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Fabian Kotek is Analyst at Saxenhammer.

Before joining Saxenhammer in 2020, he gained experience in management consulting at Accenture and in asset management at an Austrian bank.

Fabian holds a MSc in Finance and Accounting from Imperial College and a Magister from Leopold-Franzens University Innsbruck.

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The automotive industry is at the heart of the German economy. No other industrial sector is as important for prosperity and employment in this country. The deep-rooted and fragmented value chain connects a multitude of other industries to the automotive economy. 

Future Trends

The competitive landscape in the automotive industry will change fundamentally in the future. As the importance of software components increases, more and more technology companies are entering the market. 

While data exchange and automated driving will become essential components for the mobility of the future, equally efficient and high-quality production of vehicles and components will remain highly relevant.



-22.8%

2020

+4.9%

2021

+11.5%

2022

The automotive industry is going through one of the most trendsetting and exciting phases in its history. Technological advances, especially regarding alternative drive systems, enable the conceptualisation of new business models such as ridesharing. The fast-growing sharing economy and easy access to capital are noticeably reducing entry barriers. 

Current Developments

 The automotive industry is in the midst of secular change 

The automotive industry is facing a secular change. Production and manufacturing processes of manufacturers and suppliers are continuously automated, which results in a profound change in current value chains. In the future, the focus will no longer be on the car but on mobility itself.

While the market holds great potential, at the same time numerous industry participants are in a tense situation. The consolidation pressure within the industry is increasing, especially in the mid-cap market. 



Our View

Automotive

Saxenhammer has in-depth technical and industry knowledge and can draw on a broad network of industry experts with many years of transaction experience. 

People & Voices

The consolidation of the automotive industry in Germany is progressing. With the recovery from the Corona pandemic, a trend towards size and thus a wave of takeovers is dawning.  

Consolidation

The services sector in Germany accounts for three-quarters of all employed persons and generates around two-thirds of GDP, making it the largest and fastest growing economic sector in Germany. The market grew strongly in the last decade, often with double-digit growth rates. Optimal infrastructure, high productivity rates and highly qualified personnel make Germany an extremely attractive location for the provision of services.  

The Internet of Things and Industry 4.0 will revolutionise production. Digital and physical services can be effectively combined to meet the specific needs of individual customers.
New, intelligent service architectures and service platforms will create innovative business models that will permanently change existing value chains. The growth prospects of the sector are extremely attractive. 



+1.9%

+8.4%

+8.2%

Already about 80% of all companies in Germany are service providers and with increasing technological progress new fields of activity are opening up. The moderate development of personnel costs and the constant level of employment further increase the attractiveness of Germany as a location.

Focus on Service 4.0 

Business-related services show tremendous growth potential, especially in the German SME sector. The biggest growth driver is the progressing digitalisation.
Traditional services are also becoming even more integrated into the digital value chain as not only the industrial but also the service sector will change fundamentally and sustainably due to the possibilities of continuously advancing technology.


Business Services

Smart services combine physical and digital services to create new, intelligent products and digitally enhanced business models. They are becoming increasingly important in the course of Industry 4.0.  

Smart Service Solutions

The chemical industry is one of the most important sectors in Germany as an industrial location. As the third largest industrial sector with around 460 k employees and over 500 k indirect jobs, it has a decisive influence on national prosperity. 

Future trends 

While no radical technological breakthroughs are foreseeable that will challenge production as a whole, companies could define themselves as part of an intelligent ecosystem in the future. 
Thus, the collaboration of players from different industries on one platform becomes conceivable. Size, economies of scale and productivity and cost optimisation will also continue to be decisive success factors.



-3.9%

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The chemical industry is experiencing a global shift in demand structures and value chains. The life cycles of chemical products are becoming shorter and shorter, while demand for energy & resource efficient products is growing.

Structural change in the chemical industry

The competitive environment of the chemical industry is on the brink of change - producers in emerging and resource-rich countries are expanding their capacities and broadening their focus to areas of speciality chemicals that have so far been covered by German exports.

Social objectives and changing demand structures are also having a noticeable impact on consumer behaviour. A wave of consolidation is to be expected, especially in the medium-sized sector.  



Chemicals & Polymers

Saxenhammer has in-depth professional and industry knowledge and can draw on a broad network of industry experts with many years of transaction experience.

