German Automotive Industry Optimistic That Business Will Improve
Business for German automakers and their suppliers is fairly average to poor. The industry’s assessment of the current situation rose only slightly from minus 8.5 points in December to minus 7.5 points in January. This is a finding from the ifo Institute’s latest survey. Expectations rose marginally from 11.2 points in December to 11.6 points. “Automakers are cautiously optimistic that demand will pick up again when the lockdown ends. That’s another reason they’re currently replenishing their stocks,” says Klaus Wohlrabe, Head of Surveys at ifo.
Production, having recently contracted slightly, will remain largely constant in the coming three months. As things stand, companies do not expect any further impetus from the export business. Jobs will continue to be cut in the industry, which explains why this indicator rose only slightly to minus 33.0 points.
Although the second lockdown has considerably curtailed demand, order books still grew, with the indicator rising to 13.0 points from 7.2 points in December. The stock of finished goods is slightly above average for the season; this indicator rose markedly from minus 5.2 points in December to plus 6.6 points.
This month, companies were asked why they limited their production: only 16 percent responded that they had too few orders. This figure was still 26 percent in January 2020 and 61 percent last April. Capacity utilization is at 84 percent. At the time of the first lockdown in April 2020, utilization had fallen to 46 percent.
