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9.2.2 ​Automotive corporate news
Ford Otosan (FROTO), a six-decade-old JV between Ford and Turkish conglomerate Koc Holding, registered a 7% y/y decline in March LCV sales while Tofas (TOASO), a five-decade-old JV between Fiat and Koc, posted a 23% y/y decrease in March passenger car sales.
Both JVs were established amid the economic realignments following the disruption of World War II. They are set to be tested by such a wrenching level of global market turbulence and fallout for the first time.
Tofas has a take-or-pay contract with Fiat while Ford Otosan has a cost-plus-type agreement with Ford, but what condition the various JV partners might find themselves in to push ahead on existing contractual terms remains questionable.
Both ventures have halted production along with non-listed peers.
“Policymakers [in Turkey] have acted swiftly with fiscal stimulus and interest rate cuts, but this won’t prevent output falling sharply in Q2,” Liam Peach of Capital Economics said on April 1 in comments on the March manufacturing purchasing managers’ index (PMI) release for the emerging Europe region, posted in a note with the title “The slump in output has only just begun”.
Mercedes Benz Turkey recommenced production at the Hosdere bus plant and Aksaray truck plant on April 20 and April 24​, respectively.
The company halted production at the plants in late March because of supply chain disruptions attributed to effects of the coronavirus (COVID-19) pandemic.
Of Turkey’s shuttered automakers, Anadolu Isuzu became the first to resume operations​. It halted production on March 30 because of the
55​ TURKEY Country Report​ May 2020 ​ ​www.intellinews.com