AGRICULTURAL SECTORS

Agricultural Fish and Forestry Sector Total

According to the Austrian official customs data, Austrian total agricultural, fish and forestry imports grew by 11.1 percent in 2007, compared to the previous year.  However, the below listed import/export statistics do not reflect total agricultural imports from the United States due to EU transshipments with the major sharing coming from Germany.  Actual agricultural imports from the United States are estimated to be twice as high.  U.S. agricultural exports to Austria for 2008 and the following years are expected to remain strong and growing.  Best prospects for U.S. exporters include wine, dried fruits and nuts, seafood, snack foods, health and organic food sector and other consumer oriented products.

Agricultural, Fish and Forestry Total Trade Table ($ million)

	2006	2007 (est.)	2008 (est.)
Total Market Size	7,605	7,800	8,150
Total Local Production	9,190	10,056	11,250
Total Exports (from Austria)	12,614	15,134	17,400
Total Imports (into Austria)	11,029	12,878	14,300
Imports from the U.S.	95	106	110

2007 (base year) exchange rate: $1 = EUR 0.73

Note: Source for 2006 and 2007 import and export figures is Global Trade Atlas; all other figures are unofficial estimates.

Dried Fruits and Nuts

Wholesome/natural foods are becoming more important to consumers. Demand for dried fruits and nuts as ingredients for cereals, as well as dried fruit and nut mixtures is steadily rising. Austrian production of dried fruits and nuts is limited to locally grown species like apples and walnuts. Demand for organically produced dried fruits and nuts is also on a sharp increase.

Demand for dried fruits like raisins, prunes, apricots, and all kinds of nuts is still growing.

The statistics below show actual Austrian imports from the United States not including EU transshipments. A large share of cereal, fruits and nut mixtures is sourced from Germany, where these items are processed and packed and then imported to Austria. Therefore, the actual import value of U.S. dried fruits and nuts to Austria is estimated to be about $20 million. The EU and Turkey are the largest suppliers of these products to Austria.

Dried Fruits and Nuts Table ($ million)

	2006	2007 (est.)	2008 (est.)
Total Market Size	166	173	177
Total Local Production	85	87	88
Total Exports (from Austria)	24	28	29
Total Imports (into Austria)	105	114	118
Imports from the U.S.	11	12	13

2007 (base year) exchange rate: $1 = EUR 0.73

Note: Source for 2006 and 2007 import and export figures is Global Trade Atlas; all other figures are unofficial estimates.

Wine

Austria’s average wine output is about 2.5 million hectoliters/year, which corresponds roughly to annual domestic wine consumption.  Large quantities of wine are imported and exported.  The predominant suppliers are Italy, France, Germany, and Spain, which supplies mostly red wines.

The import duty for non-EU wines is high.  However, there is a niche market for California wine, particularly high quality red wine.  In recent years, intensive promotion of California wines has been carried out which has resulted in increased sales of U.S. wines.  Demand for good quality, inexpensive U.S. wine priced from 5 to 8 dollar a bottle is increasing.  The main competitor for U.S. wines is Chilean wine.

A large share of California wines is imported through German wholesalers and does not appear as a U.S. import in the official trade statistics.  According to trade sources, the share of U.S. wines coming through Germany has increased sharply over the past ten years.  The numbers below show only wines imported directly into Austria.  Based on conversations with importers and distributors, we believe actual import values including transshipments to be closer to eight million dollars.

Wine Data Table ($ million)

	2006	2007 (est.)	2008(est.)
Total Market Size	712	717	735
Total Local Production	619	630	645
Total Exports (from Austria)	102	136	140
Total Imports (into Austria)	195	223	230
Imports from the U.S.	3	3	3.5

2007 (base year) exchange rate: $1 = EUR 0.73

Note: Source for 2006 and 2007 import and export figures is Global Trade Atlas; all other figures are unofficial estimates.

Fish and Seafood

Austria's small fish production is limited mainly to trout and carp. Since Austria is a landlocked country, all marine fish, shellfish, and crustaceans must be imported. The main suppliers are Germany, Netherlands, Denmark, Italy, and France. Of the total import value, fresh/frozen fish account for 30 percent, dried and/or smoked fish for 20 percent, fresh/frozen crustaceans and mollusks for 10 percent, and processed fish, crustaceans and mollusks for 40 percent.

Consumption of seafood is low, but rising. The reason for the general upward trend is the rising standard of living, health awareness, and the growing number of restaurants serving seafood.

As with most products, transshipments through other EU countries do not show actual product origin. We estimate actual imports from the United States to be $2.5 million.

Seafood Data Table ($ million)

	2006	2007 (est.)	2008(est.)
Total Market Size	321	382	392
Total Local Production	30	31	33
Total Exports (from Austria)	10	15	16
Total Imports (into Austria)	301	366	375
Imports from the U.S.	1.9	2.2	2.5

2006 (base year) exchange rate: $1 = EUR 0.73

Note: Source for 2006 and 2007 import and export figures is Global Trade Atlas; all other figures are unofficial estimates.

COMMERCIAL SECTORS

Computer Software and Services (CSP)

Overview

Showcase Europe provides U.S. exporters a broad perspective on Europe.  Organized around eight key sectors with the greatest market potential for U.S. exporters, Showcase Europe provides a framework for coordination and cooperation among the U.S. Department of Commerce's U.S. Commercial Service offices throughout Europe.  Sectors include aerospace, automotive, energy/power generation, environmental technologies, information and communication technologies, medical and pharmaceutical, safety/security, and travel and tourism.

In addition, the Quicktake Program provides an overview of market potential for a U.S. company's products from market specialists across Europe.  Surveys cover current and future demand, competition, and suggested next steps.

