Innovation drives economy
Country leads the globe in several technologies, and is working to add electric cars to that list. Reports by Ed Peters
Germany is renowned as the birthplace of numerous inventors and engineers whose work has altered the course of history. Hans Geiger created the Geiger counter, Konrad Zuse built the first electronic computer, and a host of other visionaries laid the foundations for automotive and air transport technology.
German business is practically synonymous with innovation, which has been the driving force behind the country's successful economy. Germany spends around 2.6 per cent of its gross domestic product - around US$49 billion - on research and development, and spending is likely to increase to 3 per cent this year.
Germany continues to be one of the leading nations in several technologies, including biotechnology, nanotechnology and computer science, and hi-tech fields such as biometry, aerospace, electrical engineering and logistics.
An example of German thoroughness and dedication was seen in the wake of the 2008 financial crisis, when SMS, the German engineering group, embarked on a revolutionary strategy. Rather than lay off staff or cut development and capital expenditure, SMS increased spending on training, research and machinery. Although the company received no sizable orders for months on end, SMS doubled its annual investment budget to Euro70 million (HK$598.5 million).
"After the party, it is time for spring cleaning," says SMS chairman Heinrich Weiss, adding that the most important thing during times of crisis was to look after the workforce. As a result, SMS prospered, as did other German engineering companies who saw the volume of goods sold abroad rise by 18 per cent in the following year.
In short, a mixture of financial caution, an enterprising spirit and a strategy to retain a highly skilled workforce has been at the heart of the country's success.
German engineers are now focusing on electric cars, which are considered the next phase in the automotive industry. Forecasts say by the end of the next decade, more than 15 per cent of new vehicles worldwide will be electric.
"As a new technology field, the electric mobility market is being hotly contested internationally - at present, the markets for e-vehicles in other countries are developing more dynamically," says Matthias Wissmann, president of Verband der Automobilindustrie, the country's automotive association. "The car of the future will be electrically powered, networked and automated. Germany is well-placed in all these fields."
Wissmann adds that the goal must be to maintain and consolidate this position amid increasingly intense competition between countries. "The industry will continue to do all it can to help the e-vehicles succeed, as the best times are yet to come for electric mobility. The range will increase, and the prices will drop. By 2025, we expect that costs will be halved by comparison with today's battery models."
According to reports, the present range of an electric car is sufficient for about 90 per cent of planned trips. "This is because the average daily distance driven in Germany is only 22km," Wissmann says. "And people who drive longer distances can choose a rechargeable hybrid vehicle."
One of Germany's best-known carmakers, Mercedes-Benz, is at the forefront of developing new technologies. "We are on the way to autonomous driving," says Samson Leung, public relations and communications manager for Mercedes-Benz Hong Kong.
"The current S-Class offers driver assistance features that help drivers by automatically intervening in a variety of critical situations and by supporting long-distance drives with automated distance and lane keeping. In slow and regular stop-and-go traffic, the driver can just let go of the steering wheel and let the car drive."
Mercedes calls this feature "Intelligent Drive". "We will extend the functionality of this package in the years to come," Leung adds.
The mainland represents one of the German automobile industry's biggest potential growth markets. Last year, it sold 3.9 million new cars there, an increase of 16 per cent. While individual corporations mount their own marketing campaigns, they are greatly assisted by the German Chambers of Commerce Worldwide Network (AHK), which maintains offices in primary mainland cities like Beijing and Shanghai as well as in Chengdu, Tianjin and Hangzhou.