The business climate within the automotive industry showed a slight improvement in May. According to the Ifo Institute, the indicator rose to -20.8 points, up from -23.5 points in April. This suggests that companies assessed their current business situation slightly more favorably than in the previous month and are also less pessimistic about the coming months. However, Anita Wölfl, an Ifo industry expert, noted that “given the ongoing high level of uncertainty, the mood in the auto industry remains very subdued”.
Export expectations, however, dropped significantly, falling from 11.7 points in April to -16.4 points in May. The renewed tariff threats from the US in early May were likely a major contributing factor. Despite this, a sense of relief may have emerged in the automotive sector after the European Commission, Parliament, and the Member States Council reached an agreement on implementing the US trade agreement on May 20th. Nevertheless, Wölfl added that the existing US tariffs of 15% on vehicles and their parts still pose a noticeable challenge to the German automotive industry.