Key Links:   http://www.buyusa.gov/europe

http://www.buyusa.gov/quicktake

Computer Software and Services Data Table ($ millions)

	2004	2005	2006 (est.)
Total Market Size	4,410.5	5,062	5,224.5
Total Local Production	n/a	n/a	n/a
Total Exports (from Austria)	n/a	n/a	n/a
Total Imports (into Austria)	n/a	n/a	n/a
Imports from the U.S.	2,310.8	2,527.1	2,527.1

2006 (base year) exchange rate: $1 = EUR 0.796

Note: The above statistics are unofficial estimates

Source: IDC Austria

In 2005, the total packaged software sales reached approximately $1,432.8 billion (EUR 1,141.1 billion) of which application software represented $639.1 million (EUR 509.0 million).

System infrastructure software represented  $431.5 million (EUR 343.3 million).  Application development and deployment software accounted for $362.5 million (EUR 286.7 million).

In 2005, the value of IT Services totaled $3,511.0 billion (EUR 2,796.3 billion).  Of this total, system integration accounted for $1,257.5 billion (EUR 1,001.5), outsourcing $1,285.7 billion (EUR 1,024.0 billion), support and deployment $823.2 million (EUR 655.6 million), and training $119.1 million (EUR 115.2 million).

The expected annual growth rate is 6.1 percent for software products and 7.3 percent for services. 

In 2005 the top four vertical markets (combined finance, combined manufacturing, combined government, and telecommunications) accounted for 66.4 percent of IT services expenditure in Austria. The combined finance sector was the biggest spender on IT services with a share of 22.7 percent in 2005. This sector, including banks, insurance companies and other financial institutions, increased its expenditure by 6.0 percent year-on-year. IT spending in the financial sector continued to be spread among a large spectrum of services and solutions, ranging from hardware and network infrastructure development to systems integration and outsourcing.

New technologies, together with the larger market into which they are introduced, will stimulate demand for new applications in networks, optical storage, image processing, multimedia services, and more. 

German software is rapidly becoming a determining factor in the development of the country’s economic potential.  Global business activities by companies require complex, multilingual, multi-functional, disseminated software solutions.  The software must be globally integrated and standardized with interfaces to all possible available packages.  Software solutions must take into consideration local regulations and laws governing hardware produced and sold by different manufacturers.

European standards will be developed which will facilitate entry into larger markets for application software.

It is critical that software be “user-friendly” whether marketed to personal users, business professionals or executives.  It is vital that the software be “bug-free” and preferably written in German. Software packaging is important for retail sales and should be “in”.

IT spending is expected to increase in 2006. Leading drivers will include spending on security solutions, streaming media, digital identity services, and the wireless rollout.  Linux will experience a banner year, but web services will have less of an impact in the short term.  Windows XP will experience rapid growth but will not have the impact of previous Windows evolutions.  Overall, industry experts forecast that 2006 will be a better year for the industry than 2005 was.

Service providers will increasingly implement offshore services into their business models in order to be competitive.

IT services accounted for 45.8 percent of all IT spending in the country, and should remain the main force behind IT market growth in the coming years despite higher investment in packaged software applications.  The IT Services market in Austria expanded by 1.3 percent year-on-year in US dollar terms in 2005 and grew from $3.2 billion to $3.3 billion vis-à-vis 2004. It even declined when measured in Euros. The Austrian IT services market can be characterized as a very mature market with no clear drivers in sight.

Saturated and intensifying competition characterized the Austrian IT services market in 2005. The number of new large-scale projects plummeted compared to the previous year, and thus every project was fought over with vendors lowering prices to capture the deal.

IBM is the largest IT vendor in Austria. However, there are approximately 50 additional U.S. IT firms selling their products and services in Austria. In addition, there is strong competition from European and Asian suppliers in this market.

Enterprise security remains a fundamental aspect of a company’s IT infrastructure, and is reflected in spending on IT services around security.  Nevertheless, it is difficult to determine exact security budgets, as expenditure is spread across many departments within a company.  Themes such as physical security, information and transaction security and business continuity are being taken seriously, which creates a market for contingency planning, needs assessment, risk assessment, and management services.

The year 2005 saw the development of a variety of new security threats, with detected malicious code affecting traditional IT systems and networks, embedded operating systems, and mobile and VoIP technologies. The ongoing effort by security vendors to enhance security tools and contain damage from newly aggressive security attacks has spurred further growth in the Austrian security software industry. This sub-sector grew 10.5 percent from 2004 to 2005, reaching $65 million. The market is expected to achieve $122 million in revenues by 2010, representing a compound annual growth rate (CAGR) of 13.4 percent.

Best Products/Services

Demand for multifunctional security solutions and security software is rising significantly. Security technology is an important foundational element for many of the leading growth drivers in the IT market today, including web services and digital identity services.

Opportunities

The best opportunities for sales of U.S. software in Austria appear to be in the Internet systems engineering and applications consultancy, data bank and communications software/office automation, education, CASE, CIM and quality control. The primary end-users are industry, financial services, public administration, trade, health, energy, production, distribution, and electronic banking.

Resources

• ADV – EDP Association
• Austrian Computer Society
• Austrian Research Center Seibersdorf
• Vienna Chamber of Commerce – Dept. ICT
• Austrian National Competence Center for EDIFACT Development and Promotion
• Society of Austrian Internet Service Providers

Your contact in our office: Ingeborg Doblinger

Internet Services (INF)

Overview

Internet Services Data Table (millions $)

	2004	2005	2006 (est.)
Total Market Size Internet Commerce (IC)	16,556	28,256	38,073
B2C web spending	2,109	3,196	4,583
B2B individual end-use spending	2,187	2,686	3,505
B2B process use spending	8,263	15,757	22,269
B2B volume end-use spending	4,006	6,416	7,716

2006 (base year) exchange rate: $1 = EUR 0.796

Note: The statistics for 2006 are unofficial estimates.

Source: IDC Austria  

The Austrian market for Internet services is growing rapidly.  About 5.5 million Austrians were active Internet users in 2005, an increase of 8.9 percent over 2004.  Of these, 2,260,000 were workplace users and 4,522,000 were home users. Relatively high telephone costs and ISP subscription fees, a general reluctance by Austrians to use electronic payments, and data protection concerns hinder use of the Internet.  Nevertheless, the future of electronic commerce in Austria appears promising.  Austrians spent about $28.1 billion for online purchases of products and services of all kinds in 2005, up from only $ 16.6 billion in 2004, which is a growth of 69 percent.  By the end of 2006, online purchases will increase to $ 38.1 billion.