Linear supply chains are evolving into multi-layered economic networks as the recycling of materials and molecules becomes increasingly important. 

Circular economy

With over 83 m inhabitants, Germany is the largest consumer market in Europe. In addition, the German population has above-average purchasing power, which fuels the growth of the industry. The sector is also considered particularly crisis-proof, as demand for consumer goods is largely independent of the economic cycle.

The individualisation of products and the entire customer journey is increasingly taking centre stage. It will become even more important to gain precise knowledge about one's customers to bring tailored products to market in combination with the best possible customer experience.
Low barriers to market entry and low cost of capital will continue to be drivers of the high-cost pressure in the future. Consequently, companies need to continuously review their entire value chain to operate as efficiently as possible.   

 


+4.6%

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The image of the typical consumer is changing. In the course of digitalisation, the customer increasingly demands a seamless cross-channel offer. In addition, customers often inform themselves in detail online about the subsequent purchase process. As a result, the importance of the customer experience and customer journey is increasing strongly.

Adapted consumer behaviour drives innovation

First, retail and consumer goods companies are increasingly focusing on their core businesses and strengthening their portfolios by divesting non-related businesses while acquiring suitable add-ons. As a result, M&A activity is expected to increase. 
Secondly, the focus is on the targeted improvement of the customer journey. Stationary retail companies are increasingly investing in e-commerce companies to build up digital know-how and a digital presence.


Consumer & Retail

Saxenhammer has in-depth technical and industry knowledge and can draw on a broad network of industry experts who have gained many years of transaction experience. 

The increasing share of online shoppers is permanently changing the touchpoints of the customer journey. Marketing measures and influences on the part of companies must be adapted.  

Customer Journey

The packaging industry in Germany is concerned with the production of packaging both for the logistics sector and for products for the end consumer. A distinction can be made between the sub-segments paper, plastics, metal, glass and wood. The packaging industry occupies an intermediary position between producers and consumers so it must react very flexibly to changes in customer wishes.

The digital printing sector will continue to gain momentum in the coming years. Important drivers of this trend are the increasing variety of goods with simultaneously shorter product cycles and a trend towards individualisation and serialisation of packaging.

Another trend is in the area of product and food safety. Save Food has become a central topic in the industry and will continue to occupy it for some time to come. Around 40 % of food still spoils in the field and is on its way to the customer.


-3.0%

+12.7%

Sustainability has emerged as one of the key trends in the packaging industry in recent years. For consumers, the environmental compatibility and multi-purpose suitability of packaging are increasingly important purchasing factors. Purchasing decisions are therefore increasingly made based on a value-oriented understanding. The new consumer generation of LOHAS (Lifestyle of Health and Sustainability) is representative of this.

Digitalisation and sustainability at the centre of further development

The packaging industry market is very fragmented, especially in the DACH region. SMEs run the risk of not being able to keep up with the increasing challenges of digitalisation and sustainability in the long term.  

Smart and green packaging in particular continue to gain in importance - digital packaging and bioplastics stand out as growth drivers. Material properties and functionality of packaging will thus play an increasingly important role in the industry. 


Containers & Packaging

Processes that aim to improve and enhance the properties and functionalities of packaging units. Annual growth rates in this area are 15%-20%.   

Smart Packaging

Germany is one of Europe's largest education and training markets. Annual expenditure in Germany amounts to approximately EUR 220 bn. The extended sector in particular, which is dominated by private-sector players, is becoming increasingly important. Here, there is more freedom to make decisions than in the incumbent areas such as K-12 education. This means that new business models such as e-learning have the potential to revolutionize the way people pursue their education. 

Transnational education (TNB) is a global trend that is becoming increasingly important in the higher education market. More and more educational institutions are running their academic programmes in cooperation with branches or franchising arrangements in different countries. 

Next to TNB, Educational Technology (EdTech) offers some of the greatest growth potential in the education market. International EdTech spending has more than doubled from approximately EUR 135 bn in 2019 to approximately EUR 305 bn in 2020, but to date, it accounts for only 2.6% of global education spending.


+2.9%

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The education market is a global growth market. Population growth, demographic change and, not least, the COVID-19 pandemic are driving the increasing demand for digital education and learning solutions. The proportion of young adults with tertiary education has increased from 35% to 44% in OECD member countries between 2008 and 2018, reflecting the increased global demand for a skilled workforce.

