Situation Much Better for German Automakers

The current business situation for German automotive manufacturers has improved significantly, according to the ifo Business Survey. In June, the indicator climbed to 37.5 points, up from 28.4 points* in May. Expectations, however, fell to -56.9 points, down from -10.3 points* in May. “Automakers are experiencing great uncertainty, comparable to the early days of the war in Ukraine or to when the risk of gas rationing in manufacturing shot up last fall,” says Oliver Falck, Director of the ifo Center for Industrial Organization and New Technologies.

Expectations fell for the fifth month in a row. The last time they were worse was during the 2008 financial crisis, when the indicator dropped to -67.8 points*. Nevertheless, automakers are planning to raise prices again. “These price increases will mainly affect the premium segment and electric vehicles,” Falck suspects. The indicator climbed to 38.7 points, up from 25.6 points* in May.

Automotive suppliers rated their current business situation as poorer. That indicator dipped to 32.6 points, down from 41.3 points* in May. “Suppliers are suffering from a lack of demand from abroad,” Falck says. Confidence regarding the months ahead is also in short supply. Business expectations slipped to -32.1 points, down from -20.3 points in May.

*Seasonally adjusted