Automotive sector probably out on leave for 2009
Posted by meb at January 2nd, 2009
The automotive industry in Turkey, like so many other countries throughout the world, entered a period of stagnation in the second half of 2008 as the global financial crisis, coupled with a resulting drop in demand, slowed the industry’s production lines.
Tens of thousands of workers relying on work in the sector to feed their families have lost their jobs and the gloomy situation is expected to get even worse in 2009. It is estimated that just in Bursa, a major center of auto manufacturing in Turkey, nearly 55,000 people will be laid off this year. Experts say the crisis will get even deeper in 2009 and the first positive signs will only be seen by early 2010. Many companies have already started to grant their workers temporary leave as they halt production for two-to-four-week periods.
The automotive sector rose as the best performing and highest earning industry in the country over the last decade, dethroning textiles and home appliances, in both domestic consumption and exports; however, it has also suffered the most contraction in the midst of the current crisis environment. Some auto manufacturers in Turkey have slashed working hours in their plant by 24 percent, while others have cut 30 percent of their labor force. Nearly 2,500 automotive workers lost their jobs each month in 2008. The sector had set a target of producing 1.3 million vehicles in total for the year, but the most recent data indicate that the actual figure will total only 1.15 million. Figures to be disclosed in the coming weeks are expected to show that nearly 500,000 cars were manufactured in Turkey in 2008.
Automobile Manufacturers’ Association (OSD) head Ercan Tezer said the industry will likely have grown by just 6 percent in 2008 and that in 2009 it will see a recession of between 15 and 20 percent. In other words, only 450,000 cars will see the end of production lines this year.
Automobile Distributors’ Association (ODD) President İbrahim Aybar, on the other hand, states that although they can do nothing to bolster external demand, they still hold the necessary instruments to empower domestic markets.
The automotive supply industry also doesn’t have bright projections for the year ahead. It had seen $13.5 billion in production, earned $8.5 billion from sales abroad and employed 200,000 people in the first 11 months of 2008. As a result of worsening global economic conditions, this critical business has been passing through hard times and will probably continue to face peril in 2009. Even now reports are arriving on a daily basis about hundreds of people losing their jobs in the sector. Automotive Parts and Components Manufacturers’ Association (TAYSAD) President Ömer Burhanoğlu stresses that the contraction in the auto business has done major damage to parts suppliers, as well.
source: Today’s Zaman
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