E-learning as a growth driver

The education and training market is a growth market with great potential, especially in the digital environment. The Covid 19 pandemic strongly reinforced the demand for digital learning and education opportunities. 

Cloud technologies and artificial intelligence will also influence the education market. Global technology companies are increasingly entering the market, triggering a wave of consolidation.  



Education Services

The demand for private education and training is continuously increasing. The market holds great potential, especially in the area of e-learning.  

Private education providers

Germany has been a global pioneer in the application of renewable energies and environmental technologies for decades. The energy transition remains an integral part of the German energy landscape with ambitious targets to reduce CO2 emissions by 80 % by 2050 and to increase the share of renewables in total energy consumption to 60 %. The energy and water supply sector in Germany employed almost 260 k people at the end of 2020.

Energy procurement of the future is green, digital, and cross-sectoral. Lush stimulus packages to follow the Corona pandemic are spurring utility development and accelerating the path to efficient energy.
Innovative technologies such as blockchain support the trend. In Vienna, a start-up is currently enabling the demand-based exchange of electricity between neighbours. In the future, such a model will be fully automated.  


+1.5%

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Deregulation and liberalisation of the market are followed by digital transformation in the energy sector, an integral part of the energy transition. The energy industry is intensively engaged in managing large data streams from feed-in, smart metering and grid operation.

Increased energy efficiency as the industry's top priority

The traditional business model of the energy industry – producing, transporting, and selling electricity – is reaching its limits. Technological, economic, and political megatrends are creating new business opportunities for both incumbents and new players in the energy market. 

The task now is to identify the right fields and develop them strategically. In this way, new potentials can be exploited that will lead the energy transition to success.



Energy & Environment

Digital smart systems that continuously monitor power flows in the building, production in rooftop PV systems and charging of e-cars in the garage to create self-sufficiency.

Energy self-sufficiency

The food and luxury food industry is one of the most important industrial sectors in Germany. As Europe's largest food producer and third-largest food exporter on the world market, Germany contributes significantly to the overall development of the industry. Approximately 618,000 people are employed in about 6,000 companies, most of which are medium-sized. 

As a result of increased health awareness among the population, the market for alternative meat and dairy products will continue to grow strongly. Companies are already starting to plan cell-based production of meat, fish and dairy products in the laboratory.

At the same time, the trend towards sustainability and regionality will continue to gain importance. Meat consumption in Germany in 2020 reached a historic low. The consumption behaviour of the population is changing continuously.  


-11.6%

+3.1%

Recent consumer trends are mainly influenced by a number of profound societal changes. For example, an ageing population is driving demand for health and wellness, as well as for functional foods to prevent or combat diseases such as diabetes, high blood pressure and cholesterol.

Plant-based alternative products are in vogue

The food and beverage industry is significantly influenced by changes in consumer behaviour of the population. The megatrend towards more sustainability has a direct impact on companies in the industry. Plant-based alternatives to meat products are becoming increasingly important.
As a result, the fragmented German market, consisting of over 6,000 mainly medium-sized companies, is facing increasing consolidation pressure. 


Food & Beverage

Companies plan to transition from traditional livestock farming to a more sustainable model based on the production of animal products from cell cultures.

Alternative meat, fish, and dairy products

The healthcare industry is one of the largest sectors of the German economy. It is a growth driver due to its innovative strength and employment intensity. It can be divided into three major sub-sectors: Life sciences, healthcare services and Medtech. About 5.8 m people are employed in the health care sector - this corresponds to almost 17% of all employed persons in Germany.

Advances in medical technology are creating innovative treatments that enable new medicines and personalised therapies. At the same time, such treatments and medicines are often associated with higher costs and long approval times.

In addition, the spectrum of diseases in the population is changing. Chronic diseases such as high blood pressure are becoming more common - mental illnesses are also increasing significantly. This is associated with demanding, long-term, and cost-intensive therapies.



-10.4%

+5.9%

+9.1%

The topic of health permeates all areas of life and has long since become a megatrend. The advancing age structure and increased health awareness are contributing to the strong growth of the industry. Additionally, the COVID-19 pandemic increased the demand for efficient health care enormously. 

A fragmented and crisis-proof market

The healthcare market is a high-growth market. An ageing population and increased health awareness are the core drivers. In addition, technological progress enables the development of new drugs and therapies.

