Industry

Hannover Messe and German Engineering Sector Push for Industry 4.0

Last year, the Hannover Messe was cancelled for the first time in its more than 70-year history due to the Coronavirus pandemic. This year’s event took place completely online.

Digital Hannover Messe in 2021

The world's largest industry trade show, the Hannover Messe, only took place online in April due to the Covid-19 crisis. The digital Hannover Messe in April focused on conference events, with new products presented digitally. Virtual visitors were able to quickly gain an overview of innovations and make direct contact with the companies relevant to them.

Germany Trade & Invest took part as in previous years and was participating in the digital exhibition with a virtual booth.

Digital trade formats gaining popularity during crisis

German industry wants to exhibit less at trade shows in the future. This is shown by a survey conducted by the Munich-based ifo Institute. According to the study, 39 percent of the companies surveyed that have already been active at trade shows plan to reduce the number of their participations in the future. For larger companies with more than 1,000 employees, the corresponding figure is as high as 47 percent. "Trade fairs will remain important for companies, but they will have to change," concludes Ifo trade fair expert Horst Penzkofer. This is because digital formats have become more popular as a result of the coronavirus crisis.

Trade fair operators look to hybrid offerings

Hybrid offerings are also planned for the future at all major locations. Hanover-based Deutsche Messe AG has set up its own streaming arena for this purpose. H'Up is the name of the company's subsidiary event venue, for which five backdrops with stages are permanently installed in the 3,250 square meters of Hall 18, on which, for example, panel discussions, interviews and product presentations can then take place."H'Up is an important new tool for business initiations," says trade fair boss Jochen Köckler, speaking of an "ideal combination of online, hybrid and live." From Hanover to the world has never been easier, more so since the Lower Saxons have also additionally set up the so-called Media Factory on the Hanover exhibition grounds. Deutsche Messe has taken over the former NDR broadcasting center with 15 film and sound studios, which can be used for online and hybrid events as well as video and audio recording.

Industry push towards automation and digitalization

These developments coincide with a push towards digital processes and automation in Hannover Messe’s target audience of engineering and industrial companies. The majority of companies in Germany see considerable efficiency deficits in their own corporate organization. One in two companies is relying on more automation and better product quality to close these gaps. These are the findings of the Potenzialanalyse Operative Effizienz study conducted by technology consultancy Sopra Steria and the F.A.Z. Institute, which surveyed 323 decision-makers as well as managers and specialists from various Industries. According to the study, securing competitiveness through greater efficiency is an ongoing issue for companies.

Global pandemic increasing pressure on industry

The global coronavirus pandemic is increasing the pressure, with the economic impact and repercussions of the pandemic enormous. In this situation, efficiency gains in the form of savings and optimization along the value chain are becoming more important than ever for companies seeking to overcome the worst effects of the crisis. One in two decision-makers surveyed expects an automation boom – partly because the potential of new technologies is currently not being exploited. Six out of ten companies are pushing ahead with digitalization projects with the greatest “quick win” prospects as well as the automation of processes. Seventy-one percent of companies want to replace inefficient processes with new ones. One in two companies is methodically searching for clues in order to eliminate efficiency brakes.

Business in Digital Sector at Two-Year High

Business confidence in the digital sector reached a two-year high in March, with IT and telecoms providers benefiting from accelerated digital rollout in public and private sectors.

Confidence returns to IT and telecoms industries

Confidence in the IT and telecoms industries has returned to pre-coronavirus levels, with the digital sector recording a two-year high according to digital association Bitkom. The business climate is currently showing strong improvement, recording a two-year high in March of this year. The results of the Biktom-ifo Digital Index – calculated from industry actor assessment of the current business situation and future business expectations – rose by 7.8 points to 26.5 points in March, the highest level since May 2019.

