Germany is centrally situated in Europe, has access to the sea, and has great river connections. Germany can service markets across Europe from its central location.
Being the largest economy of Europe, Germany is one of the wealthiest European countries. It is a highly industrialized nation and has one of the best service sectors. It is home to many of the famous global car brands. Few names include Volkswagen, Daimler, Mercedes-Benz, BMW and Audi.
Germany has access to both iron and coal which means it can make steel and generate power without having to import anything. The coal/steel complex centered on the Alscace/Lorraine area is the proximate cause of friction between France and Germany, and placing that region’s resources into the European Coal and Steel Community laid the foundation for the European Union and also helped keep both country’s economies steady after WWII.
The Germans have a fairly homogeneous culture (barring a lot of immigrants from Turkey in the post-war era). That culture stresses values of hard work, thrift, education, and collective action – a perfect storm for creating successful companies and industries.
The Germans came out of WWII with a destroyed infrastructure but a lot of smart people. With the help of the Marshall Plan they were able to rebuild the infrastructure and the smart people worked with great diligence to restore their material wealth. Germany had a pre-war reputation for making high quality goods and German companies traded on that reputation in the post-War era; making things like cars, industrial equipment, chemicals, cameras, etc.
Germany is the world’s second-largest manufacturer. They also have had had a very stable goverment (first in West Germany, now in re-unified Germany) – since 1982 they’ve had a total of three Chancellors. Their laws/regulations have been business friendly. The combination of those factors meant that their currency (first the Deutsche Mark in the 80s and 90s, and then the Euro after that) was always in demand because people wanted to invest there. As the currency becomes more desirable, it becomes more expensive for other countries to buy it. Since Germany manufactures so much, it winds up exporting a lot of its’ goods. Since the currency is now rising, the customers in the rest of the world have to pay more to get the same goods, which gives the German companies more money. As they get more money, they produce more, looks more desirable, etc – and the cycle repeats over and over.
Germany has a few key ingrediences for success:
a) High education levels, especially in technical and scientific areas. b) Germany had to be rebuilt several times in the last century: After WW1 and WW2, and after its reunion. A lot of things were rebuilt in state-of-the-art technology. c) High dedication of the people – Germans don’t just go on strike for fun, they just suffer in silence. d) Political stability to a level that could be described as intertia, but almost no mindless blocking of political decisions (as in the US). e) Germany is no longer aiming at ruling the world. There are a lot of resources wasted worldwide in such plots.