14 Feb 2024

Relocation of production to the USA: German companies are conquering new markets and opportunities

An exciting development is bubbling in the vastness of the global economy: More and more German companies are taking the step of relocating production to the USA. What are the advantages for the companies and how is Berlin changing as a business location? Join us on this journey into the future of the German economy.

1. Relocation of production to the USA - New markets, new opportunities

German corporations are increasingly shifting production to the USA in order to conquer new markets and take advantage of opportunities. The reasons for this decision are varied. On the one hand, the American market is attractive with its high sales potential and strong demand. The USA also offers attractive framework conditions such as cheap electricity, subsidies and a stable political situation. Last but not least, the location advantage also plays a crucial role: Being close to customers and suppliers can save costs and shorten delivery times. German companies have already achieved impressive success in relocating production to the USA, showing that this strategy can be worthwhile. However, to benefit from this trend, German companies should plan carefully and take into account possible challenges such as cultural differences or the real estate market. A targeted relocation of production to the USA opens up new opportunities for German companies in a growing market and strengthens their position in the global economy.

2. Why do German companies relocate their production to the USA?

German companies can relocate parts of their production to the USA for various reasons. Some of these reasons could be:

  1. Proximity to market: relocating production to the USA allows German companies to be closer to their American customers. This can result in shorter delivery times, lower transportation costs and greater responsiveness to market needs.

  2. Cost efficiency: although the U.S. is traditionally considered a high-wage country, there are still certain areas or regions where labor costs are competitive or where other business factors, such as tax breaks or cheap energy prices, can reduce overall costs.

  3. Access to skilled workers and technology: the US has a highly skilled workforce and advanced technology infrastructure. German companies can benefit from this expertise and technology by moving their production to the USA.

  4. Trade policy: trade policy considerations could play a role. In view of trade tensions or uncertainties in other regions, German companies could relocate their production to the USA in order to circumvent trade barriers or to position themselves strategically.

  5. Risk diversification: moving production to different countries can help spread the risk associated with political, economic or logistical challenges in a particular region. The US could serve as a stable and attractive location for this risk diversification.

  6. Promote growth: expanding into the US market through local production can help German companies diversify their business and promote growth. The USA offers a large and diversified market with numerous opportunities for companies in various industries.

It is important to note that the reasons for moving production to the US can vary depending on the company and industry. The exact factors influencing the decision depend on a variety of internal and external factors, including strategic objectives, cost structures, market dynamics and regulatory environments.

3. The benefits of moving production to the USA

German companies are increasingly deciding to relocate production to the USA. This strategy offers numerous advantages that should not be ignored.

All of these factors make the USA extremely attractive for German companies looking for new opportunities for success. Through targeted production relocation, they can strengthen their position on the global market and ensure long-term growth.

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4. Challenges and risks when relocating production to the USA

While relocating production to the United States offers numerous benefits, it also presents challenges and risks. An important aspect is adapting to new political and economic conditions. German companies must familiarize themselves with the different laws and regulations in order to operate successfully in the American market. In addition, the change of location can also cause logistical problems, such as organizing the transport of goods and materials over long distances. In addition, cultural differences and language barriers can lead to communication problems. Last but not least, financial factors also play a role: investments in real estate, machines and workers must be carefully planned in order to minimize cost risks. Despite these challenges, relocating production to the USA opens up new markets and opportunities for German companies in the global economy.

5. How can German companies benefit from relocating production to the USA?

German companies have a great opportunity to benefit from relocating production to the USA. The American market offers new possibilities and opportunities for growth and expansion. By relocating production abroad, German companies can strengthen their presence in the USA and benefit from the economic conditions there. The USA is an attractive location not only because of its size and strong position in the global economy, but also because of its political stability and economic environment. In addition, they offer companies a wide range of subsidies and incentives to attract investment. New markets, lower electricity costs, affordable real estate prices and a skilled workforce are other advantages of relocating production to the USA. German companies should use these opportunities to strengthen their market position and exploit their growth potential. A targeted relocation of production can help you successfully enter the American market and be successful in the long term.

The right outsourcing partner - Zeitarbeit International s.r.o.

Do you want to relocate a project, a service or an entire company to the USA? Then you need a right partner who can assess the opportunities and risks well and support you in outsourcing production processes. 

We from Zeitarbeit International, see ourselves as a full-service provider and accompany companies through the entire outsourcing process. We work closely with the founding law firm together, whose tax consultants take care of the sales tax returns, annual financial statements and other questions. We are available to advise you on all legal matters.
Whether tax optimisation, inheritance/company succession, company expansion, foreign holding company or asset management. We find the optimal solution for almost all projects.

Frequently Asked Questions:

Relocation of production refers to the process by which a company moves its production facility from one location to another. This can happen either within the same country or internationally.

One of the main reasons for the relocation of production is the Cost reduction. By relocating production to countries with lower labour costs, companies can reduce their Significantly reduce labour costs. This enables them to, offer more competitive prices and increase their profit margins. In addition, companies can also benefit from more favourable raw material prices, tax advantages or lower energy costs in other regions.

Relocating production can also serve to be closer to important sales markets and reduce transport and logistics costs. 

Challenges include adapting to new legal and regulatory frameworks, cultural differences, differences in labour skills and logistical challenges. Overall, relocating production is a strategic move for companies to increase efficiency, reduce costs and remain competitive. However, it is important to carefully consider all possible implications and carry out comprehensive planning to ensure a smooth transition.

Companies go to the USA for various reasons. One of the main reasons is access to the American market, which is one of the largest and most lucrative markets in the world. The USA offers great demand for products and services, which is very attractive for companies.

Another reason for companies to move to the USA is the favourable economic conditions. The USA has a stable economy with low tax rates and a business-friendly environment. This attracts many companies as they can have more favourable production and operating costs here. In addition, the USA also offers a high level of innovation and a strong research and development environment. Many companies see this as an opportunity to benefit from the technological advances and expertise in the USA.

There are various companies that are emigrating to the USA. Some examples are German automakers such as Volkswagen, BMW and Mercedes-Benz that have opened manufacturing plants in the U.S. to produce their vehicles in the American market. These companies often invest billions of dollars in new factories, creating jobs for American workers. Technology companies such as Siemens and SAP have also opened facilities in the U.S. to strengthen their presence in the American market. They use the technological resources and expertise of the USA to offer innovative products and services.

Other industries moving to the USA include pharmaceutical companies such as Bayer and BASF as well as consumer goods manufacturers such as Nestlé and Adidas. These companies generally move to the USA to be closer to their customers or to benefit from more favourable production costs.

German companies are relocating their production abroad for various reasons:   

  • Search for cheaper labour and lower production costs.
  • Access to new markets and therefore better market penetration.
  • Access to qualified labour and an increase in expertise and product quality.

Overall, relocating production abroad is a strategic decision for German companies in order to reduce costs, open up new markets and benefit from a specialised workforce. However, the exact reasons vary depending on the industry and company.