The mood in the executive suites of the Germans Automotive industry deteriorated significantly in July. The corresponding indicator for the business climate in this important industry fell to minus 18.3 points, after minus 9.5 points in June, as the Munich Ifo Institute announced on Monday in its manager survey. “The auto industry is sliding further into crisis,” said Anita Wölfl from the Ifo Center for Industrial Economics and New Technologies.
The worsening mood is based on both the assessment of the current business situation and the expectations for the next six months. The current situation indicator fell by ten points, from plus 3.2 to minus 6.8 in July. The barometer for the outlook fell to minus 29.1 points, after minus 21.3 points in June. “A significant improvement is probably not expected in the next few months,” said Wölfl.
Almost half of the companies are missing orders
Capacity utilization also fell to 77.7 percent. It is therefore 9 percentage points below the long-term average. 43.1 percent of companies complain about a lack of orders, compared to 29.2 percent in April. Positive impulses are not expected from abroad either: export expectations have fallen to minus 16.8 points. That is more than 13 points less than in the previous month.
The German auto industry is particularly concerned about the weakness in its most important sales market China to accomplish. The Munich group BMW sold around 4 percent fewer cars in the People’s Republic in the first half of the year, but did even better than its competitors Volkswagen. The VW Group must significantly reduce costs in order to achieve its goals is therefore pursuing strict austerity measures. From the third quarter onwards, the economy in China can be expected to stabilize. BMW recently explained when presenting its balance sheet.