According to foreign media reports, the Munich research institute Ifo Institute said that due to automakers including Volkswagen Group to reduce the output of high-cost factories, the German automotive industry’s capacity utilization rate has fallen to about 78%, 9 percentage points lower than the long-term average. More than 43 percent of respondents complained of a lack of orders, compared with 29 percent in April this year.
On August 5, Ifo announced that business expectations for the German automotive industry slipped from “-9.5 points” in June this year to “-18.3 points” in July this year. Over the past few weeks, a number of German automakers have published poor quarterly financial reports. Ifo’s Anita Wölfl said in a statement: “The German automotive industry is falling further into crisis. The situation may not improve significantly in the coming months.” After spending billions of euros on upgrading electric car technology, the German auto industry is facing falling demand for electric cars, as well as pressure from the Chinese market. German automakers, including Volkswagen Group and Mercedes-Benz Group, have become increasingly confused about the outlook for their auto industry due to declining sales of electric cars and weak performance in the Chinese market.
In the first half of this year, Volkswagen Group’s operating margin fell to 6.3 percent, down from 7.3 percent in the same period last year, with its core Volkswagen brand’s operating margin dropping to 5 percent in the first half of this year, while premium brand Audi’s operating margin was hit by supply chain bottlenecks. Mercedes-Benz Group reported a net profit of 6.087 billion euros in the first half of this year, down 20% year-on-year; sales fell 6% in the same period, with electric car sales down 17%. In the first half of this year, BMW Group’s net profit fell 14.6% year-on-year to €5.656 billion.
Mercedes-Benz Group also lowered the upper end of its full-year margin expectation range, while Volkswagen Group pledged to make deeper cost cuts in response to the market’s declining sales.