Germany’s carmakers are becoming more pessimistic about their business as consumers shy away from purchases, according to the latest survey by the Ifo Institute.
(Bloomberg) — Germany’s carmakers are becoming more pessimistic about their business as consumers shy away from purchases, according to the latest survey by the Ifo Institute.
Companies including Volkswagen AG and Bayerische Motoren Werke AG judge their situation to have worsened in February, and their expectations have also dimmed compared with the previous month amid faltering demand for their products. While auto suppliers were more confident about their current situation, they too were less optimistic about their business prospects.
The indicator for the industry fell to plus 6 points from plus 12.5 points in January, according to the findings published on Friday. Manufacturers’ business expectations fell to plus 2.8 points from a seasonally adjusted plus 21.4 points.
“Manufacturers in particular assess their current situation as drastically worse than in the previous month,” said Oliver Falck, the head of the Ifo Center for Industrial Organization and New Technologies.
Consumer anxiety about the development of electricity prices as well as debate about a potential rationing power for recharging car batteries could explain the subdued buyer demand, Falck said. As a result, fewer manufacturers and suppliers are planning on expanding production in the near-term.
Read More: EMEA Earnings Week Ahead: Inflation Angst Grips Germany Inc.
European auto sales rose in January for the sixth month in a row on the back of easing supply issues, according to the most recent data from the European Automobile Manufacturers’ Association. At the same time, it projected deliveries of just 10.95 million in 2023, well short of the 14.3 million vehicles delivered in 2019.
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