Germany is a federal republic formed by 16 federal states with a total of 82.5 (2016) million inhabitants, over 10 million inhabitants with emigration background (EU and Non-EU) – a huge consumer and business market. Germany is the world’s fourth-largest economy, highly innovative and has a strong focus on exports. It is a challenging export destination for Finnish companies but it also offers big opportunities and numerous niche markets. As a major manufacturing nation, Germany is critically dependent on imports to full fill the needs of domestic and foreign industries. Its machine tooling and engineering sectors have enjoyed a strong reputation worldwide as partner, importer and exporter.
The 16 federal states in Germany are quite autonomous and different. They have their own regulations and regional characteristics. It is important to be aware of these differences and evaluate their importance in one’s planning.
Foreign SME companies have every reason to explore the German market. After all, small companies are important in Germany, too. 99.3% of the total of 2.4 million enterprises in Germany are SMEs (2015). SMEs generated 85% of turnover in the economic sector of construction, accommodation and food services. In many sectors Germany holds a prominent position internationally, e.g. automotive, mechanical engineering and chemical/pharmaceutical industries. Renewable energy and anything related to its production is in demand because the energy revolution from nuclear power to green power has already been underway since 2010. Germany is also associated with ecological thinking, natural products and organic food.
Companies from countries like Finland will find a variety of niche markets in Germany. It is useful to know that the German and Finnish business cultures have more similarities than differences and that Germans usually like to work with Finnish companies. Finns are known for reliability and high quality. On the other hand, those coming to Germany need to accept that high quality is taken for granted and that progress may be slow because everything needs to be carefully thought out and planned. Germany is usually not characterised by sudden swings. It is synonymous with stability, solidity and reliability.
Seppo Hoffrén Consultancy’s German consultant has worked with Finnish SMEs from a wide range of industries since 1995. The consultant has helped Finnish managers to understand the complicated structures of the German market and to select the right partners or customer groups. We adjust our services according how much progress the client has already made and we rely on a practical, down-to-earth approach.
Any further questions are more than welcome!