Automotive Ekports July 2024
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Monthly automotive aftermarket magazine<br />
GROUP CHAIRMAN<br />
H. FERRUH ISIK<br />
PUBLISHER:<br />
İstmag Magazin Gazetecilik<br />
İç ve Dış Ticaret Ltd. Şti.<br />
Managing Editor (Responsible)<br />
Mehmet Söztutan<br />
mehmet.soztutan@img.com.tr<br />
Advertising Sales Consultant<br />
Adem Saçın<br />
+90 505 577 36 42<br />
adem.sacin@img.com.tr<br />
Enes Karadayı<br />
enes.karadayi@img.com.tr<br />
International Marketing Coordinator<br />
Ayca Sarioglu<br />
ayca.sarioglu@img.com.tr<br />
Finance Manager<br />
Cuma Karaman<br />
cuma.karaman@img.com.tr<br />
Digital Assets Manager<br />
Emre Yener<br />
emre.yener@img.com.tr<br />
Technical Manager<br />
Tayfun Aydın<br />
tayfun.aydin@img.com.tr<br />
Graphic & Design Advisor<br />
Sami aktaş<br />
sami.aktas@img.com.tr<br />
Accountant<br />
Yusuf Demirkazık<br />
yusuf.demirkazik@img.com.tr<br />
Subscription<br />
İsmail Özçelik<br />
ismail.ozcelik@img.com.tr<br />
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İstmag Magazin Gazetecilik<br />
İç ve Dış Ticaret Ltd. Şti.<br />
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Mehmet Soztutan, Editor-in-Chief<br />
mehmet.soztutan@img.com.tr<br />
We are at Automechanika Mexico <strong>2024</strong><br />
The Turkish automotive industry, which was originally founded for importsubstitution<br />
purposes and focused on the domestic market for a long period,<br />
transformed itself into a production base for a number of global models. It<br />
is evident that competitiveness at the domestic level has been replaced with<br />
competitiveness on a global scale.<br />
There are major multinational vehicle manufacturers with their own production<br />
facilities in Türkiye. While some of these companies are engaged in a joint<br />
venture with Turkish companies, others are operating independently.<br />
The Turkish automotive supplier industry produces almost all types of parts,<br />
components and spare parts such as engines and engine parts, power train<br />
parts and components, brake and clutch parts and components, hydraulic and<br />
pneumatic systems, suspension systems, security systems, rubber and plastic<br />
parts, chassis, frames and parts, casting and forging, electrical equipment and<br />
parts, lighting systems, accumulator batteries, seats etc.<br />
producers of parts and components have attained high standards reflected by<br />
large export volumes to the Western countries.<br />
There are numerous producers of automotive components and services in<br />
Türkiye. More than half of these manufacturers compete in global markets and<br />
set high standards of export figures. Among them are many small and medium<br />
manufacturers with advanced technologies, constant updates and support from<br />
outside Türkiye, and a dynamic company structure. Many companies operating<br />
in the Turkish market possess international certifications, enhancing their global<br />
market position.<br />
Our publications remain at the service of those businesses people seeking to<br />
increase their share in the increasingly competitive foreign markets.<br />
This month, we participate in Automechanika Mexico <strong>2024</strong>. Last year’s event<br />
featured an impressive 511 exhibitors from 24 countries and attracted over<br />
27,200 visits from 39 countries, setting the stage for an even more exciting event<br />
this year.<br />
We are convinced that the event would be instrumental to increase business<br />
opportunities in the automotive industry as usual.<br />
We wish all business people success and lucrative business.<br />
automotiveexport<br />
EDİToR<br />
automotiveexports
Chinese car makers push for retaliatory EU car tariffs<br />
Chinese automakers have urged Beijing to retaliate<br />
against Brussels’ decision to place curbs on Chinese<br />
electric vehicle exports by raising tariffs on imported<br />
European gasoline-powered cars, the state-backed<br />
Global Times newspaper said.<br />
In a closed-door meeting also attended by European<br />
automakers, Chinese car companies and industry<br />
groups suggested authorities hike tariffs on large<br />
gasoline-powered vehicles imported from the<br />
European Union, the report said.<br />
EU trade policy is turning increasingly protective owing<br />
to concerns China’s production-focused, debt-driven<br />
development model could see the 27-member bloc<br />
flooded with cheap goods, including EVs, as Chinese<br />
firms look overseas due to weak domestic demand.<br />
The European Commission’s June 12 announcement<br />
that it would impose anti-subsidy duties of up to<br />
