Where is the German auto industry headed?

In recent years, the German automotive industry has gone from being a model industry to a problem child. Last year, more than 10 percent fewer cars were produced in Germany than before the coronavirus pandemic; in response, both major manufacturers and suppliers have announced significant job cuts. In this respect, the situation has deteriorated further compared to spring 2024, when we last addressed the problems facing the automotive industry (see here).

Signs of hope for the economy

However, since the beginning of the year, the mood among auto companies has brightened somewhat, as it has across manufacturing as a whole. Unlike last year, when business expectations had temporarily improved, the Ifo survey's assessment of the current situation is now no longer quite as unfavorable as it was in the spring.

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