BERLIN, May 4 (Xinhua) — The German ifo Institute’s indicator for the business situation of Germany’s car manufacturers and their suppliers climbed from 10.7 points in March to 21.6 points in April, its highest level since April 2019, the institute said on Tuesday.
German carmakers have “overcome the slump they suffered due to the coronavirus,” said Klaus Wohlrabe, the institute’s head of surveys, in a statement.
The indicators for demand and order backlog both rose significantly in April, and German carmakers are “expecting to see an increase in their export business,” the institute noted.
Production is also expected to be ramped up further as a result. In April, German carmakers’ capacity utilization already reached 91.1 percent.
Problems with intermediate products, reported by 60.4 percent of German companies, are the “main issue” at the moment, the institute noted. Several automotive plants have announced their intention to introduce short-time work schemes due to a shortage of silicon chips.
Reflecting the ongoing structural change in the industry, Germany’s carmakers plan further job cuts despite good business. The European Union’s “ambitious emissions targets” are forcing companies to invest heavily in the production of less labor-intensive electric vehicles, the ifo Institute noted.