Turkish auto market seen shrinking %20 in 2009, manufacturers warn
Posted by meb at November 29th, 2008
Turkish automotive market sales are expected to shrink 20 percent next year in response to the global financial crisis and economic slowdown, the head of a Turkish automotive association said on Friday.
Turkey’s car industry, which has grown dramatically since a 2001 financial crisis, has not been spared the dramatic global downturn and easing access to credit is crucial in keeping the wheels of industry turning, said Ibrahim Aybar, chairman of the Turkish Automotive Distributors’ Association.
“The issue is how we can keep the domestic market alive. The first thing will be easing credit facilities and secondly some supportive actions,” Aybar said on the sidelines of an automotive conference in Istanbul.
He declined to specify what action was necessary but the automotive industry has called for steps to ease the tax burden. Last month government sources said it may take steps to reduce loan costs and cut the special consumption tax on vehicle sales.
The government is set to announce an economic stimulus package soon but it is not clear if that will include steps to boost the automotive industry.
Turkish domestic automotive sales fell 4.2 percent to 640,000 vehicles last year. Exports rose to $13.38 billion from $10.13 billion over the same period.
“It is more or less obvious that this year (vehicle sales are) going to be about 10-15 percent less than 2007 in the Turkish domestic market,” he said.
“It is not so easy to forecast for 2009 but in my opinion (domestic sales) next year are going to be about 20 percent less than 2008. So the shrinkage will continue,” he added.
However, there were still signs of consumer interest to keep the auto market moving.
“For 2009, in Turkey there are still customers in showrooms so the people are still in the mood for purchasing something. This is the most valuable thing for us nowadays,” he said.
In recent months the export market, crucial to manufacturers in Turkey, has also suffered severely.
Turkish vehicle exports plummeted 42 percent year in the first three weeks of November due to crumbling consumer demand in Europe, according to data from the Uludag Exporters Union.
The main automotive producers in Turkey are Tofas, a joint venture between Turkish conglomerate Koc Holding and Fiat, Koc-Ford joint venture Otosan, Oyak Renault and Toyota.
The large investments by major car producers in Turkey in recent years had put Turkey in a strong position and Aybar said the country had some advantages compared with other European countries in coping with the global crisis.
“Turkey has entered this difficult period with some advantages in terms of efficiency, in terms of ability of the labor force and investments,” he said.
source: Hurriyet daily news
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