precision Tool Market
The ongoing boom in almost all user industries worldwide had already driven production output to more than EUR 16 billion in 2017. Imports from the USA have been about EUR 120 million for machines and equipment. The capacity utilization was running at about 93 percent, according the German machine tool association. The German market consumption is about EUR 8 billion. The figures for German precision tools industry - whose most important partner is the USA with more than EUR 500 million imports - are similar with a generated increase of 7 percent in 2017 up to EUR 10 billion, and expected production of EUR 11.1 billion in 2018.
Sensors and Instruments:
Sensors and instruments are another growth subsector. In 2015, sales were EUR 125 million, making it the fourth largest purchaser of U.S.-made products in the category. Between 2009 and 2015, sales of these products grew by 8.6 percent annually (CAGR). Major competitors include SICK AG, Siemens Sensor Systems, Bosch Sensortec and Beckhoff Automation. The German industry expects further growth opportunity in 2019, 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 many 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.

Web Resources

Trade Events German Organizations: U.S. Associations:

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