38.1% on imported Chinese EVs from <strong>July</strong> follows the<br />
United States hiking tariffs on Chinese cars in May,<br />
and opens a new front in the West’s trade war with<br />
Beijing, which began with Washington’s initial import<br />
tariffs in 2018. The Global Times first reported that a<br />
Chinese government-affiliated auto research center<br />
was suggesting China raise its import tariffs on large<br />
gasoline-powered cars to 25%, citing an industry<br />
expert. China’s current import tariff for cars is 15%.<br />
Chinese authorities have previously hinted at possible<br />
retaliatory measures through state media commentaries<br />
and interviews with industry figures.The same<br />
newspaper also hinted that Chinese firms planned to<br />
ask authorities to open an anti-dumping investigation<br />
into European pork products, which China’s commerce<br />
ministry announced it would undertake. It has also<br />
urged Beijing to look into EU dairy imports.<br />
<strong>July</strong> <strong>2024</strong><br />
8
Türkiye in advanced talks with<br />
China’s BYD, Chery for EV plants<br />
<strong>July</strong> <strong>2024</strong><br />
Industry and Technology Minister Mehmet Fatih Kacır<br />
said Türkiye is in advanced discussions with Chinese<br />
electric carmakers BYD and Chery Automobile for<br />
factory investments in the country.<br />
“We would like to complete the talks as soon as<br />
possible. We have come a long way with both of<br />
them,” Kacır said in an interview to Bloomberg News.<br />
He added that separate negotiations with SAIC Motor,<br />
which owns MG Motor, and Great Wall Motor are also<br />
underway.<br />
The development comes as the European Commission<br />
is investigating whether fully electric cars manufactured<br />
in China were receiving distortive subsidies and<br />
warranted extra tariffs.<br />
BYD, Chery and Great Wall Motors did not immediately<br />
respond to a request for comment, while SAIC could<br />
not be immediately contacted.<br />
“There is significant interest by global brands for<br />
the production of electric cars in Türkiye. Türkiye’s<br />
membership in the European Union’s customs union<br />
is still a big advantage for many global brands,” Kacır<br />
had previously said.<br />
In December, Kacır visited eight different Chinese<br />
cities and engaged with automotive and battery<br />
manufacturing companies, including GAC AION, Chery,<br />
Zeekr, BYD, SAIC, Fararis Energy and Huawei.<br />
Farasis is establishing a battery cell production facility<br />
in northwestern Bursa’s Gemlik district in collaboration<br />
with Togg.<br />
Türkiye in 2023 had imposed a 40% additional<br />
tariff on imports of electric vehicles from China. EV<br />
sales in Türkiye hit a record of 65,562 units in 2023,<br />
constituting 6.8% of the total auto sales.<br />
The record share was driven by the first homegrown<br />
EV brand, Togg, and the entry of new players like Tesla<br />
and BYD.<br />
Sales of EVs in the first four months of this year rose<br />
by more than 270% to over 20,250 units, according to<br />
the <strong>Automotive</strong> Distributors and Mobility Association<br />
(ODMD).<br />
12
No risk with Tradisk<br />
Specialized in the tractor aftermarket industry for almost a half century,<br />
Tradisk offers more than 600 product variety with more than 20 tractor brands.<br />
Could you briefly introduce yourself and your<br />
company?<br />
Tradisk, established in 1982 in Arnavutköy, Istanbul,<br />
is a manufacturer of tractor clutch discs and clutch<br />
facings, serving customers worldwide with over<br />
100 employees.<br />
Sadi Angilci, General Manager<br />
Located in Arnavutkoy, Istanbul, Tradisk has been<br />
offering quality services to its customers all over<br />
the world. Increasing its product variety constantly,<br />
the company realizes this through its integrated<br />
manufacturing facilities. We asked more details to<br />
Mr. Sadi Angilci, General Manager at the firm:<br />
What is in your product portfolio and what are the<br />
prominent factors in these products? What kind of<br />
studies do you have on product development and<br />
R&D?<br />
Tradisk offers a portfolio of over 600 product<br />
variations, compatible with more than 20 tractor<br />
brands. Key features include a wide product range and<br />
integrated production facilities ensuring high-quality<br />
manufacturing processes.<br />
<strong>July</strong> <strong>2024</strong><br />
16
What makes you superior to your competitors?<br />
What sets Tradisk apart from competitors is its fully<br />
integrated facilities encompassing foundry, CNC<br />
machining, and assembly capabilities. This allows<br />
for superior product quality and stable production<br />