Digital market demand positive despite coronavirus crisis

Confidence within the domestic digital sector is high, despite the country standing on the verge of a potential third Covid-19 wave, with the national seven-day infection incidence rate hovering at or significantly above the 100 level. Bitkom president Achim Berg sees renewed optimism in the digital industry, with business enjoying the acceleration of digitalization measures within companies, public administrations and private consumers in response to the pandemic. Assessments of the business climate have improved across the board over the past year, with demand for digital products and services stable despite coronavirus-related restrictions across the country.

Companies to expand workforce as economic mood brightens

The healthy economic outlook is also reflected by the fact that the majority of companies surveyed intend to increase their workforce size in the next quarter, with Bitkom-ifo Digital Index employment expectation levels up 4.5 points to 23.3 points. The positive mood in the economy as a whole has improved according to the ifo institute, with both business climate and business situation rankings improving significantly.

EdTech Solutions in Great Demand in German Higher Education System

There is a lot potential for EdTech solutions in Germany. With more than 90 percent of higher education courses online, 60 percent of students and faculty members are satisfied with the digital switch.

From crisis mode to digital teaching for the future

Germany’s universities acted quickly to respond to the challenges of the coronavirus pandemic, making more than 90 percent of course available online in just 30 days according to Stifterverband, a joint initiative of companies and foundations active in education, science and education.

The discussion paper highlights the potential available to EdTech providers to lay the foundation for digital innovation in schools and universities. The Covid-19 pandemic has accelerated the digital transformation in educational establishments as well as opened up a debate as to the necessary technical innovations and tools required for the future.

According to Stifterverband, higher education institutions are also important co-creators of ideas and innovations in this process.

Berlin signs up for digital learning management system

EdTech providers are making inroads into the German market, with Norwegian provider itslearning recently reaching an agreement with Berlin to provide its learning platform for 400,000 students.

The company is the leading learning-management system provider in Norway, and is already being deployed in other German cities and states including Baden-Württemberg, Bremen, Düsseldorf, and Schleswig-Holstein.

Significant market potential

Notwithstanding the significant market opportunities in the private sector, Germany spends heavily in the public education sector – about EUR 147 billion (equivalent to 4.2 percent of GDP). Since 2010, the sector has enjoyed annual growth of around 3.6 percent, outpacing overall economic growth of 3.4 percent.

Digital learning will be a priority in the years ahead, as the country draws from the lessons learnt during the coronavirus pandemic. As part of its ”Digital Pact for Schools,“ the country’s federal government will spend a total of EUR 5 billion over the next five years to develop digital infrastructure in schools.

German Games Market Was a Big Winner in 2020

Sales revenue in the gaming industry rocketed up 32 percent last year. German industry organization game registered more than EUR 8.5 billion in sales in 2020 compared with just under EUR 6.5 billion in 2019.

One obvious reason was people across the world being forced to spend more time at home amidst the coronavirus pandemic.

“It wasn’t always possible to meet the strong demand for games consoles or gaming graphic cards, due to limited availability,” said game Managing Director Felix Falk in a statement. “Many German households upgraded their technical equipment at home during the course of the Covid-19 pandemic, so they are now ready for the top games of the coming years.”

There was growth across the board, so to speak, including subscriptions, charges for online services, purchases, in-game purchases and hardware.

Automotive News

Germany has become the world's second-biggest electric car market, with German OEMs already taking steps to secure their position in the future digital mobility market.

Germany overtakes USA to become world number two electric car market

Germany has overtaken the USA to become the world’s second-largest market for electric vehicles. Generous subsidies for electric cars and plug-in hybrid vehicles have led to a boom in Germany and Europe. New vehicle purchase premiums of up to EUR 9,000 have kick-started demand, allowing Germany to overtake the US as the world’s second-largest market for electric vehicles according to the Center for Solar Energy and Hydrogen Research Baden-Württemberg (ZSW).

