Record results by luxury automaker BMW illustrated the power of the German export machine, as China emerged as a bigger market for German industry than the United States.
BMW posted record revenues and net profit for 2010, in part owing to an 85.3% jump in sales to China, Hong Kong and Taiwan while Germany as a whole saw total exports soared 24.2% in January.
The company said its 2010 net profit was up 15-fold to a record 3.23 billion euros (US$4.45 billion) from 210 million euros in 2009. Revenues were up 19.3% to a record 60.48 billion euros while core earnings before interest and tax (EBIT) were more than 17 times higher at 5.09 billion euros.
"We are extremely pleased with developments over the past financial year," BMW chairman Norbert Reithofer noted, as the company forecast record sales this year again of at least 1.5 million vehicles.
BMW shipped 183,328 vehicles to China, Hong Kong and Taiwan last year, putting the region in third place behind Germany, with 267,160, and the United States on 266,580.
UniCredit chief German economist Andreas Rees noted that "for the first time ever, German companies shipped more goods to China (including Hong Kong) than to the U.S.," calculating their respective shares at 6.6% and 6.5%.
Rees called the shift "a turning point in German economic history" but noted that a cooling of the Chinese economy would quickly affect Germany as well.
The value of all German exports came to 78.5 billion euros ($108.7 billion) in January, the statistics office Destatis said, while imports rose 24.1% to 68.4 billion euros. That produced a trade surplus of 10.1 billion euros, up from 8.1 billion euros in January 2010.
On a monthly basis however, exports fell 1% while imports were 2.3% higher but economists did not expect that to become a trend. "This setback at the start of the year is unlikely to change the fact that exports will remain the major driver of the German upswing this year," said Commerzbank analyst Ulrike Rondorf.
China has led emerging markets as a prime destination for German products, from autos to chemicals and machine tools used to produce finished consumer products which in turn are exported around the world. Germany still sells most of its goods to other members of the 27-nation European Union however, with the bloc buying 48.3 billion euros worth of German exports in January. A pick-up in the U.S. economy, still the world's biggest, has bolstered trade with that key partner as well.
Figures provided by the German central bank showed the current account, a broad picture of trade in goods and services along with financial transfers, had a surplus of 7.2 billion euros in January. One year earlier it stood at 5.6 billion euros.
ING senior economist Carsten Brzeski noted that "'Made in Germany' remains a bestseller. "In the coming months, this quality feature will probably be the strongest asset to weather new storms," he said.
Copyright Agence France-Presse, 2011