The ifo business climate index for the German auto industry fell to minus 35.0 points in September, down from minus 22.0 in August. Order books and profit margins also weakened further.
The ifo business climate index for the German automotive industry fell to minus 35.0 points in September, down from minus 22.0 points in August. That is below the previous low reached in June and July this year. Companies rated their current business situation markedly worse than a month earlier. Order books were also judged weaker again, and profit margins, which are surveyed quarterly, dropped sharply in the third quarter compared with the previous one.
Export and hiring expectations had briefly improved in August but fell back again in September. ifo industry expert Anita Woelfl describes the sector as still stuck in crisis. For suppliers and manufacturers this points to continued pressure on investment and staffing decisions, as several indicators are weakening at the same time.
It remains unclear whether the drop reflects a short-term reaction to specific events or the start of a longer downturn. Executives in the sector should watch order intake over the coming months closely before revising investment plans.
What this means for decision-makers
- Review supplier investment plans given the weak business situation in carmaking.
- Track order books over the next months to rule out a one-off reading.
- Plan staffing decisions cautiously, since hiring expectations have also collapsed.
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