Austria. Synergies and Peculiarities of Trade Exchange with Italy

Geographical proximity is not the only factor in the close trade relationships between Austria and Italy: the important factor is the wide acceptance of Italian culture, style and, above all, industrial products and mechanical goods. Also, Austria manages to draw production investments from abroad, thanks to the most dynamic logistics network developed in Central Europe.

di Stefano Scuratti

As already mentioned in the previous articles, the importance of a market does not depend much on a country’s population but rather on its distance from Italy. We have also underlined the importance of the international market in Europe from in terms of synergies between the various European regions, such as the triangle joining Brno, Bratislava and Vienna. Finally, referred to each nation, we have always searched for a peculiar element to draw the attention of Italian companies. These concepts can be repeated when analyzing the Austrian market: in fact, more than the country’s proximity to Italy, the recent developments in the Czech Republic and the international marketing activities in the Brno region allowed the Italian companies to have frequent stopovers in Vienna. This could be no longer a waste of time, but rather an opportunity to develop some more relationships and improve the efficacy of the business missions. Another important issue for the Austrian industry is a concept that is quite often underestimated but is actually very important in international marketing strategies, that is to say the acceptance of Italian products and services in a third country.

The Austria-Italy partnership seen in numbers
The figure that perhaps better defines this concept in numbers is exactly the one published by Statistik Austria: in 2016, Italy was the second most relevant commercial partner of Austria, right after Germany, with a share of about 6.2% of the products purchased by the Austrians.
Once again, here is the concept of ease of business with the nations that are closer to the Italian territory.
A hypothesis that is mostly true when a nation is a neighbouring one with Italy, as in the case of Austria. Capital goods, vehicles and their parts accounted in 2016 for about 32% of the overall Austrian purchases: quite an important figure if we add semi-finished products (23%). Also the rest of the Italian exports (furniture, clothing, shoes), accounting for 14%, as well as chemical and food products, both accounting for about 12%, underline a wide acceptance of Italian culture, style and, above all, industrial products and mechanical goods.
We point out once again how important it is for Italy to be the second most relevant commercial partner for Austria, not only as a sign of national pride, but also as an index of smooth commercial negotiations.
These data are joined by the information provided by ABA – Invest in Austria, showing a steady development of Italian foreign direct investment in Austria both in the banking sector – with the acquisition of Bank Austria by the UniCredit Group – and the long-lasting presence of the Generali Group, the Eni Group and the Snam Group in the oil & gas sector, as well as companies like Autogrill, Geox and some major brands in the fashion and trade fields.

The credibility on the automotive sector
As for the automotive sector, which is often considered as an opportunity index for mechatronics on an international level, some of the Austrian global competences are the production of diesel and fuel engines coming from renewable energy sources, driving systems, special steels, high-resistance plastics, hydrogen hybrid systems, energy storage systems, connected vehicles, nanotechnologies and R&D in the field of mechanical and electronic components. The specialization degree and credibility of the Austrian automotive industry have made it possible to be capable of exporting around 90% of components manufactured in Austria, currently accounting for 43 billion of yearly turnover. As far as and research centres and institutes are concerned, these can work on international researches along with the Italian universities not only in the automotive industry. Some of the main ones are the Austrian Institute of Technology (AIT), the Carinthian Tech Research, as well as centres like Joanneum Research, Virtual Vehicle, Polymer Competence Center Loeben (PCCL) or Research Institute for Symbolic Computation (RISC). As for the R&D, Austria used to invest 2.2% of its GDP in 2004. The figure in 2015 increased to more than 3%: more than Germany in percent of GDP. Of the 10 billion euro invested in R&D, approximately 36% comes from the federal government, 47% from private companies and 1.5 billion euro is the share that foreign funds invest in the development of products in Austria. Finally, as for the taxes, company profits are subjected to a 25% tax rate, which is of great interest to the attractiveness of the country if it is matched with the most dynamic logistics network developed in Central Europe.