The business climate in Germany’s auto industry suffered its biggest plunge and hit its lowest stage in April since 1991 when the Ifo financial institute began collecting information post-reunification, a survey showed Monday.
The news came ahead of a phone call meeting that Chancellor Angela Merkel will hold with executives of the German auto industry Tuesday to discuss the impact of the coronavirus pandemic on manufacturing and sales.
Ifo stated its survey of 75 auto firms confirmed a current enterprise index for the industry dropped to -85.4 points in April from -13.2 in March. The April reading plunged below a reading of -82.9 points registered in April 2009, during the financial crisis.
“We have never witnessed such bad figures for this vital sector,” stated Klaus Wohlrabe, head of forecasting at Ifo.
Sub indices on orders, and production and export prospects all plunged, with capability utilization down to 45%.
Ahead of Tuesday’s meeting with Merkel, Volkswagen and Daimler have urged the government to help boost demand for cars.
The pandemic hammered first-quarter profits and compelled both car manufacturers to suspend their outlooks for the year.
Car sales internationally have dropped as measures to contain the pandemic forced assembly lines to shut and showrooms to close, ravenous manufacturers of much-needed cash for investments.