ifo Institute: Situation in the German Automotive Industry Deteriorates Dramatically

The business situation in Germany’s automotive sector has gotten dramatically worse. This is the result of the most recent ifo Business Climate survey. According to the survey, the index for current business in April plummeted to minus 85.4 points from minus 13.2 points in March. This represents the biggest drop and the lowest value since recording of these figures began following Germany’s reunification. During the financial crisis, this index fell to minus 82.9 points in April 2009.

“Never before have we seen such poor figures for this key industry,” says Klaus Wohlrabe, Head of Surveys at ifo. Order books continued to shrink. Here, the index was down to minus 76.7 points from minus 10.1 points in March. Meanwhile, inventory levels shot up: the index rose to plus 40.5 points from plus 14.6 points in March. Capacity utilization took a nosedive to 45 percent, again marking the lowest level since German reunification.

The index for production expectations fell to minus 44.2 points from minus 36.2 points in March. Export expectations in April sank to minus 64.9 points from minus 43.9 points in March. Business expectations for the coming months became even bleaker, with the index slipping to minus 45.7 points in April from minus 34.6 points in March.