Sentiment in the German Automotive Cooling Down

The business climate in Germany’s automotive industry deteriorated in May. This indicator dropped to -8.6 points, down from -2.4 points* in April. “Backlash from China to the trade conflict over electric cars with the US and Europe could severely impact business for German automotive manufacturers,” says Oliver Falck, Director of the ifo Center for Industrial Organization and New Technologies.

The indicator for the business situation slipped into negative territory for the first time since October 2022. Manufacturers and their suppliers remain pessimistic for the coming months. The indicator for the earnings situation fell to -17.8 points, down from -2.0 in September. To cut costs, companies in the automotive industry are planning to get by with fewer staff. The corresponding barometer slipped from -14.7 in April to -20.2 points.

*Seasonally adjusted