In 2005, 92 percent of computer users had modems, up from 90 percent in 2004.  During the same period, the number of ISDN business channels declined from 892,306 in 2004 to 856,636 in 2005. That number is expected to be about 865,000 in 2006.

Microsoft is winning the web-browsers’ duel with Netscape, with about a 90 percent market share.  The most popular search engines are Google with a 19.6 prcent market share, Yahoo with 19.2 percent, Lycos with 11.6 percent, Fireball with 8.9 percent, web.de. with 7.6 percent, and Altavista with 6.7 percent.

Despite some bandwith and tariff structure limitations, e-commerce is growing steadily. Presently, there are about 3.8 million commercial Internet users in Austria, compared to 3.3 million in 2004. Some 708,000 domain names are registered. A complete list of domain names can be obtained from the following website: www.nic.at

Telekom Austria’s A-Online is the largest Internet provider in Austria, but there are some 205 ISPs in the country.  A complete list of ISPs can be obtained from the following website: www.ispa.at

The most popular use of the Internet is general surfing, which accounts for about 40 percent, followed by e-mail at about 25 percent, specific searches for sites 15 percent, downloading 10 percent, Internet chat 5 percent, and participation in newsgroups at 5 percent.  Only about 30 percent of Internet users engage in on-line-banking.

Best Products/Services

Higher-ticket products solely dependent on broadband take-up are growing in popularity, including video-on-demand and music services that allow customers to download films and songs from the Internet.  Travel Internet bookings and on-line book, CD, and software  purchases have a high potential in this market.  

Opportunities

The prospect for e-commerce in Austria remains substantially positive, as consumers increasingly use the Web for both research and, ultimately, transactions.  On the B2B side, strategic sourcing and supplier enablement is increasingly commonplace.

Resources

www.adv.at                                                     ADV – EDP Association

www.ocg.at                                                     Austrian Computer Society

www.arcs.ac.at                                               Austrian Research Center Seibersdorf

www.viw.at                                                     Information Industry Association

www.ispa.at                                                    Society of Austrian Internet Providers

www.nic.at                                                      Domain Registration

Contact:

Ingeborg Doblinger, Commercial Specialist, Commercial Service, Vienna, Austria

Email: ingeborg.doblinger@N0SPAM.mail.doc.gov

Telecommunications Services

Overview

Telecommunications Services Data Table (millions $)

	2004	2005	2006 (est.)
Total Sales	5,857.4	6,018.1	6.168.5
Sales by Domestic Firms	n/a	n/a	n/a
Sales by Foreign-owned Firms	n/a	n/a	n/a
Sales by U.S.-owned Firms	925	980	1,015

2006 (base year) exchange rate: $1 = EUR 0.796

Note: The above statistics are unofficial estimates.

Net sales of services in the Austrian telecommunications market (end-user and wholesale) increased by approximately 6 percent, from $6.6 billion in 2004 to $7.1 billion in 2005. They included (in $ millions):

	2004	2005	2006 (est.)
Fixed Network Voice Telephony	2,059.2	1985.7	1,887.5
Mobile Communications	3,216.8	3,378.8	3,716.7
Broadband	453.3	552.5	663.0
Leased Lines	128.1	128.1	128.1
Total Net Sales	5,857.4	6,018.1	6,168.5

2006 (base year) exchange rate: $1 = EUR 0.796

Note: The statistics for the year 2006 are unofficial estimates.

Source: RTR GmbH and IDC Austria.

In 2005, the market for telecommunications services in Austria increased in total volume.  Growth was particularly strong in mobile communications.  Tariffs continued to drop in the fixed and mobile network sectors. 

More than half of 2005 sales can be attributed to mobile communications, which grew at a rate of 5 percent (in Euro terms).  As broadband penetration increased, sales in broadband services also increased by 21.9 percent in 2005 vis-à-vis 2004.  The Austrian telecommunications market employed 18,664 people in 2005. 

Mobile communications market

For a number of years, the prices for mobile telecommunications have fallen so dramatically that mobile telephony now presents the toughest competition for fixed network telephony.  By the end of 2005, there were 8.4 million active mobile phone subscribers, representing a penetration rate of over 90 percent.

The new regulatory framework for electronic telecommunications markets, which is laid down in five directives from the European Union and was also translated into Austrian national law in the summer of 2003, aims for a harmonized regulatory policy that promotes competition within the Member States.  Articles 14 through 16 of the framework Directive are of central importance, giving a clear mandate to the national regulatory authorities (in Austria RTR GmbH) to carry out extensive market analyses at regular intervals.

Because of a shortage of frequencies, the mobile communications market, which was liberalized in 1996, has fewer players than the fixed network.  Market entry for a new company is possible only if that company is granted or, since the summer of 2003, transferred frequency usage rights.  The Austrian mobile market has been quite competitive in recent years, but over the last year the market has shown signs of saturation, reflected in the restructuring of operations by some operators.  The market continues to be led by Mobilkom Austria with a market share of 40.8 percent, followed by T-Mobile with 25.4 percent, “One” with 19.8 percent, Tele.ring with 11.5 percent, and “3 Austria” with 2.3 percent in 2005.

Fixed network market

The estimated number of authorized public fixed voice telephony operators in Austria is 67.  Of these, six major players have a share of 90 percent.  At the beginning of market liberalization, the fixed network market opened up mainly via the carrier network operators.  Relatively easy market entry with little required investment input resulted in a large number of applications for licenses.  Most of the major providers are developing, or have already developed, into full service providers.  In addition to providing speech, data, and Internet services, they also offer server hosting, application services, and mobile services.  Providers that can offer a full range of products and services have the best chance of surviving in the long term.  There were 2.9 million fixed lines in service at the end of 2005.  Telekom Austria claims 2.8 million of these. The number of fixed access lines operated by Telekom Austria has been declining in recent years as customers opt for ISDN lines or replace their fixed line with a cellular subscription.  Meanwhile, the number of cellular subscribers has increased dramatically.

