Ifo industry barometer: car manufacturers want to ramp up production

Dhe mood in the executive floors of German car manufacturers and their suppliers brightened in November. The barometer for the current business situation climbed to minus 2.2 points from minus 4.3 in October, like the one in Munich Ifo Institute announced on Monday about its company survey.

The prospects for the coming months are also assessed less pessimistically: this barometer rose sharply to minus 13.3 points after minus 35.3 in October. “The risk of a gas shortage in winter and thus a deep recession has decreased,” said Oliver Falck, head of the Ifo Center for Industrial Economics and New Technologies. That makes the German auto industry more confident.

Sentiment improved, particularly among manufacturers. Here the expectations rose to minus 2.8 points, after minus 30.6. The business situation also improved to plus 8.2 points after plus 2.6 before. “Automakers are already planning to increase production,” said Falck. The corresponding indicator for the next three months rose to plus 76.4 points. In November, however, the car manufacturers had reduced their production and thus adjusted to the fall in demand. The suppliers also no longer assess their business situation quite so bleakly. However, expectations increased only slightly and remained clearly in negative territory.

Shortages of semiconductors and other parts have slowed auto production this year. However, the situation has improved in recent months, which is why the car manufacturers can now work off their backlog of orders. After a slight decline in the German car market this year, the Association of Car Importers VDIK expects a recovery in 2023. “We expect 2.75 million new cars for 2023. That corresponds to growth of six percent,” explained VDIK President Reinhard Zirpel on Friday in Frankfurt. According to estimates by the VDIK, new registrations in Germany will fall by one percent to 2.6 million this year.

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