At the same time, the industry is struggling with a serious shortage of skilled workers, which is particularly reflected in the nursing profession. There is a trend towards size, which is leading to a consolidation of the fragmented market.  



Healthcare

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News & Sector Update

Sector Transactions

The number of private healthcare providers is increasing, while the number of hospitals overall is decreasing. Larger providers emerge to leverage economies of scale.  

Privatisation and consolidation

Germany is the world's third largest producer of machinery. Mechanical and plant engineering is thus considered the leading export and innovation sector of the country. The industry, which is strongly characterised by small and medium-sized enterprises, manufactures complex products for the entire economy and utilises technologically sophisticated preliminary products.

The topic of Industry 4.0 has a significant influence on the structure and development of mechanical and plant engineering. The need for software expertise is continuously increasing - software-based services open up new, innovative business models.

Materials of the future also enable completely new approaches to products and production processes. Materials and material combinations such as laser crystals or customisable plastics are being developed ever faster in laboratories and brought to market. 



-9.7%

+2.6%

+5.3%

In recent years, the mechanical and plant engineering industry has devoted itself to digital challenges. The introduction of digital production processes offers promising prospects for industrial companies in the context of developments such as Smart Factory and Industry 4.0. 

The innovation engine of the German economy

Mechanical and plant engineering reflects the entire range of performance capabilities of the German industry and is one of the most innovative industrial sectors. The development of Industry 4.0 opens up optimisation potential along the entire value chain. 

In the future, new markets will emerge and turnover will be determined by a firm’s capability to cope with challenges such as digitalisation, climate protection and the mobility revolution, among other things.


Industrial

Digital twins are the digital representation of physical objects and systems that can be used to optimise and link processes, improve production, and minimise failure rates.

Digital twins

The construction industry is a key sector in Germany. In 2021, the construction industry contributed 5.9% to the overall economic gross value added – companies in the construction industry generated sales of approx. EUR 192 bn. The industry is made up of the main construction trade with approximately 75 k companies and the finishing trade with approx. 250 k companies. With annual growth rates of 4.9% since 2012, the construction industry is a clear growth market. 



Future Trends 

Innovative solutions increasingly enable the interactive involvement of customers in planning processes. In addition, the growing environmental awareness within society will be reflected in the sustainable construction industry - e.g., through the reuse of materials within a closed cycle.

Along with this, the role of software solutions, for instance in the form of new simulation and calculation methods, is continuously increasing. 



+5.7%

+2.7%

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The construction sector in Germany is booming. Population growth, demographic change and a favourable economic environment are creating a high demand for residential buildings. In addition, interesting niches such as multi-generation houses, micro-apartments and prefabricated houses are becoming increasingly important.

Clear growth market with scope for digitalisation

Advancing digitalisation is increasingly transforming the construction industry. Greater efficiency and lower construction costs through machine learning, artificial intelligence and 3D printing are on the horizon. At the same time, the shortage of skilled workers will continue to accompany the construction industry. The growth potential of the industry as a whole is heavily dependent on the personnel situation within the companies. As a result, consolidation pressure is increasing, especially for small and medium-sized players.

Infrastructure 

Saxenhammer has in-depth professional and industry knowledge and can draw on a broad network of industry experts who have gained many years of transaction experience. 

BIM aims to digitise the collaboration between the different parties in a construction project. Its use increases transparency and plan accuracy of the process.  

Building Information Modelling (BIM)

As the largest economy in the centre of Europe, Germany is the continent's most important logistics centre with a globally leading infrastructure and state-of-the-art logistics services. The central location offers companies opportunities for convenient pan-European distribution and easy access to the EU's 500 m consumers. The World Bank recently ranked Germany three times as number one in the global Logistics Performance Index.

The use of innovative technologies to optimise supply chains is becoming increasingly important. Through the Internet of Things (IoT), every object can be linked to another via the network and enable data exchange. 
The digital networking of the supply chain is increasingly turning freight forwarders into strategic partners via deep integration into customers' supply chains. This opens up new business fields and cost advantages.



-2.1%

+5.8%

Germany, being one of the world's leading logistics networks, is currently being further promoted. The main focus is on the transport of goods and people by rail. Most recently, the largest investment package to date of over EUR 86 bn for the maintenance and modernisation of the rail network was approved.

Innovative technologies as growth drivers 

Germany occupies a leading position in infrastructure quality and logistics technology. The logistics sector is a clear growth market - the digital networking of supply chains is at the centre of this. 
New service offerings and business models can be developed in particular from the coupling of existing, successful technologies and innovative processes with incumbents existing systems.



