(May 4): German automaker sentiment slumped in April as a shortage of critical inputs such as helium began to bite, underscoring how disruption triggered by the Middle East conflict is reverberating through Europe’s supply chains.
A gauge of business expectations plunged to minus 30.7 from minus 15.3 in March, according to a monthly survey of carmakers by the Munich-based Ifo Institute.
It flagged helium — used in chipmaking, airbags, metal processing and battery leak detection — among the scarcer inputs. Qatar accounts for roughly 40% of European Union (EU) helium supply, the institute said, with flows disrupted and prices stoked by the closing of the key Strait of Hormuz waterway.
European automakers including Volkswagen AG and Mercedes-Benz Group AG have so far avoided major production outages linked to the US-Israeli war on Iran. At the same time, they are closely monitoring supplies of materials such as plastics and aluminium after shutdowns of key facilities in the Middle East.
The growing shortages add to uncertainties including renewed fears of higher US trade tariffs after President Donald Trump said he would increase auto and truck levies on the EU next week to 25%.
“Added to this are indirect effects from the Iran crisis, which are reflected in the decline in business expectations: overall uncertainty among companies and households is rising,” Ifo said. “Combined with high energy prices, this could lead to consumers holding back on purchases of new cars.”
See also: Trump announces plan to get ships out of Hormuz, vows US support
More than 9% of companies reported shortages of key inputs in April, up from about 1% in March, according to the survey.
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