Sentiment in German automotive industry plunges in November

Sentiment in the German automotive industry dropped sharply in November, a leading economic institute said on Wednesday.

The Munich-based ifo Institute said its business climate index for the country's vital carmaking sector dropped to -20 points from -13.4 in October.

The decline is largely due to worsening business expectations, the researchers assessed.

"These ups and downs in the business climate reflect the very high and rising level of economic policy uncertainty in Germany and worldwide," said ifo expert Anita Wölfl.

While the indicator for companies' assessment of their current business situation inched up from -21.7 to -17 points, firms' business expectations fell dramatically from -4.6 to -23 points in November.

Sentiment in the sector has been fluctuating sharply since the middle of the year after a prolonged period under -30 points in the ifo index.

Germany's automotive industry is facing historic challenges due to rising costs, tariffs, heavy competition and declining demand.

Chancellor Friedrich Merz's government announced last week that it would campaign for the European Union to drop its planned ban on new petrol and diesel cars from 2035.

The Federal Motor Transport Authority's new registration figures for November are expected on Wednesday. Between January and October, 2.5% fewer new cars were registered in Germany than in the same period last year.