German automakers' expectations are at their worst since the 2008 financial crisis because of inflationary pressures, weak economic growth in Europe and punishing competition from Tesla as well as Chinese automakers, a new survey found.
The future view by automakers including Volkswagen, Mercedes-Benz and BMW deteriorated for a fifth month in June to minus 56.9 points, a slump from minus 10.3 points the month before, according to a survey by the Munich-based Ifo Institute published on Wednesday. Tha is not far off 2008’s low of minus 67.8.
The darkening expectations follow a surge in global interest rates and a growing number of corporate profit warnings, denting optimism of a soft economic landing.
Some German industrials, notably the chemical maker Lanxess, have cut or withdrawn outlooks in recent weeks because of softer demand, with more companies due to report financials and detail their view of the year in coming weeks.
“Automakers are experiencing great uncertainty, comparable to the early days of the war in Ukraine,” said Oliver Falck, head of the Ifo Center for Industrial Organization and New Technologies. To compensate, automakers plan to raise prices, particularly for premium and electric vehicle models, he said.
Germany’s automotive industry is ramping up production of EVs, but has struggled to keep pace with competitors. VW in particular has come under pressure in China, its biggest market, by Tesla and local EV makers such as BYD, which outsold VW brand for the first time earlier this year.
The poor future outlook contrasts with automakers’ appraisal of their current situation, which improved significantly since May to 37.5 points on the indicator from 28.4, Ifo said.
