Posted by meb at June 11th, 2008

Despite its high performance, especially in exports, Turkey’s automotive sector is unsettled about the debate on the added value the sector creates.

Responding to claims that the sector is overly dependent on imported goods, representatives of the sector highlighted automotive’s successes yesterday.

“Some say the automotive sector creates 10 percent added value, but this is a miscalculation. If it were true, we would not be able to compete in the global market,” said Erkut Özerman, chairman of Uludağ Automotive And Sub Industry Products Exporters’ Union (UTAYSİB) at the press meeting by the Automotive Industry Promotion Committee (OETK) in Istanbul.

Emphasizing the sector’s efficiency and profitability, he said the automotive sector has “provided an export surplus worth $3.5 billion last year.”

“Considering a $2.6 billion-worth export surplus within the first four months of this year, we expect the annual figure to reach $7 billion by the end of 2008,” Özerman added. “The added value automotive sector creates is no less than 40 percent.”

“The sector’s performance may be a remedy for Turkey’s current account deficit, which is expected to reach $50 billion this year,” he said. “The automotive sector provided a $20.3 billion foreign currency input last year. By the first four months of 2008, this figure reached $11.6 billion.”

Today, the sector has “the capacity to produce 1.2 million vehicles annually,” he noted. “We expect 1.3 million vehicles will be produced by the end of the year, which means the sector is currently operating with 103 percent capacity.”

R&D operations crucial:

Responding to a question on whether there is an upcoming foreign investment in the sector, Özerman said they have received no such information. “There is no such investment attempt as far as we know,” he said. “Hyundai is looking into producing vehicles in Turkey, so does Toyota. Renault plans to produce a new version of one of its existing models in Turkey. But there is no information on such a new investment.”

Zafer Çağlayan, industry and trade minister, had said last December that there was going to be a foreign direct investment worth 1 billion euros in automotive, but did not name any company.

“As production capacity has been increased, we aim to improve in design and marketing,” Özerman told journalists. “The research and development (R&D) operations have a crucial importance within the context of design. We expect the government to support R&D operations.”
source: Turkish Daily News