China remains the largest market for electric and plug-in hybrid vehicles with 1.25 million new registrations in 2020, although demand is falling with the market growing by just three percent in the same period. However, global demand has increased by 38 percent, fueled by demand from Europe, led by Germany with a 264 percent increase (395,000 vehicles). The demand has given a fillip to domestic vehicle manufacturers, with VW recording 422,000 new electric car and plug-in registrations in 2020. The Wolfsburg-based car giant overtook Tesla for the first time in Q4/20, selling 192,00 electric cars (compared to Tesla’s 181,000 over the same period).

German auto manufacturers doubled their global production of electric and plug-in vehicles last year, producing more than a quarter of all electric passenger vehicles made worldwide.

German brands dominate the global auto industry

German auto brands continue to dominate the world’s most valuable auto brands despite the harsh effects of the coronavirus crisis on the auto industry. According to the Brand Finance Global 500 2021 ranking, the country’s auto industry dominates globally with a cumulative brand value of USD 201.8 billion.

Mercedes retains its position as Germany’s most valuable brand across all industry sectors, with VW, BMW, Porsche, and Audi all occupying spots in the global top 10 most valuable auto brands. German companies in the top 10 have a combined brand value of USD 197.2 billion – equivalent to 54.7 percent of the top 10 most valuable auto brands.

VW sees future in digital software services delivery

Having successfully made the move to electric vehicles, VW has announced ambitious plans to revolutionize its business model. According to Handelsblatt, the Wolfsburg-based concern is currently working on a “Business Model 2.0” strategy that will see its primary focus placed on software and services provision. The digital transformation presaged by VW is premised upon the future value of electric and autonomous vehicles being measured in terms of digital services. To that end, VW is examining the possibility of partnerships with start-ups like Isar Aerospace in order to develop solutions for car connectivity to the satellite internet.

Handelsblatt reports that, although the further course of action will be determined in the coming years, the project is already in progress within VW development departments. In March, VW presented its technology roadmap for battery and charging up to 2030, with ambitious plans for a number of charging cooperations, a new unit battery cell and six battery-cell factories across Europe.

Audi plans to build own fast-charging infrastructure

German carmaker Audi intends to build its own charging infrastructure of between 200 and 400 stations for electric vehicles. Speaking to Handelsblatt, Audi CEO Markus Duesmann argued the necessity for the plan, citing the fact that at least 30 percent of Audi cars sold in Europe will be electric in the next four years. “We don’t want sales of our vehicles to fall due to a lack of charging stations.”

The VW subsidiary has however come in for criticism from the German Federal Association for E-Mobility, which believes that Audi’s draft plan fails to conform to existing specialized laws and regulatory fundamentals as well the associated infrastructure for electric mobility. Germany’s transport ministry is investing almost two billion euros in extending the charging infrastructure along the national motorway network.

EU gives green light to Daimler Trucks and Volvo venture

Daimler Trucks and Volvo are set to join forces for the joint development of fuel-cell systems following EU competition regulator approval. The decision leaves the way open for the two companies to establish the new company focused on the research and development, production and sales of heavy truck fuel-cell systems. The venture will see Volvo acquire 50 percent of the company for around EUR 600 million, with the transaction set to be finalized in the first half of the year.

Food & Beverages News

Germany's food and beverage sector has been an unlikely winner in the Covid-19 crisis, with organic and fair trade produce proving popular as the population takes convenience and delivery services to their hearts.

Organic and fair trade dominate consumer food trends

Organic and fair trade are currently the most important trends in the German food trade according to the latest "Consumer Insights and Food Trends 2021" report from market research provider Quantilope. Organic foodstuffs, regional cultivation and fair trade are the issues uppermost in the minds of German food consumers, recording the greatest market growth potential in 2021 alongside issues of sustainability and sustainable production. Food brand commitment to sustainability is “important” or “very important” for more than half of all consumers, with use of the “fair trade” product seal and the Demeter association seal being particularly associated with high sustainability.