To sum up, the telecom services sector has been largely liberalized, and is well developed and extremely competitive.  Licenses are required for wire-bound public voice telephony, public offering of line leases, and wireless voice telephony.  A single simple registration requirement applies to all other telecom services.  The convergence of mobile phones, Internet, TV, satellite, and cable offer a potent mix of new services, especially to American firms, which are the most experienced suppliers for many of these services.  U.S. telecom service providers present in Austria include Abovenet Communications, Airpage, AT & T Global Network Services, Equant Network Services, Facilicom International, UPC Telekabel, and Verizon.

Best Products/Services

Mobile communications will continue to increase with the drop in tariffs.  Broadband penetration (expressed as a percentage of the population having it) is expected to increase from 1 million lines in 2005 to 1.2 million lines in 2006, while fixed network voice telephony and leased lines will decline somewhat.

Broadband as a growing sector should be an attractive target for investment by U.S.  companies.  An alternative operator or Internet Service Provider (ISP) can implement broadband access to end-users either by using self-operated access technologies such as optical fiber, power-line, radio networks (W-LAN), and cable television networks (CATV), or by resorting to the unbundled (copper) access network of Telekom Austria and purchasing bit streaming as a wholesale service.  An enormous potential for further development of the broadband market through the use of innovative technologies and products exists.

Opportunities

No information on special projects or opportunities is currently available.  U.S. companies interested in investing in the broadband and VOIP sectors will find good opportunities in the Austrian market.

Resources

Web Resources:

http://www.rtr.at         The Austrian Regulatory Authority for Broadcasting and

                                     Telecommunication (RTR)

http://idc.com/austria   IDC Austria

Contact:

Ingeborg Doblinger, Commercial Specialist, Commercial Service, Vienna, Austria

Email: ingeborg.doblinger@N0SPAM.mail.doc.gov

Advertising Services

Overview

Advertising Services Data Table (millions $)

	2004	2005	2006 (est.)
Total Sales	2,481	2,632	2,722
Sales by Domestic Firms	n/a	n/a	n/a
Sales by Foreign-owned Firms	n/a	n/a	n/a
Sales by U.S.-owned Firms	744	776	803

2006 (base year) exchange rate: $1 = EUR 0.796

Note: These statistics are unofficial estimates.

Source: Focus Media Research

The Austrian advertising and public relations (PR) market is dominated by a few large Austria-based firms and many international advertising companies, including those from Western European countries, especially Germany and Switzerland, and from the United States.  Most advertising agencies are also active in the PR business.  There are also several exclusively PR firms operating in Austria. Some Austria-based agencies do business in the neighboring countries of Central and Eastern Europe, especially in cooperation with local joint venture partners.

In 2005, $2.632 million (EUR 2.096 million) was spent on advertising in Austria.  For 2006, the Austrian advertising market is estimated to be $2,722 million (EUR 2,166 million).  Over the next three years, annual growth of about 2 percent is expected.

There were no major changes among media providers or in programming in 2006 that might have affected market structure significantly.  With regard to the diversity of opinion and the variety of offerings, Austria’s official radio and TV company, ORF, continued to dominate the electronic media, in the same way that the “Kronen Zeitung”, Austria’s largest mass distribution daily newspaper, and the “Verlagsgruppe NEWS” in the magazine sector, dominated the print media.  Towards the end of the year, the new newspaper “Oesterreich” entered the market.

American advertising agencies hold an excellent market position, with approximately 30 percent of Austria’s total advertising revenues generated by twelve U.S. agencies.  The largest and most successful subsidiaries of U.S. agencies in Austria are McCann-Erickson, Grey Worldwide Austria, Ogilvy Group Austria and Ogilvy Public Relations, BBDO Werbeagentur, AHA Puttner Red Cell, JWT Wien, Lowe GGK, and Young & Rubicam Vienna.  Ogilvy leads among the U.S. agencies in annual revenues.

Best Prospects/Services

American advertising agencies enjoy leading market positions in the electronic media sector but also dominate in the print media area.

Opportunities

Revenues of successful U.S. advertising agencies should increase gradually over the next three years.  The future also looks promising for PR consultants.  Industry analysts predict that large diversified food companies, restaurant chains, pharmaceutical companies, and consumer electronics companies will increase their spending on advertising.  Event marketing, in particular, is likely to be profitable.

Resources

There are no trade fairs in the advertising sector in Austria.

Following are some key websites:

www.focusmr.com                               Focus Research (advertising data)

www.inma.org/members/datacenter/global-adspend.htm   World Advertising Research Center (country-by-country spending on advertising)

www.rtr.at                                           Broadcast & Telecommunications Regulatory Authority

www.iaa-austria.at                              Austrian Chapter of the International Advertising Association

www.iab-austria.at                              International Advertising Bureau Austria

www.sevenonemedia.at                      Seven One Media

Contact:

Manfred Weinschenk, Commercial Specialist, Commercial Service, Vienna, Austria

E-mail: manfred.weinschenk@N0SPAM.mail.doc.gov

Automotive Parts and Equipment

Overview

Automotive Parts and Equipment Data Table ($ millions)

	2004	2005	2006 (est.)
Market Size	5,306	6,040	6,644
Domestic Production	3,964	4474	5,010
Total Exports	2,985	3,256	3,549
Total Imports	4,327	4,822	5,352
Imports from the U.S.	433	614	736
Imports from the E.U. 25	3,656	3,887	4,120

2006 (base year) exchange rate: $1 = EUR 0.796

Note: Prouction Figures are calculated from PRODCOM statistics (position 3430), while trade figures are calculated from SITC statistics (position 784), so the match is not perfect.

Sources: Statistik Austria 2006 and Fachverband der Fahrzeugindustrie 

The Austrian market for automotive parts and equipment has grown sporadically over the past few years, due largely to its unusual structure.  Around half of the market is domestic OEM production and the other half is the aftermarket.  While the aftermarket has grown slowly with the leveling off of new car sales since 2001, the OEM market has risen and fallen quite dramatically in response to domestic assembly operations and global demand. 

