More than 1,600 Italian companies are well established in German value chains

More than 1,600 Italian companies are well established in German value chains. German-Italian economic relations are even more intense if one considers the complex web of links in global value chains

Germany represents the second destination of Italian entrepreneurs, with a 10.8% share of the total turnover achieved by Italian foreign subsidiaries in the world (€59 billion out of €546.2 billion according to Eurostat data).

This was revealed by the research “The value of Italian companies in Germany,” carried out by the Intesa Sanpaolo Research Department for the Italian-German Chamber of Commerce (AHK Italien) to quantify the presence of Italian-controlled companies on German soil and their contribution to the local economy.

Specifically, there are 1,670 Italian companies operating in Germany (7% of the total number of Italian foreign subsidiaries), employing 104,000 people, 61% of whom are in the service sector and 39% in manufacturing. Lombardy is the first region of geographical origin of the companies, followed by Veneto, Emilia-Romagna, Piedmont and Trentino-Alto Adige.

Examining the total turnover of foreign subsidiaries operating in Germany, the Italian share is 2%, but it increases for wholesale distribution (4.4%), transport (2.5%) and some manufacturing sectors, such as construction products and materials (6%), electrical engineering (4.2%), metallurgy and metal products (3.9%).

An in-depth analysis of a sample of financial statements for the three-year period 2017-19, extracted from the ISID (Intesa Sanpaolo Integrated Database) reveals a high average size of the parent companies of Italian companies active in Germany compared to those operating in other countries. The breakdown by turnover class shows 44% of large companies and 20% of small ones, to be compared, respectively, with percentages of 19% and 43% in the overall sample of the parent companies of foreign Italian companies.

Restricting the observation perimeter to the manufacturing sector, the parent companies of Italian companies on German soil stand out for a greater diffusion of trademarks (they are owned by 62.1% of the companies, against 41% in the total sample of Italian foreign subsidiaries), patents (58.5% against 36.4%) and environmental certifications (27.8% against 19.5%), indicating their high strategic-competitive profile.

German-Italian economic relations are not limited to the direct presence of Italian-controlled companies, but are actually even more intense if we consider the complex web of ties that characterises the global value chains. European partners generally play a key role in the functioning of the German production machine, in all manufacturing sectors.

Italy, in particular, holds a leading position among the suppliers of the automotive chain with an added value contribution of 2.4% to German car production, ahead of France, Poland and China.

The Italian contribution is extremely diversified in terms of merchandise, thus reflecting the heterogeneity of the country’s production base, but it stands out above all in engineering, rubber-plastic intermediates and textile-leather for the automotive industry.

Moreover, Italian companies in Germany are well integrated in German value chains, resulting in a presence based on high quality and strategic integration within the German scenario.