The German car manufacturers rate their business prospects more negatively than they have since the global financial crisis in 2008. The corresponding indicator collapsed to minus 56.9 points in June, after minus 10.3 points in May, as the Munich Ifo Institute announced on Wednesday. This is the fifth decline in a row.
On the other hand, the car manufacturers rate the current business situation better: the barometer rose to 37.5 points after it had been 28.4 points in May. “There is great uncertainty among the car manufacturers, as at the beginning of the war in Ukraine or when the risk of gas rationing for industry increased significantly in the fall,” said Oliver Falck, head of the Ifo Center for Industrial Economics and New Technologies.
Automakers are planning higher prices
Regardless of the bleak prospects, car manufacturers are planning to push through higher prices. The corresponding indicator rose to 38.7 points after 25.6 points in May. “The price increases would primarily affect the premium segment and electric cars,” said Ifo expert Falck.
The suppliers rated their current business situation worse. The reading fell to 32.6 points from 41.3 in May. “There is a lack of demand from abroad among the suppliers,” said Falck. There is also a lack of confidence for the coming months: the barometer for business expectations fell to minus 32.1 points after minus 20.3 in May.
The German automotive industry has recently been more optimistic due to the improved supply of parts and high order backlog. For Germany we are now assuming growth this year of four percent to 2.8 million passenger cars, as the German Association of the Automotive Industry (VDA) forecast in May.
The association had previously assumed growth of only two percent. For Europe, the VDA expects market growth of seven percent to twelve million vehicles in 2023, following the previously forecast plus five percent. However, the market is still almost a quarter below the level before the Corona crisis in 2019.