Sentiment in the German car industry continues to deteriorate

The mood in the German car industry is on a downward spiral. In November, the industry index compiled by the Munich-based Ifo Institute deteriorated by a further 3.5 points.

At minus 32.1, the index is now at its worst level since the height of the coronavirus pandemic. The main reason for this is weak demand, as expert Anita Wölfl explains.

"The mountain of orders that companies in the automotive industry had piled up since the start of 2021 due to the pandemic and supply chain problems has been cleared," she says. New orders are coming in, but are not enough to fill capacity.

But that's not all: "The industry is stuck in the current mix of far-reaching transformation, intense competition and a weak economy," says Wölfl. And that has consequences for the labor market. "Many companies in the automotive industry are holding back on hiring new staff or are discussing job cuts," explains the expert.

However, there is also one area in which there is a surprisingly clear improvement. The export expectations indicator has risen by 12.1 points. However, at minus 19.2, it is still clearly in negative territory.

A negative Trump effect cannot currently be seen, according to Ifo. "Companies are still waiting to see how trade policy will develop," says Wölfl. In addition, the dollar has risen sharply since the election, from which exporters can benefit.

SDA