Sentiment within Germany’s automotive industry experienced a notable improvement for the second consecutive month in August, according to recent data from the Munich-based Ifo Institute The institute’s business climate index for the sector rose to -155 points, up from -230 points in July However, the index remains firmly in negative territory
Ifo industry expert Anita Wölfl noted a juxtaposition of positive developments in electric mobility and ongoing challenges in trade relations with the United States
German automotive companies, in particular, reported a significant improvement in their current business assessment The corresponding indicator increased to -169 points in August, from -268 points the previous month Demand for electric vehicles reached new highs in the first half of 2025, a trend that appears to be continuing, with companies expressing greater satisfaction with their order backlogs compared to the previous month, although those backlogs remain in negative territory
Overall, the industry views the coming months with reduced pessimism Business expectations rose to -141 points in August, up from -192 points in July Contributing to this cautiously optimistic outlook is a substantial increase in orders from the Eurozone during the first half of 2025, which now account for nearly a third of all German automotive exports This positive development is tempered, however, by the agreement reached in the trade dispute with the United States at the end of July
“Given the importance of the US market for German car manufacturers and suppliers, the negotiated tariffs of 15 percent remain painful” Wölfl explained This is reflected in export expectations, which declined slightly in August to -88 points, compared to -51 points in the previous month