Automobile Industry in Germany

The automotive industry in Germany is one of the largest employers in the country, with a strong labour force of over 866,000 (2005) working in the industry. In addition, Germany has the largest share of passenger car production in Europe with
over 29% market share (source: , 2002), followed by France (18%), Spain (13%) and the United Kingdom (9%).

History
Germany is considered the birthplace of the automobile since Karl Benz and Nikolaus Otto independently developed four-stroke internal combustion engines in the late 1870s, with Benz fitting his design to a couch in 1887, which led to the modern day motor car. By 1901, Germany was producing about 900 cars a year.

American economist Robert A. Brady extensively documented the rationalization movement that shaped German industry in the 1920s, and although his general model of the movement applied to the automotive industry, the sector was in poor health in the later years of the Weimar Republic. Germany's slow development of the industry left the market open for major American auto manufacturers such as General Motors who took over German company Opel in 1929, and the Ford Motor Company which maintained a successful German subsidiary.

The collapse of the global economy during the Great Depression in the early 1930s plunged Germany's auto industry into a severe crisis. While eighty-six auto companies had existed in Germany during the 1920s, barely twelve survived the depression, including Daimler-Benz, Opel and Ford's factory in Cologne. In addition, four of the country's major car manufacturers — Horch, Dampf Kraft Wagen, Wanderer and Audi — formed a joint venture known as the Auto Union, which was to play a leading role in Germany's comeback from the depression.

The turnabout for the German motor industry came about in the 1930s with the election of the Nazi Party to power. The Nazis instituted a policy known as Motorisierung, a transport policy which Adolf Hitler himself considered a key element of attempts to legitimise the Nazi government by raising the people's standard of living. In addition to development and extensions of major highway schemes, the Volkswagen project was aslo conceived to design an construct a robust but inexpensive "people's car".

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