processes.<br />
Are there any investments planned in the short,<br />
medium and long term?<br />
Recent investments have doubled clutch facing<br />
production capacity and ongoing efforts focus on<br />
enhancing production speed and quality through<br />
modern machinery and facility improvements.<br />
Can you give details about your exports? What<br />
would you like to say about your current and target<br />
markets, foreign promotion, participation in fairs,<br />
etc. strategies?<br />
Tradisk operates in 33 countries across Europe, Asia,<br />
Africa, Australia, and North and South Africa.<br />
Regular participation in events like Automechanika<br />
Istanbul and Frankfurt strengthens international<br />
presence and expands customer network.<br />
Participation in the EIMA <strong>2024</strong> fair in Italy further<br />
underscores these strategies.<br />
Are there any topics or issues you would like to<br />
emphasize in particular?<br />
Particularly noteworthy is Tradisk’s growth and<br />
consolidation in the industry, highlighted by the merger<br />
with Hars Tractor in 2022, establishing itself as Turkey’s<br />
largest manufacturer of clutch discs.<br />
<strong>July</strong> <strong>2024</strong><br />
17
Europe’s auto suppliers navigate turbulencies<br />
<strong>July</strong> <strong>2024</strong><br />
For two decades, Emrullah Karaca has been<br />
manufacturing brakes. However, due to the impending<br />
closure of the Continental factory in northern Germany,<br />
where he is employed, he’s transitioning to assembling<br />
heat pumps.<br />
Production of the car component at the town of<br />
Gifhorn will end in 2027 and move to Croatia,<br />
the Czech Republic and Wales to keep the costs<br />
“competitive,” according to Continental, which will cut<br />
about 7,000 jobs worldwide.<br />
The relocation means a new career for 49-yearold<br />
Karaca, one of a rising number of workers in<br />
companies supplying Germany’s vital automotive<br />
sector who are being hit by a tsunami of redundancies.<br />
Facing up to the double shock of the end of<br />
combustion engines and rising competition from China,<br />
European suppliers like Bosch, ZF and Webasto have<br />
all announced cuts – which have piled up to the point<br />
where the issue has cast a shadow on the forthcoming<br />
EU elections. Brussels has promised to do more to<br />
boost the domestic car industry and tackle unfair<br />
competition from cheaper Asian rivals.<br />
However, the EU plans to outlaw the sale of new fossil<br />
fuel-powered cars starting in 2035, meaning some jobs<br />
will inevitably become redundant.<br />
The upcoming closure of the Continental plant in<br />
Gifhorn has catalyzed Karaca and the other 800<br />
employees working there to start retraining in another<br />
area. A local heating systems company, Stiebel Eltron,<br />
has proposed taking over the site and retaining some<br />
employees for future production.<br />
“Brakes or heat pumps, it’s all the same to me,”<br />
said Karaca, whose two parents both worked<br />
for Continental at the factory. Making exhausts,<br />
headlights, gearboxes, or brakes has long been a<br />
steady job, with suppliers in Germany alone employing<br />
270,000 people.<br />
However, the technologies they specialize in are<br />
obsolescent, and making battery cars is a less laborintensive<br />
undertaking.<br />
“If today you need 100 people to produce a normal<br />
motor, then with the electric motor, you only need<br />
10,” said Jutta Rump, a business professor at<br />
Ludwigshafen University.<br />
In Gifhorn, Stiebel Eltron offers further employment to<br />
some 300 of Continental’s workforce.<br />
Another 100 could find a home at a nearby Siemens<br />
mobility plant that supplies rail companies.<br />
The remaining jobs are under increasing pressure from<br />
Chinese competitors, who are capturing a growing<br />
share of the market.<br />
The Chinese battery maker CATL has grown in short<br />
order to become the world’s third largest auto supplier,<br />
in a sector still led by Bosch, according to consultancy<br />
Roland Berger.<br />
According to a study by the German carmakers<br />
association VDA, one in three companies in the sector<br />
is planning to move part of its production abroad in the<br />
coming years to cut costs.<br />
The axe has already fallen on 3,400 workers at Ford’s<br />
factory in Saarlouis, west of Germany.<br />
The plant closure will affect a whole network of local<br />
suppliers, whose workers staged a six-day strike in<br />
March to get better redundancy terms.<br />
Among them, 33-year-old Luca Thonet, employed by<br />
Ford supplier Lear, said he would like to stay in the<br />
