BERLIN, Sept. 2 (Xinhua) -- The business situation in the German automotive industry deteriorated sharply in August, with the corresponding indicator falling from 7.5 points in July to minus 10 points the following month, the ifo Institute said on Friday.
Although industry expectations improved from minus 4 points to zero, the index for overall business climate fell below zero for the first time since April, according to the ifo company survey.
"The general darkening of mood in the economy is also reflected in the automotive sector," said Oliver Falck from the ifo Institute. The situation is even worse for suppliers, he added, who are "much more pessimistic than manufacturers."
Despite "global headwinds and supply chain issues," Germany's largest car maker Volkswagen increased its sales revenues in the second quarter by 3.3 percent year-on-year to 69.5 billion euros (69.3 billion U.S. dollars).
Volkswagen was able to make "important investments in future profit pools," said Arno Antlitz, Volkswagen's CFO, stressing that the company had significantly advanced the development of its battery and mobility services, and software platforms.
On Thursday, the German Association of the Automotive Industry (VDA) adjusted its 2022 forecasts for global markets, and now expects growth of 9 percent in China. On the other hand, forecasts for Germany, Europe, and the United States were lowered.
The Chinese passenger car market is "recovering with great momentum" from the COVID-19 measures introduced in spring, VDA said. However, expectations for the United States 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 percent again in August, according to preliminary figures by the Federal Statistical Office (Destatis).
"The automotive market is in a critical situation. Inflation has spread to the automotive market and we expect significant price increases in the coming months as well," said an analysis published on Friday by the CAR Center Automotive Research, a private-sector research institute with a focus on questions relating to mobility.
"High energy prices and the emerging recession are making new car buyers more reluctant to buy. In addition, rising borrowing costs for vehicle financing must be expected in the coming months," warned Ferdinand Dudenhoeffer, Director of the institute. (1 euro = 1 U.S. dollar) ■
