Page 92 - TURKRptJun19

Contraction of Turkish auto market continues with sales drop of 48% in first 4 months. Vehicle sales in Turkey sharply declined by 48% y/y to 123,000 units in January-April, data from the Automotive Manufacturers Association (OSD) showed, reflecting the impact of the ongoing economic recession in the country. In the first four months of the year, the passenger car market alone contracted 47% y/y to 93,000 units sold. The automaking industry’s overall output, meanwhile, fell by 13% from a year ago to 489,429 units in January-April, with passenger car production declining 14% y/y to 322,218 units. Despite the local currency’s severe depreciation since the start of the year following on from the collapse in value that was seen last year— which was supposed to boost sales to foreign markets—automotive exports in units dropped 8% to 426,026, with the decline in passenger car exports more pronounced at 12%, taking the total down to 275,000. Europe’s own problems with lower growth and consumer demand are clearly impacting on the export performance. The lira has lost nearly 15% of its value against the US dollar this year, following on from the 28% shed last year. Auto exports generated a total of $10.5bn in revenues in the first four months of the year, marking a 7% decline from a year ago while the value of passenger car exports plunged as much as 14% y/y to $3.9bn in the same period. The outlook for the country’s large automotive industry is not very bright as factors depressing consumer confidence remain in place. The country’s national income is expected to decline this year. Inflation and unemployment are running at high levels. And Ankara has not resolved its key foreign policy and other disputes with its long- time ally the US, souring market sentiment. However, Turkey’s Finance and Treasury Minister Berat Albayrak sounded optimistic in remarks he made on May 12 about the economy. He suggested that the economy would recover after just two quarters of contraction. He was also confident that inflation and employment would improve this year.
Turkey may extend special consumption tax cut on cars says Erdogan hitting the pre-Istanbul revote campaign trail. The move would be aimed at boosting car sales that have contracted sharply amid Turkey’s recession. Cuts on the special consumption tax for some cars were introduced last November. Officals later extended the cuts until the end of June.
Turkey's Vehicle Industry
Apr
y/y
Jan-Apr
y/y
P. Cars Production
83,459
-8%
322,281
-14%
Total Production
127,913
-8%
489,429
-13%
P. Cars Sales
24,416
-56%
93,228
-48%
Total Sales
32,088
-57%
123,155
-48%
92 TURKEY Country Report June 2019 www.intellinews.com