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Germany's auto industry saw business conditions at a two-year high in April, with expectations also improving markedly, the Ifo Institute said Tuesday. "Carmakers have now overcome the slump they suffered due to the coronavirus," according to Klaus Wohlrabe, Head of Surveys at ifo.

However, supply issues are a concern, with 60.4% of the responding firms planning to introduce short-term work again due to the shortage of silicon chips. Employment plans in general continue to signal job losses in the industry, reflecting a structural change towards electrical vehicles, where the production is less labour intensive, Ifo note.

The Ifo business index for the automotive industry jumped to 21.6 in April, following March's reading of 10.7, marking the highest level since April 2019. Expectations improved to 24.9 in April, up from 18.6 seen in March.

Source: Ifo Institute