Car industry out of the crisis? Huge difference between current situation and outlook

Zu viel auf Halde produziert in der Autoindustrie?

Will the car industry get out of the corona crisis this year? Is production rising, are the warehouses emptying, and above all: do consumers really want to buy, even with reduced VAT? That is probably the most important question! Almost 7 million short-time workers, plus an army of self-employed people who are faced with nothing. Who of them is going to buy new cars, no matter how much they are discounted?

Car industry with light and shadow

In the automotive industry, at least, there is currently a huge difference between the current situation and expectations of how business will develop. The ifo Institute today published current survey data from the automotive industry. According to the ifo, the German automotive industry hopes to slowly start to recover in the coming months. Business expectations in the industry have turned clearly positive for the first time in seven months. The expectation indicator rose to plus 27.7 points in June after minus 11.9 in May.

However, the automotive industry is still very pessimistic about the current business situation. The index rose only slightly in June to minus 81.8 points from minus 85.6 in May. In April 2009 the index stood at minus 82.9 points. And also for the employees in the car production industry the outlook remains gloomy! For them the situation has even deteriorated further. According to ifo, the indicator for personnel planning fell to minus 54.4 points in June after minus 50.5 in May. During the financial crisis it was minus 50 points in April 2009.

Here are further statements from the survey in the wording:

Demand, on the other hand, rose sharply to plus 52.2 points in June after minus 80.6 in May. This is the largest measured improvement over the previous month since 1991. The order backlog is also assessed positively for the first time in 13 months. In June the indicator rose to plus 15.2 points after minus 65.7 in May. Production expectations rose for the second time in a row. The indicator rose to plus 50.0 points in June after plus 23.5 points in May. More companies want to expand their currently low production again. Business abroad seems to be recovering only cautiously. Thus, the indicator of export expectations rose for the first time in 17 months in June, reaching 16.8 points after minus 8.7 in May. Companies continue to consider their inventories of finished goods to be too large. The indicator remained stable at plus 41.6 points in June after 42.1 in May.

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