Business situation in German auto industry deteriorates sharply (ifo-Xinhua)

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Vehicles are seen at a BMW car dealership in Berlin, capital of Germany, May 7, 2020. (Photo by Binh Truong/Xinhua)

Although industry expectations improved by minus 4 points to zero, the general business climate index fell below zero for the first time since April, according to the ifo business survey.

BERLIN, Sept. 2 (Xinhua) — The business situation of the German automotive industry deteriorated sharply in August, with the corresponding indicator dropping from 7.5 points in July to minus 10 points the following month, the German auto industry said on Friday. ifo institute.

Although industry expectations improved by minus 4 points to zero, the general business climate index fell below zero for the first time since April, according to the ifo business survey.

“The general darkening of the mood in the economy is also reflected in the automotive sector,” said Oliver Falck of the ifo institute. The situation is even worse for suppliers, he added, who are “much more pessimistic than manufacturers”.

Vehicles are seen at a Volkswagen car dealership in Berlin, capital of Germany, May 7, 2020. (Photo by Binh Truong/Xinhua)

Despite “global headwinds and supply chain issues”, Germany’s biggest carmaker, Volkswagen, increased its second-quarter revenue by 3.3% year-on-year to 69.5 billion euros ($69.3 billion).

Volkswagen was able to make “significant investments in future profit pools”, said Volkswagen chief financial officer Arno Antlitz, noting that the company had made significant progress in developing its battery and mobility services, and its software platforms.

On Thursday, the German Automotive Industry Association (VDA) adjusted its 2022 forecast for global markets and now expects 9% growth in China. On the other hand, the forecasts for Germany, Europe and the United States have been revised downwards.

An entrance sign for vehicles is seen at a BMW car dealership in Berlin, capital of Germany, May 7, 2020. (Photo by Binh Truong/Xinhua)

China’s passenger car market is “recovering with great momentum” from the COVID-19 measures introduced in the spring, VDA said. However, expectations for the US and Europe were dampened by high inflation and rising interest rates.

After falling for two months, inflation in Europe’s largest economy hit a record high of 7.9% again in August, according to preliminary figures from the Federal Statistical Office (Destatis).

A man fills his car’s fuel tank at a gas station near Paris, France, Aug. 18, 2022. (Xinhua/Gao Jing)

“The auto market is in dire straits. Inflation has spread to the auto market and we also expect significant price increases in the coming months,” said an analysis released Friday by the CAR Center Automotive Research, a private sector research institute. with a focus on issues related to mobility.

“High energy prices and the looming recession are making new car buyers more reluctant to buy. In addition, borrowing costs for vehicle financing are to be expected to rise in the coming months. to come,” warned Ferdinand Dudenhoeffer, director of the institute. (1 euro = 1 US dollar)

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