region, close to the French border.<br />
“But there is almost no industry left in the region, and<br />
the other factories are not in a perfect situation either,”<br />
he told Agence France-Presse (AFP).<br />
Thonet cited the situation at ZF, the second-largest<br />
German auto supplier, which announced the closure of<br />
two sites in its domestic market.<br />
The ZF works council fears some 12,000 job cuts could<br />
be in the pipeline, with a number falling in the same<br />
region as Saarlouis. Germany may be facing a shortage<br />
of workers, but not all sectors are equally impacted.<br />
In IT, product development or sales, “there’s a lack of<br />
qualified personnel,” said expert Rump. “That’s not the<br />
case in production<br />
22
German auto magazine commends<br />
Togg, calls it ‘Turkish Tesla’<br />
<strong>July</strong> <strong>2024</strong><br />
Germany’s leading automobile magazine Auto Bild<br />
praised the Turkish-made electric vehicle Togg in a<br />
comprehensive review recently, comparing it to some<br />
of the top models of German juggernauts such as Audi<br />
and Volkswagen and Elon Musk’s Tesla.<br />
Türkiye’s domestic vehicle, Togg has been in the<br />
spotlight of international press in recent months, with<br />
Agence France-Presse (AFP) being one of the latest<br />
to report on the journey of the carmaker from its<br />
production base in Gemlik.<br />
Türkiye is hoping its first major electric carmaker,<br />
Togg, will put the country in the driver’s seat of the<br />
automotive industry, it said, also citing sales of over<br />
20,000 units last year and extensive Turkish automotive<br />
exports to Western markets.<br />
A report published by Auto Bild said, “As the Turkish<br />
Tesla, Togg made its debut at none other than the<br />
technology show CES in Las Vegas.”<br />
Since then it said the carmaker built a “massive”<br />
factory in the Gemlik district of Bursa, “ordered 1,000<br />
charging stations, and begun their installation across<br />
the country.”<br />
It also gave positive reviews of the car’s interior and<br />
exterior.<br />
Six years ago, “a handful of Turkish industrial giants<br />
from key sectors such as mechanical engineering,<br />
trade, electronics and communications joined forces to<br />
build the first car manufacturer of modern times,” the<br />
report said.<br />
“As a mid-range SUV, it aims to be on the same level<br />
as electric cars such as the VW ID4, Renault Megane<br />
E-Tech, Tesla Model Y and indeed the new Audi Q6,”<br />
the report said.<br />
However, the T10X is offered at a more affordable<br />
price than the vehicles in the same segment, it added,<br />
referring to the first model of the carmaker, which<br />
started sales last year. The basic version starts at TL<br />
1.40 million ($43,400).<br />
“This year they are already planning more than 40,000<br />
vehicles and are thinking beyond Türkiye. Instead,<br />
they want to try their luck with the T10X with us from<br />
autumn,” Auto Bild said.<br />
The article also praised Togg’s CEO Gürcan Karakaş,<br />
who grew up near Germany’s Bielefeld and learned his<br />
profession at Bosch, saying: “He knows that the world<br />
does not need another start-up producing electric<br />
SUVs. That’s why he takes things one step further and,<br />
like all visionary bosses, talks about the car as a smart<br />
device on wheels.”<br />
“That’s why the screen in the cockpit is not only larger<br />
and more brilliant than most competitors but actually<br />
spans seamlessly across the entire width of the<br />
vehicle,” it added, highlighting it is being equipped with<br />
various applications such as face ID.<br />
26
Türkiye’s electric car sales jump<br />
257% in first 5 months<br />
Türkiye saw over 27,600 fully electric car sales in the<br />
first five months of the year, marking a staggering<br />
257.3% rise when compared to the same period of<br />
2023, according to recent data from the country’s top<br />
automotive association.<br />
The market share of electric cars has also surged<br />
over the same period to over 7% while hybrid sales<br />
continued to increase, the data compiled by Anadolu<br />
Agency (AA) from the <strong>Automotive</strong> Distributors and<br />
Mobility Association (ODMD) showed. Overall sales<br />
of cars and light commercial vehicles in the country<br />
displayed a 6% increase during the first five months of<br />
the year. This resulted in a total of 471,743 new vehicle<br />
sales by the end of May, according to ODMD.<br />
<strong>July</strong> <strong>2024</strong><br />
28
Car sales during this period totaled 375,097, posting<br />
a 10.25% increase, while sales of light commercial<br />
