My opinion is because they have the highest quality products in the auto and machinery sectors in the world. I don't know how they gained their quality advantage. Some speculate that is something that is iingrained in the German character. But I don't think they needed coercive tactics to manipulate people into buying a benz or beemer instead of a chevy.
Clearly it is a complicated equation. National character, education levels, the rule of law etc all are important. But they would be selling a lot fewer cars if the price were 50% higher. China forces western companies to share trade secrets and intellectual property as the price of entry into their market. They also tolerate if not encourage the wholesale theft of IP. We could respond but instead we do nothing. Of course, one area where we do compete is the sale of politicians. China has a large strategic stockpile of US pols, as do the arabs. I get tired of hearing these WSJ editorial page lectures about how free trade is so great for us. I value results, not theory. The results of free trade have been catastrophic, unless you confine yourself to shopping at Walmart. The WSJ is also a big proponent of open borders. How is that working out for the blue collar workers here or the taxpayers who have to pay the bills for an army of illiterate poor people with lots of kids who have a legal right to a free education and free health care? Rich people are largely insulated from this slow motion disaster or even prosper from it. It's not like their privileged kids will ever have to work at a real job, or even learn how to cut their own grass. And how sweet is it to get a deal on a german luxury car? But sooner or later, a price will have to be paid. A country can only live beyond its means for so long. And all those poor people with no future tend to make poor choices at the ballot box.
what is also odd... is my father had nothing but bad luck with a mercedes and a guy I work with has a terrible porsche cayenne but does not like to admit it ... and he says neither does the dealer allow any of his employees to acknowledge theirs issues. so I did a bit of clicking... http://dougdemuro.kinja.com/german-reliability-the-greatest-myth-ever-sold-to-amer-1572026115 For proof, I start with my own experience owning German cars. I've owned eight, in total: one from every important German automaker, and also Volkswagen. And they were all complete pieces of crap. OK, so maybe they weren't that bad. Oh, sure, the transmission died in one of them. And yeah, so I had to replace the ignition switch in another, and a differential in a third. There were failed window regulators, check engine lights, prematurely worn suspension components, and phantom tire pressure monitors. And my Mercedes G-Wagen suffered throttle response problems until I realized it was rusty enough to be a Civil War-era shipwreck. But they were great when they were working, right? Unfortunately, this is the greatest problem with German cars: they're never working. Oh, sure, they have relatively few problems for the first few years of ownership. (Technically defined as:"Right up until the Thursday after the warranty expires.") But even then, you're still losing an insane amount of money in depreciation. And once the depreciation curve starts to flatten, the problems start to crop up, which means you can't safely own a German car for more than an afternoon without spending as much money as round trip airfare to Bermuda. Of course, my own anecdotal experiences aren't my only evidence here. We also have years of JD Power Long Term Dependability Studies, which routinely place American or Japanese cars into the top dependability spots, while German cars go into entirely different categories, such asBroke Down on the Way to Test Facility. http://www.autoguide.com/auto-news/2012/05/are-german-cars-reliable-myth-german-engineering.html These results are reflected in numbers released by J.D. Power & Associates as well. In the both of the latest J.D. Power Surveys, the German brands can’t match up to their luxury peers. In the most recent vehicle dependability survey, Mercedes-Benz only gets a four out of five, which is “Better than most” rating, while Audi and BMW get 3/5 or “About Average.” Volkswagen falls below average with 2/5, what J.D. Power describes as “The Rest.” Porsche is also ranked “Better than most” in J.D. Power’s dependability survey, which give Mercedes-Benz some nice company. It’s important to note that only one car maker had a score of 5/5, and that’s Lexus. Nothing changes in J.D. Power’s Initial Quality rankings. Mercedes and Porsche have 4/5 ratings, BMW and Audi get just 3/5 and VW only achieves 2/5. Lexus tops that ranking as well with a 5/5. The J.D. Power ratings are based on consumer surveys. Initial Quality is measured after 90 days of a new car’s purchase. Vehicle Dependability Ratings are surveys based on the past 12 months of original owners of three-year old cars. POOR RANKING NOT JUST ABOUT QUALITY Some of the reasons why German cars struggle in J.D. Power’s rankings in the past are entirely trivial and are not related to actual vehicle quality at all says Karl Brauer from Total Car Score.
That's the dirty little secret. You want quality, but a Lexus. This is all about brilliant marketing. Selling the image. Most people buying these cars don't know how to check the air in the tires.
Yeah, ok. Germany doesn't make quality products. Image isn't part of quality. It's just one big scam run by Germany. And the euro that is too high for greece and spain to sell anything is just too low, and that's why Germany sells cars. But unfortunately, making me pay more for everything I buy, isn't going to make me any better off at all. Not in the least.
Germany was manufacturing high quality products with good profit margins for several decades before the Euro came around. Germany's success is not really due to a mispriced currency, it is due to their long term commitment to manufacturing high quality products with excellent margins.
I don't believe I argued for banning german cars. I am saying that our companies face an uneven playing field in many countries. If a foreign company wants to sell large amount of product here, we should do like the chinese and insist they locate a factory here and share IP with local partners. The American car industry has had a problem with management for decades and still does. One need only look at GM to see that. It's had a union problem as well, and it's hard to feel sorry for unionized workers making unreasonable salaries and producing poor quality. A lot of that stems from government interference. But this isn't really about fairness. It's about winning. Winning in tyhis context means increasing our national wealth instead of shipping it overseas. We have one asset that we seem shy about using, and that is access to our market.
There is another factor being missed here. It underlies one reason why Germany is doing better economically than the PIGS, despite there sharing the same currency. (This same factor may suggest trouble ahead for health in the U.S. economy.) Income inequality! Germany enjoys a very low ratio of income of the top 10% to the bottom 10% compared to the PIGS and the U.S. The German labor force is well paid. Nouriel Roubini recently explained why income disparity that leaves large fractions of a countries workforce barely able to make ends meet is bad for the macro economy. In a nutshell it is because those at the top end of wealth and income spend a smaller fraction of their wealth on consumption of goods and services, and there are relatively few people at the top, whereas those in the lower ranks are many, and they spend a high fraction of their wealth and income on goods and services. But they have only a small fraction of total wealth and income to spend. This problem does not plague Germany where the wealth and income scale is compressed and a far greater fraction of total wealth and income resides in the middle class. Roubini seems to be yet another of those tiresome economists that does not subscribe to the popular Republican idea that the best way to help the poor and the middle class is to make the rich richer.
The Germans have a very high number of engineers per capita compared to their competitors. That might play a role.