Record year for organic food sales

Germany’s organic food market enjoyed record turnover of almost EUR 15 billion in 2020 – equivalent to a 20 percent increase in revenue. According to the Federation of the Organic Food Industry (BÖLW), the sector grew twice as fast as the food market as a whole. The BÖLW reports that the industry was able to cope with increased demand thanks to many farms converting to organic production in recent in years, with more than 35,000 farms managing almost 1.7 million hectares of land in 2020.

Organically farmed land now accounts for in the region of 10 percent of all agricultural land in the country. Direct and online marketing products and services including “organic baskets” flourished, with consumers preferring to avoid large supermarkets to avoid potential risk of Covid-19 infection. A growing section of the public also prefers to buy direct from the producer, followed by specialist organic retailers and weekly markets.

Meat alternatives thrive as meat consumption drops to decade low

Per capita meat consumption in Germany fell to a decade low in 2020, with 57.3 kg consumption lower than at any time since 1989 according to the Federal Agricultural Information Center (BZL). Consumption of vegetarian spreads, tofu and soya patties is booming, with Germany leading in the field for meat alternatives in Europe. In 2019, the market enjoyed a record year with annual turnover of EUR 273 million – equivalent to an annual growth of 76 percent.

Online grocery sales almost double in year

The online grocery sector has emerged as one of the biggest winners of the coronavirus crisis, with German consumers buying almost twice as much pasta, meat, fruit and vegetables online as they did in the previous year according to e-commerce association bevh. The Covid-19 crisis has brought an end to traditional consumer reluctance to buy groceries online, with several retailers unable to meet the surge in demand. Supermarket giant REWE is the acknowledged market leader, with Germany’s largest grocery retailer Edeka extending its own delivery portfolio beyond its Berlin and Munich-only Bringmeister service with a stake in online supermarket delivery provider Picnic.

Online delivery service Gorillas – which promises to deliver orders to the doorstep in 10 minutes – recently became the first German start-up to achieve unicorn status within a year. The Berlin start-up has also secured EUR 244 million in funding, with ambitious plans to expand in Europe and enter the US market in New York. Russian provider GetFaster, which similarly promises to deliver within 10 minutes, started operations in North Rhine-Westphalia at the end of 2020. Bremen-based omnichannel provider My Enso allows consumers to configure their own “virtual supermarket,” determining assortment, ordering and delivery processes.

According to a forecast made by the Cologne Center for Research in Retailing, the online grocery sales market will account for around 3.6 percent of total grocery sales 2025.

Food delivery services thrive in coronavirus crisis

Food delivery service providers have benefited from the coronavirus crisis. In Q4/2020, Germany’s biggest provider Lieferando saw platform orders increase to 56 million – equivalent to a year-on-year increase of 56 percent. A number of new food-order platform providers – including App Smart, Simply Delivery and Discoeat – that leave delivery entirely to the restauranteurs have also sprung up to provide an alternative to full-service providers like Lieferando and Wolt.

Supermarket chain Tegut moves into convenience food sector

Swiss-owned supermarket chain Tegut recently opened its first “Tegut Quartier” convenience store in Fulda as part of a new food-to-go concept. The 340 sqm store provides customers on their way to or enjoying a break from work with an array of ready-to-eat dishes and snacks that can be directly eaten on the premises or taken away. Cooking facilities are also available for meals requiring minimal preparation. As well as free Wi-Fi provision, the prototype store also provides USB sockets to cater to customer’s digital needs.

De Niro's Nobu Chain to open first German hotel in Hamburg

Nobu Hospitality is set to open its first hotel and restaurant in Germany at the Elbtower in Hamburg. The Nobu Hotel Elbtower Hamburg, situated in the David Chipperfield-designed Elbtower, will boast 191 rooms and suites as well as a 200-seat Nobu restaurant, terrace bar and lounge overlooking the River Elbe.The hospitality brand, founded by actor Robert De Niro alongside Nobu Matsuhisa and Meir Teiper, will see the hotel open in 2025 on completion.