Ifo Business Survey: Turbulent Times Ahead for German Automotive Industry

Brussels – The situation in the German automotive industry remains difficult. This is the result of the latest Business Survey conducted by the ifo Institute shortly before the IAA International Motor Show in Frankfurt. Industry expectations for the coming months darkened from −10.2 points to −14.1 points in August. “The light at the end of the tunnel is still dim at the moment,” ifo researcher Klaus Wohlrabe says, adding: “although the current situation improved slightly in August, many indicators still point to a decline.”

The situation in the industry improved from −2.1 to +4.3. After all, the stocks of finished cars were cleared considerably in the summer, with the figure falling from 29.3 to 10.9. And with the new model year starting in August, the production plans rose from −11.2 to +8.7. But the order backlog is still −7.7 (previous month: −28.2) and export expectations reached −13.0 after −21.1 in the previous month.

Employees in the industry face uncertainty. Employment expectations improved from −27.5 in July to −16.5 in August; only in June, expectations of short-time work had risen from 14.7 to 21.8. At the same time, 68.8 percent of companies still worked overtime in June; in summer 2018, however, the figure had been 84.8 percent.