German auto suppliers scale back domestic investments

BERLIN: Faced with a weak economy and global uncertainties, German automotive suppliers are pulling back on domestic investments, a survey by the country's Automotive Industry Association (VDA) found.

According to the poll, 76% of suppliers plan to delay, relocate abroad or cancel investment projects originally planned in Germany.

The figure has risen for the second consecutive time compared to previous surveys in February and October, the VDA said.

The share of companies planning to scrap investments entirely rose to 20% from 14% in February.

Meanwhile, 24% of respondents intend to shift investments abroad, down from 29% earlier this year.

"These figures are alarming," VDA president Hildegard Müller said in a statement, citing intensifying global competition, geopolitical tensions, US President Donald Trump's tariff policy and poor business conditions in Germany.

Weak sales expectations in Europe were the most frequently cited reason for investment restraint, with 58% of respondents naming it as the main factor.

Another 16% pointed to high production costs in Germany, while 15% blamed difficult financing conditions.

The survey included 136 mid-sized companies within the automotive sector - primarily suppliers and manufacturers of trailers, bodies and buses.

Looking ahead, 31% expect business conditions to improve over the next 12 months, while 26% anticipate a further deterioration.