Logistics

Saxenhammer has in-depth technical and industry knowledge and can draw on a broad network of industry experts who have gained many years of transaction experience.

Artificial intelligence holds crucial potential for the logistics industry, such as efficiency gains through reduced downtime and increased planning accuracy.

Artificial intelligence & autonomous logistics

Germany has the largest advertising revenues in Europe - next to the UK. In 2020, the industry generated a market volume of around EUR 46 bn, which corresponds to a share of GDP of about 1.3%. Around 900 k people are employed in the media and advertising industry in Germany. The media industry includes all companies involved in the development, production and distribution of media content for information and entertainment purposes. 

Future trends are clearly marked by the advancing digitalisation of the media and advertising industry. Digital media are moving further and further into the foreground - already in 2020, Facebook and Google together took every third advertising dollar worldwide.

We are also heading into a post-cookie era. Targeted marketing as we know it today will then no longer be possible. This increases the importance of first party data and ID alliances enormously.


-9.9%

+5.2%

More than almost any other market, the media and advertising industry are influenced by the progression of digitalisation. Advertising agencies are increasingly relying on digital forms of advertising, especially online advertising. The boundaries between technology providers and content producers are becoming increasingly blurred. 

Winning the future

The megatrend of digitalisation is having a noticeable impact on the media and advertising industry. Even before the Covid 19 pandemic, the influence of digital media was increasing significantly. The Corona crisis further strengthened this trend. 

At the same time, digital media show considerable growth potential, especially in the area of mobile devices. Digital skills therefore play a central role in the future development of companies within the industry.


Media & Advertising

The Core Web Vitals are new Google metrics to evaluate the user experience or user-friendliness of mobile, but also desktop views of a website.

Core Web Vitals

The real estate sector - in particular brokerage, management, retail and rental of real estate - is one of the largest economic sectors in Germany. In 2021, its turnover of EUR 346 bn reflects 11% of Germany’s economic gross value added. The sector encompasses approximately 291,000 companies with 293,000 employees and continues to show stable growth. 

An increasing relevance of sustainability affects the German real estate sector, highlighted by the rising number of “green buildings” complying with sustainable regulations in terms of planning, construction and operation. In 2021, certified sustainable property accounted for 26% of individual transactions (corresponding to EUR 12.6 bn). Most recognised certificates are issued by institutions such as the DGNB, LEED or BREEAM. An upswing of green real estate investments is expected to continue as digital transformation and product innovation play a dominating role. 

The real estate industry is on the rise again. According to a study by PwC (2021), confidence in the real estate industry is at its peak although the long-term outlook remains with uncertainties. Future topics playing a key role are as follows: digital transformation, development of strategies regarding the environmental sustainability and its community as well as customer and product innovation (i.e. property technology).  

The real estate market on the upswing 

The real estate sector is proving to be very promising going forward. Trends such as green buildings, property technology and overall digitalisation provide a basis for the industry’s sustainable transformation. Innovative business models are in demand, driving the consolidation pressure within the sector. 

Real Estate

Saxenhammer has in-depth professional and industry knowledge and can draw on a broad network of industry experts who have gained many years of transaction experience.

“PropTech” is essential to the digital transformation of the real estate sector. It covers the entire real estate life cycle using software and hardware solutions to optimise processes and business models, driving overall efficiency. Innovation and efficiency are thus set to revolutionise the industry.  

Property Technology

In the era of digitalisation, the German technology sector is of particular importance. The sector not only represents an important branch of the economy with more than EUR 230 b in annual turnover, one million jobs and almost 7% of total economic output. In the context of digitalisation, the sector is above all a central driver of innovation and has a significant impact on other sectors.

Internet of Things and the implementation of the 5G network enable futuristic business models such as autonomous driving, telemedicine and the control of machines over the internet. As early as 2020, around 750 m network-enabled devices will be in operation in Germany alone. 

In addition, subscription business models (as-a-Service) are a rapidly growing field. Cloud-based models open up new sources of revenue while at the same time improving margins. 



The German technology sector finds itself in an ambivalent market environment. The segments of the technology sector are increasingly developing in different directions. While software and services are fundamental growth drivers for the entire sector, sales in the hardware segment are increasingly stagnating. 