Auto export growth slumps amid crisis
Posted by meb at November 26th, 2008
Automotive exports, which have long been the engine driving Turkey’s export boom, are now being threatened by the increasingly negative effects of the ongoing global financial crisis.
Industry exports have entered a period of negative growth after enjoying a long period of continuous growth. Auto exports decreased by a record high of 42 percent during the period between Nov. 1 and Nov. 23 compared to the same period a year previous. According to Uludağ Exporters’ Union (UİB) data, the stagnation seen in European markets in the second half of this year is starting to appear in Turkey, causing export growth to shudder to a halt.
At the beginning of the year, things were far brighter than now. Turkey’s auto exports increased by 79 percent in January compared to the same month in 2007, amounting to $2.2 billion, with healthy export numbers staying above the $2 billion mark until August. Steady growth ceased after the summer, with the emerging global financial crisis on the horizon. Figures for August and beyond have been characterized by fluctuating and unpredictable demand.
When it came to August, the increase in growth of auto exports slowed down dramatically, with only an 8 percent rise over August 2007 figures, amounting to $1.4 billion.
In September, auto exports were up almost $600 million on the previous month; however, this was largely due to growing Russian demand. The optimistic atmosphere in the auto sector did not last for long, with exports in the period from Nov. 1 to Nov. 23 crashing, dropping 42 percent on 2007 figures, to just $894 million. The Turkish Automobile Manufacturers’ Association (OSD) recently announced that the shrinking European market, which accounts for 90 percent of Turkish exports, had began to impact exports in October with the cancellation of orders.
Observers now increasingly agree that the automotive sector is in danger of collapsing further due to both a foreign and domestic sales slump, especially as European markets slip into recession. Production cuts and layoffs in the Turkish automotive sector are therefore quite likely in the coming weeks.
source: Today’s Zaman
Related posts: