We recently compiled a list of the 30 Wealthiest People in Germany and in this article we will look at the richest person in Germany.
Economic Outlook of Germany
Germany underwent a recession in 2023 and experienced a 0.2% decline in its GDP. However, it showed signs of a gradual recovery in the first quarter of 2024 with a 0.2% quarter-on-quarter growth amidst the economic headwinds. Germany is one of the richest countries in the world with a GDP of $5.69 trillion. The consumer front in Germany has also shown signs of recovery. The European Commission reported that purchasing power increased significantly in the country in 2023. This trend is anticipated to continue driven by eased inflation, leading to an increase in household income. Due to improved financing conditions, private consumption will also return to pre-pandemic levels in 2025. However, trade is projected to have a minor contribution toward economic growth in 2025.
The labor market reached a record high, defying the economic downturn in 2023. A staggering 83.6% of the population aged 20 to 64 contributed to Germany’s workforce in 2023. This resilience by the labor market is also translated into the low unemployment rate which is expected to remain stable around 3%.
Record-High Foreign Investments
Despite the economic headwinds, foreign investments reached a record high in Germany in 2023. On May 14, Reuters reported that foreign companies increased their investment in the country, recording a staggering 34.8 billion euros compared to Europe where foreign investment declined by 7.4%. A significant portion of the investment projects in Germany are targeted toward renewable energy and digitalization. The United States is the top investor in the country followed by Switzerland and China.
Wealth in Germany
Germany is one of the top 5 countries with the highest number of billionaires in 2024. There are 140 billionaires in Germany, as of 2024. It is one of the largest economies with a total wealth of $17.42 trillion, as of 2022. With a wealth per capita of $256,179, the country is also one of the richest countries in the world by per capita net worth. According to a survey by Deutsche Bundesbank, Germany has uneven wealth distribution according to European standards. However, the wealth inequality declined slightly between 2017 and 2021. Still, the wealthiest 10% in Germany possess around 56% of the total net wealth in the country.
Which Industry is Driving the German Economy?
The automotive industry in Germany is a key driver of its economy. The Germany Trade and Invest reports that the auto industry in Germany produced more than 15.6 million vehicles in 2021, with the highest R&D spending in its domestic industry. The country generated foreign market revenue of 274 billion euros in 2021, exemplifying the dominance of Germany in the global market. Bayerische Motoren Werke Aktiengesellschaft (OTC:BMWYY), or BMW AG, is one of the top leaders in the automotive industry globally and in Germany, employing nearly 155,000 employees as of December 2023. It is majority-owned by the richest woman in Germany, Susanne Klatten, and her brother, Stefan Quandt.
BMW AG (OTC:BMWYY) delivered over 2.5 million BMW, MINI, and Rolls-Royce vehicles to its customers in 2023, up 6.5% year over year. The group is focused on e-mobility and grew its EV deliveries by 74% in 2023, delivered 375,716 fully electric vehicles. For context, Mercedes Benz Group delivered 222,600 electric cars in 2023, up 73% year over year, and Audi delivered 178,429 electric vehicles in 2023, up 51% year over year. Electric vehicle sales accounted for 15% of BMW AG’s (OTC:BMWYY) total sales in 2023 and despite a highly competitive environment, the group logged 155.5 billion euros ($168 billion) in annual revenue in 2023, up 12% year over year.
The company is also off to a strong 2024 and is seeing robust demand for its electric vehicle line-up. In Q1 2024, BMW AG (OTC:BMWYY) delivered 83,000 fully electric vehicles (13.9% of total sales). The German automaker is focused on product innovation in 2024 and sees record high CapEx and R&D spending throughout the year. Its R&D was 1.97 billion euros ($2.1 billion) in Q1 2024, up 27% year over year from 1.55 billion euros ($1.67 billion). For the full-year, BMW AG (OTC:BMWYY) expects to generate 6 billion euros in free cash flow despite record CapEx and R&D spending.
BMW AG (OTC:BMWYY), like other automakers, has faced many challenges over the past few years including inflation, high interest rates, a semiconductor shortage, EV price wars, increased competition from new entrants, and many others. BMW AG (OTC:BMWYY) has been struggling with profitability and missed EPS expectations 5 times over the past 8 quarters. While management sees marginal growth in global deliveries this year and no change in its KPIs, it expects group pretax earnings to fall and EBIT margins to range between 8% and 10%.
BMW AG (OTC:BMWYY) operates in a cyclical sector, and within that, it operates in the luxury space. The stock has lost 17% over the past 12 months, and while there may be further near-term downside due to sector and macro headwinds, it may not be that bad of an idea to explore. BMW AG (OTC:BMWYY) has grown both its top and bottom line by a compound annual growth rate of 7% over the past 10 years. The stock is trading at 5 times its forward earnings, but that doesn’t mean it’s cheap because analysts expect its EPS to contract by 7% and its 5-year average multiple is also 5x. Automotive is not an area we are bullish on at the moment and we currently believe that AI stocks hold greater promise for delivering higher returns, that too within a shorter timeframe. If you are looking for an AI stock that is more promising than NVIDIA but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
Photo by Jacek Dylag on Unsplash
Methodology
To compile our list of the 30 wealthiest people in Germany, we utilized the real time billionaires data from Forbes and ranked the wealthiest people in Germany in ascending order of their net worths, as of June 7.
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The Wealthiest Person in Germany
1. Klaus-Michael Kuehne
Net Worth as of June 7: $42.6 billion
Klaus-Michael Kuehne is the wealthiest person in Germany, He is the honorary chairman of the leading logistics company, Kuehne + Nagel International AG. He joined the company in 1958 and took over as CEO in 1966. In 2016, the company acquired 20% shares of a real logistics company, VTG, and later sold it to Morgan Stanley Infrastructure. He also owns approximately 30% of Hapag-Lloyd, a shipping and logistics company. Kuehne is the largest investor of the German airline carrier, Lufthansa with a 17.5% stake in the company. As of June 7, he is worth $42.6 billion.
To learn about other wealthy individuals in Germany, check out our free report on the 30 Wealthiest People in Germany.
If you are looking for an AI stock that is more promising than NVDA but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock
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Disclosure: None. This article is originally published on Insider Monkey.