Situation for German Automakers Slightly Improved
The business situation for German automakers improved somewhat in June, with the indicator rising to 23.6 points, up from 17.8 points in May. “Automotive manufacturers continue to command high sales prices,” says Oliver Falck, Director of the ifo Center for Industrial Organization and New Technologies. The indicator for price expectations remained high at 74.7 points, down from 80.5 points in May.
Manufacturers rated their order backlog significantly better, with orders growing somewhat compared to the previous month. “Automakers hope to expand production in the coming months,” Falck says. Their production expectations rose to 56.2 points, up from 45.6 points in May. They also want to hire new staff. However, car manufacturers were not very optimistic about their overall prospects: their expectations plummeted to 9.8 points, down from 41.3 points in May. “The European Parliament has voted to ban internal combustion vehicles in Europe as of 2035. Ford has decided to stop production at its Saarlouis site and will manufacture electric cars in Valencia, and there continues to be a serious shortage of key intermediate products. All of this is dragging down expectations,” Falck says.
The business situation among automotive suppliers remained tense in June, with the indicator sliding from 8.1 points in May to 2.5 points. The same is true for their business expectations, which plunged to minus 33.1 points, down from minus 19.0 points in May. They reported a reduced order backlog and expect to cut back on production.