The aftermarket in Austria was valued at $2.3 billion in 2004, the most recent figure, and it is unlikely to have grown significantly since then.  At the end of 2005, there were 6.2 million cars and trucks registered in Austria, of which 4.2 million were classified as non-commercial passenger vehicles.  Over half of these vehicles were built in Germany, and only 1.3 percent in the United States.  Leading automakers are the VW/Audi group, Opel Germany, PSA, Renault, and Ford Germany.  New registrations in 2005 totaled 308,000, down slightly from the 2004 total of 311,000.  Heading the charts in new registrations are the same auto manufacturers that lead the pack in total registrations, the VW group, with 31 percent, Opel with 9 percent, and PSA with 9.5 percent.  Austria is unusual in that over half of all cars and 65 percent of new registrations are powered by diesel engines. 

The average passenger vehicle life in Austria is 8.9 years, and approximately 50 percent of the cars on the road here are 7 years old or younger.  The average distance driven per vehicle and year is estimated at around 13,500 kilometers, a figure that has been falling over the long term due to an increase in the number of two-car households and the increasing affordability of air travel.

The OEM market in Austria grew strongly again in 2005, after excellent results in 2004.  Auto and auto parts and systems production is the second largest industry in Austria, after machinery and steel construction, and it is the most important export industry in Austria.  The two largest operations are Opel Austria Powertrain, which produces around 1 million power trains, 400,000 engines, and around 300,000 cylinder heads yearly, and a BMW facility that produces over 700,000 engines annually. Nearly 100 percent of this production is exported, primarily to the EU 25 countries. 

Auto assembly is becoming an increasingly important economic factor in Austria, with 230,505 vehicles produced in 2005, an increase of 1.5 percent over 2004.  Operations in this country are unique in the world, because there is no OEM assembly.  Instead, the Magna facilities in the Austrian city of Graz produce several small series for various makers on a contract basis.  This means that the product mix is constantly shifting according to manufacturer needs. 

Magna’s first and (still) most important customer is Daimler-Chrysler, for whom several high U.S. content vehicles have been and are being produced.  Chrysler models include the Voyager and Grand Voyager (37,587 units in 2005), and the Jeep Grand Cherokee (29,231 units in 2005).  New this year are the Chrysler 300c (sedan and station wagon) and the Jeep Commander, two niche market vehicles.  All of these automobiles have high U.S. content -- for most models it is between 50 and 60 percent.  Mercedes assembles the G model in Graz; this year, the 4-matic production has moved to Germany. 

In 2002-2003, Daimler-Chrysler withdrew assembly contracts for two high U.S. content models -- the Mercedes “M” and the PT Cruiser.  Magna put the freed capacity to work by starting relationships with BMW and Saab.  The company currently produces the Saab 9-3 Cabriolet in small series and the BMW X3, which currently accounts for half of the vehicle production in Austria, with 106,000 units produced in 2005. 

In 2008, Chrysler will cease production of the Voyager in Austria; it is not yet known whether another Chrysler model will take its place.

Best Products/Services

• Alloy wheels
• Performance tires

Opportunities

Austrian manufacturers have expressed interest in finding additional U.S. suppliers for  both local and U.S.-based production.

Resources

http://www.automobil-cluster.at                            Austrian Automotive Cluster

http://www.wk.or.at/fahrzeuge/                             Automotive Trade Association

Contact:

Marta Haustein, Commercial Specialist, Commercial Service, Vienna, Austria

Marta.Haustein@N0SPAM.mail.doc.gov

Drugs and Pharmaceuticals (DRG)

Overview

Drugs and Pharmaceuticals (DRG) Data Table (million $)

	2004	2005	2006 (est.)
Total Market Size	1,214.0	1,331.5	1,445.0
Total Domestic Production	1,690.4	1,798.5	1,896.6
Total Exports (from Austria)	3,416.4	3,564.9	3,687.1
Total Imports (into Austria)	2,940.0	3,097.9	3,235.5
Imports from the U.S.	356.2	398.0	438.0

2006 (base year) exchange rate: $1 = EUR 0.796

Note: The above statistics for 2006 are unofficial estimates.

Source: Pharming, Vienna

In 2005, Austrian production of pharmaceuticals grew 4 percent while imports grew three percent and exports grew approximately two percent. An estimated annual real growth rate of five to six percent of total market size over the next three years seems realistic. More than half of all pharmaceuticals approved for sale in Austria are imported. Only about 40 percent are produced domestically. The Austrian health-care system directly employs approximately 170,000 people. Another 180,000 are indirectly engaged in the industry.

Pharmaceuticals expenditure in Austria accounts for about 10 percent of total health care spending. Around 70 percent of health-care spending is publicly financed. International comparison shows that drug consumption in Austria is significantly below the European average with regard both to expenditures in Euros and to the number of packages sold. Annual per capita consumption amounts to 22 packages valued at approximately $250. Self-medication accounts for about 10 percent of the market, placing Austria in the lower third in a ranking with other European countries. Increased life expectancy and the growth in private health care insurance are expected to have a positive impact on the market.

European drug prices are 25 to 35 percent lower than U.S. prices. Europe spends 60 percent less per capita on pharmaceuticals than does the United States – a gap that has roughly doubled since 1992, when European governments spent about 30 percent less per capita than the United States.

Austrian pharmacy sales prices for pharmaceuticals are about the European average, whereas factory prices are below the European average. A major reason is the comparatively high value-added tax (VAT): compared to a six percent VAT charge in Belgium, and a 16 percent VAT charge in Germany (starting in 2007 it will rise to 19 percent), the Austrian VAT is 20 percent. There is no VAT taxation on pharmaceuticals in Sweden or the United Kingdom. While drug prices in Austria are slightly below the EU average, pharmaceutical products are cheaper in Greece, Spain, Portugal, France, and Belgium.