vehicles plunged by 7.9% to 96,646 units.<br />
Within the car segment, gasoline-fueled cars led with<br />
247,828 units sold, followed by hybrid cars with 54,065<br />
units. Diesel car sales accounted for 39,351 sales, and<br />
those powered by LPG stood at 2,783.<br />
At the same time, sales of fully electric cars amounted<br />
to 27,604, the data showed.<br />
When including vehicles with an extended range<br />
(E-REV), effectively an all-electric vehicle, with all the<br />
motive power provided by an electric motor, but with a<br />
small ICE present to generate additional electric power,<br />
the electric car sales stood at 31,070 units in the first<br />
five months.<br />
By the end of May, compared to the same period last<br />
year, sales of diesel cars decreased by 33.1% and LPG<br />
cars by 37%, the data showed.<br />
The sales of gasoline cars saw an increase of 7.4%,<br />
while hybrid car sales rose by 50.3% and fully electric<br />
car sales skyrocketed, surging by 257.3% year-overyear.<br />
The main reason for the decline in diesel car<br />
sales is attributed to global manufacturers phasing out<br />
diesel car production, resulting in fewer new diesel car<br />
models being introduced to the market.<br />
The market share of gasoline cars decreased to<br />
66.1% from 67.8% compared to the first five months<br />
of last year, according to the data. The share of diesel<br />
cars decreased from 17.3% to 10.5%, and LPG cars<br />
declined from 1.3% to 0.7%, respectively.<br />
Meanwhile, from January through May, the share of<br />
fully electric cars in total sales increased from 2.3%<br />
to 7.4%, and for hybrids, it increased from 10.6% to<br />
14.4%. When considering all categories (fully electric,<br />
extended range electric and hybrid), vehicles with<br />
electric motors comprised 22.7% of the total market,<br />
respectively. In May alone, some 7,349 fully electric<br />
cars were sold, representing 9.2% of all sales for<br />
that month. Türkiye’s electric car sales surpassed<br />
the 65,000 mark in 2023, leaving behind many EU<br />
countries and securing the number six spot in the<br />
European sales ranking.<br />
Boosted by sales of the first domestic electric vehicle<br />
Togg, which sold nearly 20,000 units last year, the<br />
Turkish EV market remained buoyant in the first months<br />
of the year despite higher borrowing costs.<br />
Electric vehicles gained in popularity due to climaterelated<br />
goals, although concerns related to the<br />
availability of lithium – a key metal used for the<br />
production of EV batteries – affordability, and speed of<br />
building charging infrastructure globally remain as top<br />
focus of the sector.<br />
<strong>July</strong> <strong>2024</strong><br />
30
Turkish auto industry targets new<br />
$39B export peak in <strong>2024</strong><br />
<strong>July</strong> <strong>2024</strong><br />
Türkiye’s automotive sector is seeking to build on<br />
its peak in 2023 and achieve a new all-time high in<br />
exports this year, according to a senior industry official.<br />
The traditional leader in Türkiye’s outbound shipment<br />
made $35 billion (TL 1,080 billion) worth of shipments<br />
last year, compared to nearly $31 billion in shipments<br />
in 2022, according to the Uludağ <strong>Automotive</strong> Industry<br />
Exporters’ Association (OIB).<br />
That figure is sought to be lifted to $39 billion, said<br />
Baran Çelik, the head of the board of directors of OIB.<br />
The earlier peak was recorded in 2018, at $32 billion,<br />
before the coronavirus pandemic lowered the figure to<br />
$25.5 billion in 2020.<br />
“2023 was a year in which we once again broke the<br />
record and reached a significant value of $35 billion in<br />
exports, making us the sector with the highest exports<br />
in Türkiye,” Çelik told.<br />
The sector has been the export leader for 17 out of<br />
the last 18 years, except for 2022, he said, before<br />
regaining the leadership in 2023.<br />
Up to 68% of the automotive goods are shipped to<br />
the European Union, Türkiye’s biggest export market,<br />
according to Çelik.<br />
“When you include non-EU countries geographically<br />
within the market, it reaches a market size of over<br />
80%. Of course, the largest market among these<br />
is Germany, followed by other major European<br />
countries,” he said.<br />
“If we look at the top 10 markets we export to, eight of<br />
them are in the European region. In fact, if you include<br />
Russia in the European region, 9 of them are European<br />
countries.”<br />
Exports in January saw a 3% increase year-overyear<br />
to $2.8 billion, which Çelik says reinforces the<br />
