Situation for German carmakers improves slightly: ifo Institute-Xinhua

Situation for German carmakers improves slightly: ifo Institute

Source: Xinhua| 2022-07-05 23:59:00|Editor: huaxia

BERLIN, July 5 (Xinhua) -- The business situation for German carmakers improved slightly in June, with the corresponding indicator rising by 5.8 points compared to the previous month to 23.6 points, the Munich-based ifo Institute for Economic Research said on Tuesday.

"Automakers hope to expand production in the coming months," said Oliver Falck, director of the ifo Center for Industrial Organization and New Technologies.

Orders also rose slightly compared to the previous month as German carmakers continued to experience high order backlogs, according to the institute.

The market is "still not driving in normal mode," Reinhard Zirpel, president of the Association of International Motor Vehicle Manufacturers (VDIK), said on Tuesday.

According to the Federal Motor Transport Authority (KBA), the number of new passenger car registrations in Germany between January and June was down 11 percent year-on-year to around 1.24 million.

Passenger car sales in Germany in the first half of 2022 were only 28,000 units above the already very low level of the first half of 2020, which had been dominated by the COVID-19 pandemic and resulting lockdowns, according to the VDIK.

Car manufacturers in Germany are becoming less optimistic about the future, according to the ifo Institute. Their expectations plummeted from 41.3 points in May to only 9.8 points in June.

"There continues to be a serious shortage of key intermediate products," Falck said. These developments are "dragging down expectations."

Europe's car industry is looking at a major transformation. From 2035 onwards, the sale of new vehicles with internal combustion engines will be banned in Europe, making electric cars and fuel cell vehicles the only option.

Last week, the environment ministers of the European Union (EU) member states also agreed on a "far-reaching tightening of existing climate protection requirements," according to the Ministry for Economic Affairs and Climate Action (BMWK). The EU is aiming to reduce its climate emissions by 55 percent by 2030.

"Electromobility is without question the central pillar for achieving the climate targets in the transport sector, and the automotive industry is also making a huge financial commitment here in research and development and the conversion of plants," Hildegard Mueller, president of the German Association of the Automotive Industry (VDA), said recently.

In May, Germany's largest carmaker Volkswagen expanded its global production network for electric vehicles with the launch of a second German site in Emden in the federal state of Lower Saxony in addition to its plants in Anting and Foshan in China.

With two more plants scheduled to start production this year, Volkswagen is creating the conditions in 2022 for building 1.2 million all-electric vehicles based on the Modular Electric Drive Toolkit (MEB) platform at its sites in Europe, the United States and China.