Key Highlights:

• German automotive sector sentiment rises but remains negative
• Ifo business climate index up 8.4 points to -12.9
• Stronger business expectations and rising exports drive improvement

BERLIN, Nov 5 (Reuters) – Sentiment in Germany’s struggling automotive industry improved significantly in October, according to a survey by the Ifo Institute, though it remained in negative territory.

The Ifo business climate index for the automotive sector rose 8.4 points to -12.9, reflecting a notable rebound despite ongoing challenges from chip supply shortages, high tariffs, and competition from China.

“Business expectations in the automotive industry are markedly brighter. Although still negative, they are higher than they have been for two years,” said Anita Woelfl, Ifo’s sector analyst.

The expectations index jumped 18.2 points to -3.9, driven by strong demand and high production capacity utilization. Export expectations also improved, rising to 18.0 points in October, slightly higher than September’s 16.7 points.

Carmakers continue to face supply constraints after Nexperia, the Chinese-owned, Netherlands-based chip manufacturer producing billions of basic automotive chips, was seized by the Dutch government in late September.

The improved sentiment suggests that despite lingering challenges, the German auto industry is beginning to recover, with growing domestic and international demand boosting optimism among manufacturers.