The participation of locals in the automotive market is decreasing
President of the Automotive Industry Association (OSD), Cengiz Eroldu, said: “We opened the 1 million production limit in the automotive industry in 9 months. This means we are back to our pre-pandemic production numbers. “This is actually very positive in terms of our production,” he said.
Eroldu stated that the acceleration of the automotive industry in the nine-month period of the year was parallel to that of the first six months and that production exceeded one million in nine months: “This is very satisfactory. “We have reached a number that we have not seen in many years,” he said.
Noting that there has been an improvement in capacity utilization, and that this is especially supported by exports, Eroldu said: “While our capacity utilization increased by 7 percent, our exports increased by 7 percent in terms of units at the same level in 9 months”. . The domestic market continues at a very good level in 9 months. “We see a total domestic market increase of 63 percent, including heavy vehicles,” he said.
However, Eroldu stated that this positive outlook supports the economy, but the constant decline in national participation in the domestic market is negative and continued his words as follows:
DECREASE FROM 45 PERCENT TO 37 PERCENT
“For us, the proportion of national vehicles is important. As we always talk about it, our sales in the domestic market are important for us in terms of sustainability and continuity of the automotive industry in Turkey. We cannot survive only with export-oriented projects. This is a topic we have always emphasized for many years.
That is why it is important for the Turkish automobile industry to maintain a certain amount of sales in the domestic market, but we see that we are also suffering losses here. Unfortunately, the share of domestic manufacturers in total vehicles, which was 45 percent last year, has decreased to 37 percent this year.
Of course, the most important factor here is the car. “We also have a national share in automobiles, ranging from 39 percent to 31 percent.”
THE SHARE OF IMPORTS INCREASED BECAUSE 80 PERCENT AND MORE ARE SOLD WITH SCT
Eroldu also addressed issues affecting mobility in the national market such as the automobile industry.
Recalling that all hybrid and internal combustion cars in the Turkish market are in the bracket of 80 percent or more of the Excise Tax, Eroldu said:
“This prevents citizens who need mobility in Turkey from accessing vehicles and also causes a decrease in national participation in the domestic market. Because today, domestic car manufacturers and domestic manufacturers in Turkey usually offer more affordable vehicles in the B and C segments. Now selling these accessible vehicles with 80 percent of the Special Consumption Tax generates a greater impact on customers. This also causes the proportion of imports to increase.
On the other hand, we see an increase in the share of electric cars in Turkey, parallel to that in Europe. Last year it was 1 percent, now it is 5.9 percent. If we just look at September, it’s actually hit double digits. Likewise, we see that the market share of Chinese brands in the Turkish market is increasing.”
Eroldu stated that the difficulties experienced by individual customers in obtaining car loans continue and said that “as you know, certain percentages of loans can be used based on the bases. Apart from that, we see that banks are not very willing to grant loans to individual customers.
When we add all these factors together, a picture emerges that unfortunately increases our share of the domestic market from 45 percent last year to 37 percent, which, as I said, is not a very sustainable figure for the automotive industry. “We need to manage this as well.” he said.
EXPECTED 10 PERCENT DECREASE IN SALES
Eroldu stated that they expect the automotive market to exceed 1,150,000 units this year and said: “We do not expect that in October we will drop below 100,000. Thus, when we put the planting into perspective, we almost reached one million. Therefore, it seems that this is no longer a prediction, the year 2023 will exceed one million 150 thousand.” he said.
Noting that they expect a decrease of around 10 percent in total sales next year, Eroldu concluded his words as follows:
‘NEGATIVE REAL INTEREST RATES APPEARED, MONEY STARTED BURNING’
“Now we have a pre-election period for the first 3 months of next year. As you know, those times in Türkiye are always lively, there is movement. But of course there is another reality about Türkiye that we must see. Now we have entered the path of real interest rates, our minister Mehmet Şimşek always says. When we look at inflation projections, interest rates in Turkey are now pointing to real interest rates.
If we look at past inflation, there is still negative interest, but if we look at future inflation, we are now heading towards real interest. Why was there a huge explosion in demand in 2022 and 2023 because there were very high negative interest rates? When negative interest rates emerged, money began to dry up. When money started disappearing, everyone wanted to buy goods. “Those who bought a car bought a car, those who couldn’t buy a car bought other things, so in the end everyone wanted to buy a product and opted for raw materials.” (AA)