Page 69 - TURKRptSept19

Auto sales in Turkey have declined on annual basis in every single month since April 2018.
The Turkish auto market collapsed in July. Vehicle sales plunged 66% on an annual basis to 17,927 units, ODD shows. The figure was the third sharpest decline within the past year, following the 77% y/y contraction in October and the 68% y/y fall the month before that. Highly significant is the fact that tax cuts the government granted in a bid to revive sales of vehicles expired at the end of June. Automakers appeared to have become hooked on the tax generosity as a means of achieving anything like respectable sales figures in an economy struck by a biting recession. In the seventh month, 15,000 passenger cars were sold, which translated into a 63% drop from a year ago, while the light commercial vehicle (LCV) market—which provides some important clues on economic activity—shrank 76% y/y to just 2,500 units. Renault was the market leader with 2,800 sales in July, followed by Fiat which sold 2,116 cars. Hyundai was the third largest seller with 1,500 units while Toyota was fourth over the line with 1,398 units. Volkswagen’s sales amounted to 1,291 units. The ODD report also showed that one Maserati, one Ferrari, two Aston Martins and three Lamborghinis were sold in Turkey in July.
In January-July, the market shrank 47.5% y/y to a total of 213,000 units. In the first seven months of the year, passenger car sales declined 46% on an annual basis to 172,000 units. LCV sales nosedived 53% y/y to 41,000. On the first-half basis, the tax generosity clearly failed to produce the hoped for results, but things would have been much worse without it. Car industry representatives are calling for tax cuts to be made permanent as are their counterparts in other big consumer industries such as white goods.
The latest consumer sentiment survey showed not a glimmer of hope for the local car market. The headline consumer confidence index declined by 2% in July from June. The sub-index measuring consumers’ assessments of the general economic outlook for the next 12 months fell a steeper 0.8% m/m. It had risen 5.4% y/y in June. The survey also showed that the sub-index measuring the probability of a consumer buying a car in Turkey in the next 12 months eased to 1.6 in July from 5.5 in June.
Auto sales in Turkey are expected to be around 20,000 units in August, rising slightly from July’s 18,000 units, according Emre Ozpeynirci, a columnist for Turkish Hurriyet newspaper. Sales plunged 66% y/y in July after declining 16% in the previous month. The market contracted 55% y/y in May and 57% y/y in April. According to the newspaper, the number of car dealers has declined to 675 this year from 725 in 2018 as sales dropped. “What we are seeing is a consolidation. Larger and stronger dealers bought weaker ones. Dealers used to employ around 80,000 people, today this figure is less than 70,000,” said Murat Sahsuvaroglu, the head of the Authorised Automotive Dealers’ Association (OYDER).
Exports by Turkish auto parts producers plunged 22% on an annual basis in June, reflecting the impact of the slump in the global auto market, Turkish business daily Dunya has reported.
The industry’s exports reportedly dropped another 3% y/y to $886mn in July.
Shipments to Germany, the local producers’ main market, plunged 26% y/y in June and 9% y/y in July. Exports to France and Italy, two other major markets for Turkish firms, declined by 5% y/y and 9% y/y, respectively, last month.
“Auto production is slowing in Germany which is hitting Turkish parts and components producers,” Alper Kanca, head of the Association of Automotive Parts and Components Manufacturers (TAYSAD) said.
“Some clients are cancelling orders. A local firm which produces for Volkswagen was forced to end production on Fridays because the German auto giant reduced its orders,” Kanca explained.
69 TURKEY Country Report September 2019 www.intellinews.com