The German car manufacturing industry is, arguably, the most competitive in the world.

Europe’s biggest car producing country and the third biggest worldwide is home to three of the globe’s ten biggest car manufacturers by sales – Volkswagen, BMW and Daimler.

And, despite recent collaborations in some fields and an €875m (£730m) fine that the European Commission levied on VW and BMW last year for colluding to curb the use of emission technology, there is little the three enjoy more than putting one over on each other.

That is why the end-of-year sales figures published by the trio are always closely watched.

It can also be a cause of regional pride because the trio, all major employers, are all in different parts of Germany.

VW is based in Wolfsburg in the north of the country while BMW resides in Munich, at the heart of Germany’s richest region, Bavaria.

Daimler, meanwhile, is based in Stuttgart in south west Germany, the city neighbouring the Black Forest that is also home to Porsche and the appliances, power tools and car parts giant Bosch.

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Because the three compete over so many difficult categories, it can sometimes be difficult to establish who has had the best year, but working out who was in gold, silver and bronze position during 2021 has proved relatively straight forward.

Bringing up the rear is Volkswagen which, despite being the world’s biggest carmaker by sales, had a comparatively disappointing time.

VW, whose other brands include Seat, Skoda, Audi and Bentley, said today it suffered an 8.1% drop in global car deliveries during 2021 to just shy of 4.9m.

The company could still point to some triumphs, not least in the UK, where it has just ended Ford’s half-century leadership of the new car market.

VW was also keen to point out today that the proportion of purely battery-powered electric vehicles and hybrid vehicles it produced nearly doubled to 7.5% of total deliveries.

In Europe, meanwhile, such vehicles accounted for almost one in five of the new cars it delivered.

And, while there were sales declines in Europe and in the massive Chinese market, the company could also point to a 13% rise in North America.

Ralf Brandstaetter, chief executive of VW brands, said: “Volkswagen is continuing to press ahead with the transition to e-mobility despite the limited supply of semiconductors.”

Runner-up in Germany last year was Daimler, owner of brands including Mercedes-Benz, Maybach and Smart.

It announced on Friday last week that its Mercedes-Benz sold 2.05 million vehicles during 2021, a decline of 5%, again reflecting the global chip shortage.

The biggest reverse in sales was in Europe, where Mercedes-Benz suffered an 11.2% drop in sales, with Chinese sales falling by 2% and US sales actually increasing by 0.5%.

More significantly though, it meant that for the first time in five years, Mercedes-Benz was overtaken as the world’s premium carmaker to BMW – the out-and-out winner of the three in 2021.

The carmaker, which also owns the Rolls-Royce and Mini brands, grew car sales during 2021 by 8.4% to 2.5m.

The BMW brand itself shifted a record 2.2m units, a rise of 9.1%, making it the world’s biggest premium car brand.

BMW, too, pointed to a doubling of electric car sales and highlighted that Mini’s Electric model is now the best-selling Mini brand.

Pieter Nota, the BMW board member responsible for customer, brands and sales, said: “Despite supply bottlenecks and the continuing coronavirus pandemic, we achieved a strong sales performance in 2021, thanks to a powerful operational performance and stellar product line-up.

“Our brands reported numerous all-time best sales results around the globe – spearheaded by the BMW brand, which is number one in the global premium segment.

“With more than 100,000 fully-electric vehicles sold last year, ramping up electromobility was our clear focus.”

He said that, by next year, BMW would have at least one fully electric model on the roads in nine in ten of its current market segments.

The company expects to sell around 10 million fully electric vehicles during the next decade or so.

It would be easy to look at 2021, with the way chip shortages affected the industry, as one almost as unusual for Germany’s carmakers as 2020 was with its pandemic-related production shutdowns.

Yet the industry faces plenty of challenges ahead, not least the transformation towards electric vehicles and away from the internal combustion engine, the technology that has been at the heart of Germany’s industrial and manufacturing prowess for the last century.

Volker Wissing, who has been named transport minister in Germany’s new coalition government, has been publicly critical of the country’s comparatively slow move to so-called “clean mobility”.

Germany is the only developed economy in the world not to have speed limits on its motorways – a key issue during last year’s elections – while the three car making giants themselves have been accused of dragging their feet over the transition to electric vehicles despite the recent imposition of tough new emissions rules by the European Commission.

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That in part reflects the scale of the challenge: even before the pandemic, Herbert Diess, the VW chairman, was openly musing in an interview with the newspaper Handelsblatt that German car makers had only an even-money chance of negotiating the transition.

And that is not only a headache for the car manufacturers.

Germany is also one of the world’s biggest suppliers of car parts, an industry in which more than 820,000 people work in the country.

There are considerably fewer parts in an electric vehicle than there are in a car or truck powered by an internal combustion engine and, accordingly, that has implications for employment in an economy where there are an estimated 2.15 million “car-dependent” jobs.

So the transition is also a headache for the new German government and the three parties making up that government – the SPD, the FPD and the Greens – are by no means agreed on issues such as the imposition of speed limits or on a firm date for phasing out conventional vehicles.

It is a fair bet the carmakers will be urging, behind the scenes, for it to take a cautious approach.

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