Access to the Austrian pharmaceutical market is subject to strict national and EU legislation.  The approving authority is the newly established “Austrian Federal Agency for Safety and Health Care” with its operational sub-unit “AGES Pharm Med.”  The authorization process consists of three different procedures:

• Centralized Procedure (EU): Authorization through this procedure is immediately valid in all EU member countries and is compulsory for certain medicines, including genetically engineered medicines.

• Mutual Recognition Procedure (EU): The requirement for authorization through this procedure is existing approval in another EU member country.  If the approval is already in place in one EU country, other EU countries can approve the drug using a simplified procedure.

• National Procedure: A drug approved through this procedure may be sold only in the approving country.

The Austrian pharmaceutical industry consists of subsidiaries of multinational companies and small and medium-sized Austrian firms. Both groups have enjoyed above average growth in sales in recent years. Market leaders are Novartis, Glaxo Smith Kline, Baxter, Aventis, Roche, Janssen & Cilag Pharma, and Merck, Sharp & Dohme.

Products from the U.S. enjoy an excellent reputation with respect to quality and safety. The Austrian market is very receptive to U.S. imports in this field. U.S. imports of drugs and pharmaceuticals rank second only to Germany in volume, and they are ahead of France, the United Kingdom, and Switzerland. The leading category of medications from the U.S. is that prescribed to treat cardiovascular illnesses. Medications from the U.S. for stomach and intestinal ailments, and those for psychotherapy, are also very important in the Austrian market.

Best Products/Services

Best prospects among American-made pharmaceuticals are: cancer medications; cardiovascular medications; AIDS medications; bio-technologically produced medications; and vitamin and mineral combinations such as Melatonin, DHEA, and St. John’s Wort. These are classified as pharmaceuticals in Austria, not as dietary supplements as they are in the U.S.

Opportunities

No information on special projects or opportunities is currently available.

Web Resources

• Statistics Austria
• Federal Ministry for Health and Women
• Austrian Institute for Health Management
• Association of the Austrian Social Insurance Funds
• Association of Pharmaceutical Enterprises
• Austrian Chamber of Pharmacists
• Association of the Austrian Chemical Industry
• FOPI – American Association of research-based American companies, including some associate members from other countries

Your contact person in this office is Manfred Weinschenk, Commercial Specialist

Health Care Equipment (MED)

Overview

Health Care Equipment (Med) Data Table (million $)

	2004	2005	2006 (est.)
Total Market Size	467.5	486.2	500.5
Total Domestic Production	256.0	265.0	271.4
Total Exports	778.9	814.3	841.9
Total Imports	990.4	1,035.5	1,071.0
Imports from the U.S.	198.7	209.9	219.2

2006 (base year) exchange rate: $1 = EUR 0.796

Note: The above statistics are unofficial estimates.

Source: Statistik Austria

U.S. manufacturers with state-of-the-art medical equipment have good opportunities in the Austrian market. They have maintained a respectable portion of the health care equipment market in recent years. The U.S. is the second-largest supplier, after Germany. Its share of the import market for medical equipment into Austria was 20.2 percent in 2005. U.S.-engineered medical equipment sales are actually much larger than the official import statistics would indicate. This is because many products imported into Austria from Western European and Far Eastern countries are assembled by subsidiaries of U.S. firms based in those countries. Austria is a transit-trade country with very successful connections to Central and Eastern European and Middle Eastern countries. The recorded level of total imports is actually greater than the total market, because of these factors. Given recent budget cuts in the Austrian health care system, an estimated annual real growth rate of 2 to 3 percent of total market size over the next three years seems realistic.

As of January 1, 2005, Austria had approximately 38,400 active physicians.  Of the total, 20,400 were employed by private or public hospitals or walk-in clinics, and 18,000 had independent private practices, of which 11,800 were medical specialists.  Austrian doctors have their own representative body in the form of the “Oesterreichische Aerztekammer” (Austrian Chamber of Medical Doctors), which is divided into nine provincial chambers.  Membership is compulsory.  The Chamber submits opinions on bills of law that affect doctors, represents doctors in negotiations (e.g. with the social health insurance boards), and administers the doctors’ own pension fund.

As of January 1, 2004, Austria had 272 public and private hospitals with an average of 68,000 beds, of which approximately 900 were for intensive care.  A total of 100 hospital departments are equipped with intensive care units.  Austria has 8.4 beds per 1,000 inhabitants – about the average for Western Europe.  It is anticipated that some additional public hospitals will be forced to shut down in the future, in order to reduce the extremely high costs of the Austrian healthcare system.

The Austrian Hospitals Act specifies two main types of hospital: general hospitals, and specialized hospitals providing medical care for acute cases, victims of accidents, or patients in certain age groups.  This latter category includes pediatric hospitals and the hospital departments in nursing homes.  General hospitals comprise 42 percent of the total.  The remaining 58 percent include specialized hospitals (30 percent), sanatoriums (11 percent), nursing institutions (9 percent), and convalescent and maternity homes (8 percent).

Best Products and Services

The best opportunities for new sales are for state-of-the-art equipment such as:

• Diagnostic imaging equipment, especially ultrasonic diagnostic equipment
• Patient monitoring systems including intensive care units
• Endoscopic instruments and equipment
• Dialysis equipment
• Pacemakers
• Implantable devices
• Highly sophisticated clinical laboratory equipment
• Nuclear medical instruments
• Clinical laboratory equipment
• Sophisticated surgical disposables

Opportunities

All major hospital projects planned for Vienna and the Austrian provinces have been completed.  With the expansion of the city of Vienna across the Danube river, a new tender was recently published for a hospital project called “Krankenhaus Nord”, for a total cost of USD 562 million. The hospital is expected to have 850 beds and should be completed by 2012.

In some hospitals, replacement of obsolete equipment is an ongoing process.  An increasing number of hospital projects in the Central and Eastern European countries of Hungary, Czech Republic, Slovakia, Romania, and Bulgaria are to be constructed by Austrian companies.  These projects will result in many opportunities for American companies to penetrate these markets as suppliers or subcontractors, or in partnership with Austrian firms active in the region.

