“Moods in the German automotive sector deteriorate under the influence of duties,” says Reuters. The agency points to the report of the IFO Institute, which he showed decrease in the business climate index for this sector to -31.8 points from -30.7 in April.
“The confusion related to the American duties causes problems for the automotive industry in Germany,” said Anita Woelfl, a sector specialist at the IFO Institute.
Reuters writes that German car manufacturers Volkswagen, BMW and Mercedes-Benz already struggling with poor demand in Europe and sharp competition from abroad. They conduct talks with the American administration on an agreement aimed at alleviating the effects of import duties.
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The IFO study showed that the overall assessment of the current situation by German enterprises improved slightly in May, but remained at a low level of -35.3 points. On the other hand, business expectations dropped to -28.3 from -25.2 points in April.
Recently, Volkswagen announced the liquidation of 35,000 jobs until 2030. In March, the company also announced a 30 % decrease in net profits on an annual basis, explaining this with high production costs and weaker sales in China.
When asked about the errors of the German automotive industry, Blume admitted that the companies “were on laurels for too long” and “too late they saw how quickly and dynamically the world changed”. The VW group includes brands such as Volkswagen, Audi, SEAT, Skoda, Bentley, Porsche, MAN and Scania.
According to the German Association of Automotive Industry, the United States is currently the most important foreign market for the German automotive industry. At the beginning of April, US President Donald Trump introduced additional duties in the amount of 25 percent. for imported cars. The decision to impose duties on other EU products was then postponed until the beginning of July.
