Situation in the German Automotive Industry Much Worse
Sentiment among German automotive manufacturers and their suppliers cooled noticeably in September, with the corresponding ifo indicator plummeting from 32.0 points to 13.2 points. In July, the figure had stood at 52.9 points. “The latest figures show that the automotive industry is the industry most seriously affected by supply bottlenecks for intermediate products,” says Oliver Falck, Director of the ifo Center for Industrial Organization and New Technologies.
The only positive impetus is coming from abroad: export expectations have improved significantly, with the indicator rising from 17.0 points in August to 34.5 points. This may be having a positive impact on production expectations, which rose from 35.4 points to 37.4 points. “However, this shouldn’t hide the fact that the uncertainty of many consumers in China, due to the crisis of the real estate developer Evergrande, is weighing on the mood of German carmakers, who now produce more cars in China than in Germany,” Falck says.
The situation in Germany remains critical: order books fell from 17.1 points in August to 5.3 points. In July, the order backlog was still rated at a healthy 52.5 points. Demand is down for the first time since May 2020: the figure fell from 1.7 points to minus 15.7 points. Along the supply chain, companies rated the stock of finished goods as too large.