Furthermore, some Austrian design and construction companies are involved in hospital projects in Middle Eastern and Asian countries, including Saudi Arabia, Kuwait, and Indonesia.

U.S.-manufactured medical products enjoy an excellent reputation in Austria for their state-of-the-art technology.  Only high-quality products will find good opportunities in the Austrian market. Quality, reliability, service, and timely delivery are crucial factors for selling in this market.  Availability of technical assistance and service support are essential if U.S. companies expect to succeed.

Resources

Web resources:

www.bmgf.gv.at                                                                                                               Bundesministerium fuer Gesundheit, Familien und Jugend (Federal Ministry for Health. Families and Youth)

www.sozialversicherung.at                                                                                                  Hauptverband der oesterreichischen Sozialversicherungstraeger (Association of Austrian Sick Funds)

www.oebig.at                                                                                                                    Oesterreichisches Bundesinstitut fuer Gesundheitswesen (Federal Institute for Health)

www.fgoe.org                                                                                                                                 Fonds “Gesundes Oesterreich” (Foundation “Healthy Austria”)                            

www.wko.at                                                                                                                            Wirtschaftskammer Oesterreich (Austrian Federal Economic Chamber)

www.aek.or.at                                                                                                                                           Oesterreichische Aerztekammer (Physicians Chamber)

www.ameso.at                                                                                                                            Austrian Medical Society

www.oegam.at                                                                                                                     Oesterreichische Gesellschaft fuer Allgemein- und Familienmedizin  (Member of World Organization of Family Doctors)

www.tuev.at/medizin                                                                                                                                 TUEV Oesterreich (test & certification institution)

www.medizinprodukte.at                                                                                             Oesterreichisches Medizinprodukte Handbuch – Goeschl Publishing House (Medical Products Handbook)

Contact:

Manfred Weinschenk, Commercial Specialist, Commercial Service, Vienna, Austria

Email: manfred.weinschenk@N0SPAM.mail.doc.gov

Aircraft and Parts (AIR)

Overview

Aircraft and Parts Data Table (million $)

	2004	2005	2006 (est.)
Total Market Size	253	298	313
Total Local Production	65	119	125
Total Exports (from Austria)	3,335	488	512
Total Imports (into Austria)	3,523	667	700
Imports from the U.S.	262	333	350

2006 exchange rate: $1 = EUR 0.796

Source: Statistics Austria

Note: The statistics for 2006 are unofficial estimates.

The Austrian market for civil aviation aircraft, parts and equipment totaled approximately  $298 million (EUR 237 million) in 2005 and is expected to grow by five percent in 2006. With domestic-based manufacturing limited to one company, Diamond Aircraft Industries, the vast majority of the market is served by imports.  In terms of market position, Germany represents 10.8 percent, the United States 49.9 percent, France 8.3 percent, and Canada 20.4 percent in 2005.

The prinicipal end-users of civil aviation aircraft, parts, and equipment are local charter airlines and the Austrian Airlines Group, which includes: Austrian Airlines, Lauda Air, and Austrian Arrows.  Emergency medical services and the police use civilian helicopters. The market for corporate fleets and business charter operators is expected to increase by about five percent by the end of 2006.

Diamond Aircraft Industries, located in Wiener Neustadt, manufactured a total of 136 single engine two-seat and four-seat propeller driven avgas aircraft (including the DA 42-TDI Twin Star, a four-seat twin engine diesel aircraft) in 2005, most of which were exported.  In 2006, 174 units will be rolled out in Wiener Neustadt.  About 95 percent of Diamond’s production is exported.

Best Products/Services

The best sales potential during the period 2006-2008 for U.S. aircraft and equipment is expected to be for satellite navigation systems and GPS, aircraft over 20 tons, aircraft between 5.7 and 14 tons, and aircraft engines.

Opportunities

No special projects or specific opportunities are available at the present time.

Resources

Web resources:

www.austrocontrol.at                                                                                                              Austrocontrol (Air Traffic Control Authority)

www.luftfahrt.or.at                                                                                                                       Federal Economic Chamber – Aviation Department

www.viennaairport.com                                                                                                                 Vienna International Airport

www.aci-europe.org                                                                                                                                     Airport Council International

www.bmvit.gv.at                                                                                                                                Civil Aviation Airport Authority, Federal Ministry of Transportation, Innovation and Technology

www.aua.com                                                                                                                                         Austrian Airlines Group

www.diamond-air.at                                                                                                                   Diamond Aircraft Industries

Contact:

Ingeborg Doblinger, Commercial Specialist, Commercial Service, Vienna, Austria

Email: ingeborg.doblinger@N0SPAM.mail.doc.gov

Franchising (FRA)

Overview

Franchising Data Table

	2003	2004	2006 (est.)
Total Number of Franchise Systems	330	370	460
Total Number of Franchise Operators	4,700	5,600	7,500
Total Number of Franchise Units	n/a	6,380	8,000
Austrian Systems	150	171	210
Foreign Systems	180	199	250
U.S. Systems	29	34	46

Source: Österreichischer Franchise-Verband.

Note: The Statistics for 2006 are unofficial estimates.

Franchising as a business model is still a relatively small factor in the Austrian economy, accounting for an estimated five percent of retail sales.  After a period of stagnation in the late 1990’s, Austria is experiencing respectable growth; the franchise association estimates yearly growth in the number of franchise systems at around 11 percent, and the number of new franchise unit owners to be growing at 16 percent annually.

Around half of the franchise businesses operating in this country are of local origin.  The top foreign participant in the Austrian franchising economy is Germany, with around 25 percent of franchises, followed by the United States, with about 10 percent of all franchises operating in Austria.  Most German franchisers either set up a headquarters in Austria or franchise directly over the border, whereas most American franchisers choose to expand their operations in Austria through a master franchise partner, a solution that has had mixed results.

The average cost to open a franchise is around $300,000, including fees and investment.  On average, the franchisee pays around 8.5 percent of earnings in fees.

Best Products/Services

• Service concepts
• Niche retail concepts

Opportunities

There is no specific information on current opportunities.

