Despite the gloomy global and eurozone economic woes, German businesspeople in Korea presented positive forecasts of their business prospects for this year.
Industry leaders from 10 German companies and the German ambassador to Korea spoke during the Korean-German Chamber of Commerce and Industry Economic Outlook seminar on Jan. 19.
Friedrich Stockinger, KGCCI president and chief of Trumpf Korea, said that “2012 will mark the Year of the Black Dragon, but I am confident that even without the help of astrology it is going to be another outstanding year for the German machinery industry.”
Korea is the fourth most important German business partner outside of Europe after bilateral trade increased by 6 percent in 2011. The machine industry is the most important sector in the business relationship.
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Captains of German industry pose after attending the annual Korean-German Chamber of Commerce and Industry Economic Outlook seminar. (Yoav Cerralbo/The Korea Herald) |
After two impressive years of growth, Stockinger noted that this year will be balanced.
“In the past two years we had 65 percent growth,” he said. “So we are planning for 5 percent internal expectations for the year to come.”
Stockinger added that the technology credit sectors are expected to grow again and will be a driving force for the country’s exports.
HSBC’s Global Research for the Korean economy noted that growth will be most vulnerable in the first quarter of the year as domestic and external demand face heightened uncertainties.
Also, HSBC predicts that inflation is set to come down, making room for the Bank of Korea to support the economy by cutting rates.
Stockinger added that companies need to be “more flexible and faster in reactions than ever before.”
Frank Robaschik, the representative correspondent of Germany Trade and Invest explained that after two very good years “we expect sluggish growth.”
“Unless the fiscal crises in Europe, the Untied States or Japan escalate strongly, we expect slightly rising trade volumes for Korea and facility investment staying at high levels,” Robaschik said.
The German Trade and Invest office is optimistic about the automobile industry and predicts further positive effects from the Korea-European Union free trade agreement for German suppliers such as the food industry
German imports into Korea grew 18.6 percent and “we have very strong growth of German car and car parts and also growth in optical devices,” he said.
Audi managing director Trevor Hill expects strong growth in the industry after a year in which sales of foreign cars grew 16 percent, taking almost 8 percent of the total new car market.
“Last year it was the German brands driving that growth,” Hill said. “Porsche almost tripled its sales from last year and all German brands are growing strongly.”
Out of the 105,000 foreign cars sold in Korea last year, German automakers nabbed almost 68 percent due to attractive prices and incentives, the EU FTA and target marketing for certain models.
Also at the economic outlook seminar was German Ambassador Hans-Ulrich Seidt, who highlighted his positive expectations for a stable political situation on the Korean Peninsula, as well as economic development in Europe. He said that both these things would lead to an excellent business environment in 2012.
Juergen Woehler, secretary general of KGCCI said that “due to the new FTA between Korea and the EU, we observed an increased interest in investment from and to Germany. This is also reflected in a rising demand for our services as well as our membership increase.”
By Yoav Cerralbo (
yoav@heraldcorp.com)
