German Automotive Industry Sees Fewer Orders

German automakers and their suppliers view their current business situation as worse than in the previous month, according to the ifo Business Survey. The indicator fell to 23.6 points in July, down from 27.1* points in June. “Orders are currently slow for automakers and their suppliers,” says Anita Wölfl, a specialist at the ifo Center for Industrial Organization and New Technologies. “In light of persistent uncertainty in the global markets, the automotive industry’s expectations for the coming months also remain at a low level.”

Automakers are remarkably cautious in their assessment of their order backlog. The indicator plummeted from 56.5* points in June to 19.5 points in July. This is the lowest level since January 2021. “However, it’s not all that surprising to see a decline in the assessment of the order situation, since the industry began 2023 with an order backlog that is now being reduced thanks to improved supply chains,” Wölfl says.

Sentiment among suppliers within the industry has also darkened: they assess both their current business situation and their expectations for the coming months as worse. The indicator for the current business situation dropped slightly to 28.7 points, down from 30.6* points in June; the expectations indicator fell from minus 31.8* points to minus 41.7 points.

*Seasonally adjusted