Resources

http://www.franchise.at                  Austrian Franchise Association

http://www.gruenderservice.net/   Franchise board, Federal Economic Chamber

Contact:

Marta Haustein, Commercial Specialist, Commercial Service, Vienna, Austria

Marta.Haustein@N0SPAM.mail.doc.gov

Computers and Peripherals (CPT)

Overview

Computers and Peripherals Data Table (million $)

	2004	2005	2006 (est.)
Total Market Size	2,234.7	2,688.3	2,855.0
Total Local Production	1,461.6	1,514.2	1,608.1
Total Exports	1,467.2	1,030.6	1,094.5
Total Imports	2,240.3	2,204.7	2,341.4
Imports from the U.S.	123.9	131.7	139.9

2006 (base year) exchange rate: $1 = EUR 0.796

Source: IDC Austria

Note: The statistics for 2006 are unofficial estimates.

The majority of Austrians use a PC at work.  These office PC users also use network and communications applications including e-mail, fax capabilities, the Internet and Intranet. Notebook computers have become more important, enabling traveling employees to maintain communications with the home office.  Users of office PCs tend to buy from a value-added reseller who offers a tailored “solution” to a particular data processing need.  Or they purchase their PC desktop or notebook computer online.

Server sales reached $307.6 million in 2005, PC desktop sales reached $526.1 million,  and PC notebooks sales amounted to $600.3 million and storage system sales were $222.4 million.  Peripheral sales totaled $647.8 million and networking equipment sales reached $346.6 million. Hardware accounted for 36.1 percent of the total IT market in 2005. For 2006 the highest growth rates have been forecasted for mid-sized systems (6.2 percent) and smart handheld devices (12.5 percent).  Peripheral sales will increase by approximately 15 percent in 2006.

The hardware life cycle may also inhibit the market. Hardware acquired between 1999 and 2001 is now being replaced. Often, the costs of acquiring hardware devour budgets earmarked for projects in the services and software area.

On the consumer side, the focus clearly shifted to notebooks, as lower prices continue to attract more and more individual users.  Consumer notebook sales recorded strong  growth in 2005.

Driven by aggressive pricing strategies and product positioning, the mobile PC market  including smart handheld devices remained very competitive, with all vendors aiming at gaining share in a market that still presents a potential for growth.  The adapting to 64-bit computing will slowly proceed.  While companies like Hewlett Packard move forward with the application development for 64-bit, it is expected that users will move to 32-bit alternatives with 64-bit expansion possibilities if these options are be available.  Full 64-bit use for commercial applications is expected for the second half of this decade. 

The United States is the main source of imports, followed by Germany.  Overall, sales for the entire computer hardware sector are expected to increase by 6.2 percent in 2006.

Best Products/Services

The best opportunities of sales for U.S. manufactured IT hardware products are disk storage systems, servers (32- and 64-bit), peripherals, networking equipment, smart handheld devices and notebooks with special features. 

Opportunities

No special projects or specific opportunities are available at the present time.

Resources

Web resources:

www.adv.at                                         ADV – EDP Association 

www.ocg.at                                         Austrian Computer Society

www.computer-buerosysteme.at        Vienna Chamber of Commerce – Dept. ICT

www.arcs.ac.at                                    Austrian Research Center Seibersdorf

www.viw.at                                          Informaton Industry Association

Contact:

Ingeborg Doblinger, Commercial Specialist, Commercial Service, Vienna, Austria

Email: ingeborg.doblinger@N0SPAM.mail.doc.gov

Telecommunications Equipment (TEL)

Overview

Telecommunications Data Table ($ millions)

	2004	2005	2006 (est.)
Total Market Size	1,272.4	1,389.3	1,424.1
Total Local Production	1,758.5	1,862.9	1,909.5
Total Exports (from Austria)	1,005.8	977.7	1,002.1
Total Imports (into Austria)	519.7	504.1	516.7
Imports from the U.S.	41.1	35.7	36.6

2006 (base year) exchange rate: $1 = EUR 0.796

Source: FEEI, Statistic Austria and IDC Austria

Note: The above statistics are unofficial estimates.

The Austrian telecommunications equipment market in Austria is open, well developed, and highly competitive.  Major worldwide telecom equipment suppliers such as Siemens, Motorola, Ericsson, Nokia, Alcatel, Philips, and Cisco Systems have dominant positions.

The market totaled $1.4 billion in 2005, an increase of about 9.2 percent over 2004.  The fastest growing sector in the last few years was the end-user equipment market, which was led by growth in sales of mobile telephone sets.

Manufacturers of communications equipment were able to boost the value of total production by 3.4 percent in 2005.  Lively increases in production in recent years have derived from strong investment in wireless communications, and this continued in 2005.  Investment activity by fixed network operators, on the other hand, was modest.  Exports by Austrian producers to the EU once again increased, as did exports to Eastern Europe.  Given the demand for additional development of infrastructure (for broadband communications, for example), the sector anticipates continuing increases in investment.

The Austrian market for enterprise infrastructure and network access equipment is expected to increase to $373.0 million in 2006, from $350.2 million in 2005, an increase of six percent.

Sales of broadband equipment amounted to $38.4 million in 2005.  A total of 1 million broadband households were registered in 2005, which is expected to increase by approximately 20 percent in 2006.

Best Products/Services

Growth segments over the next two years will be enterprise converged voice equipment, dedicated content equipment, and wireless LAN equipment.  With the expansion of the broadband sector, investment in network infrastructure will be needed.  Best prospects in this area are optical fiber, power line, radio networks (W-LAN), and cable television networks (CATV).

Opportunities

No information on special projects or opportunities is currently available.

Resources

Web resources:

http://www.feei.at                                                                                                                              The Association of the Austrian Electrical and Electronics Industry (FEEI)

http://www.idc.com/austria                                                                                                                   IDC Austria

www.statistik.at                                                                                                                           Statistik Austria  

Contact:

Ingeborg Doblinger, Commercial Specialist, Commercial Service, Vienna, Austria

Email: ingeborg.doblinger@N0SPAM.mail.doc.gov