The mood in Germany’s automotive industry has hit a new low at the start of the year. The index for the business climate in the German automotive sector, measured by the Munich-based Ifo Institute, sank to -40.7 points in January, down from -35.0 points in December.
“The automotive industry is stuck in a crisis. Above all, it sees its competitive position in serious danger” said Ifo sector expert Anita Wölfl. The business climate was driven down by both the current business situation and expectations. The situation was evaluated as significantly worse, with -39.1 points, compared to the previous month’s -32.6 points. Expectations fell to -42.3, from -37.3.
The industry is particularly concerned about its competitiveness: its position on foreign markets was evaluated as low as never before, both outside and within the EU. Even on the German market, they have lost significant ground. “The strong competition from China, Trump’s threats and soon to be imposed tariffs on US imports from the EU, as well as the burdens within the country, are putting significant pressure on the German automotive industry” Wölfl said.