Mood much improved in German car industry, experts say

The mood in Germany's car industry improved sharply in October despite recent bad news in the sector, according to experts at the ifo economic institute.

The ifo business climate index for the sector rose from minus 33.2 to minus 4.1 points, its highest level since mid-2024. 

Expectations also improved. Those seeing the future situation negatively still outweighed optimists, although by far less than recently.

"The automotive industry is still not out of the woods, as the sharp monthly fluctuations in the business climate indicate a very high level of uncertainty in the sector," said ifo industry expert Anita Wölfl.

Wölfl said one reason for the better figures could be the agreement between France and Germany on a joint automotive strategy. She sees it, however, as only a brief respite for the industry.

"The agreement gives the automotive industry a certain window of opportunity," said Wölfl, adding however that "it does nothing to alter its central challenge to catch up to the leaders again in the technology race."

Poor results from Germany's biggest manufacturer Volkswagen and job cuts at supplier Schaeffler were among the recent blows to the industry.  

The results of the US midterm elections on Tuesday - in which Democrats took control of Congress - did not play a role in the survey, which took place in October.