achievability of the $39 billion goal he says isn’t “just<br />
a standalone target,” but “emerged as a figure backed<br />
by data.”<br />
“Unless there is a significant deviation, a major conflict<br />
or a disaster ... we anticipate that this year we will<br />
close with around $39 billion in exports, maintaining<br />
our position as the export leader,” he added.<br />
Çelik reaffirmed Europe’s importance for the industry<br />
but emphasized the aim for diversification and growth<br />
in new markets.<br />
“There are significant export demands in the Gulf<br />
countries and the North Africa region, and we are<br />
32
conducting special studies for these regions,”<br />
the OIB chair said. He also added a delegation<br />
of 23 companies that visited Morocco earlier<br />
this month. Çelik said North America has also<br />
been an important market but said they could<br />
not yet achieve the desired results in South<br />
America.<br />
“In recent years, with our Ministry of Trade, we<br />
have determined various strategies for distant<br />
geographies and, in parallel, we organize more<br />
than 10 events covering distant geographies,”<br />
he noted.<br />
“We organize national participation fairs, trade<br />
delegations and procurement delegations.<br />
We have product development (PD) activities<br />
and we have 18 companies in it. We organize<br />
various procurement and trade delegations with<br />
these companies. Our activities targeting distant<br />
countries actually demonstrate our focus on<br />
those markets.”<br />
Çelik also stressed the industry’s determination<br />
to increase engagement with China.<br />
“Despite China being an important competitor<br />
and threat to us, we also see it as a potential<br />
market due to being a major market in many<br />
product groups in that region. In this regard,<br />
while maintaining the high rate of exports to the<br />
European region, we are intensely focused on<br />
new markets to be added without incurring any<br />
numerical loss.”<br />
<strong>July</strong> <strong>2024</strong><br />
33
Ferrari’s first electric<br />
car to exceed $500K<br />
<strong>July</strong> <strong>2024</strong><br />
Ferrari’s first electric car will cost at least 500,000<br />
euros ($535,000), a source familiar with the matter told<br />
Reuters, as the luxury automaker prepares to open a<br />
plant that will make the model – and could boost group<br />
production by up to a third.<br />
The Italian brand, famed for its roaring petrol engines,<br />
has said it will launch an electric car late next year,<br />
and the planned price shows its confidence that<br />
ultrawealthy drivers are ready for it, even as massmarket<br />
rivals are slashing electric vehicle (EV) prices<br />
amid faltering demand.<br />
The price tag, which doesn’t include features and<br />
personal touches that typically add 15-20%, is well<br />
above the average sale price of around 350,000 euros,<br />
for a Ferrari in the first quarter of this year, and many<br />
rival luxury EVs.<br />
In a less exclusive segment, Porsche’s electric Taycan<br />
starts at around 100,000 euros.<br />
Ferrari did not respond to a request for comment about<br />
the price of its first EV, or its new plant, which is due to<br />
be inaugurated in its hometown of Maranello, northern<br />
Italy.<br />
The factory – or e-building – is a bold move for the<br />
company, which delivered fewer than 14,000 cars last<br />
year, as it will eventually allow production capacity to<br />
rise to around 20,000, the source said, speaking on<br />
condition of anonymity.<br />
Exclusivity underpins the cachet of the brand, and also<br />
its high prices. So any increase in output comes with<br />
risks.<br />
However, Ferrari has shown with its Purosangue<br />
SUV, launched in 2022, that it can achieve success<br />
expanding beyond its traditional two-seat sports cars<br />
and grand tourers.<br />
“There is an increasing demand out there for Ferraris,<br />
and they have room to meet part of it without<br />
compromising exclusivity,” said Fabio Caldato, a<br />
portfolio manager at AcomeA SGR, which holds Ferrari<br />
shares.<br />
Waiting lists for some models can top two years.<br />
“That is not getting any shorter. Being on the waiting<br />
list is in itself a status symbol,” Caldato said, noting<br />
an increase in potential wealthy customers in<br />
emerging markets, such as India and the Middle East.<br />
Second EV model<br />
The new factory in Maranello will give Ferrari an<br />
additional vehicle assembly line and will make<br />
petrol and hybrid cars as well as the new EV, plus<br />
components for hybrids and EVs.<br />
It will be fully operational in three to four months, the<br />
source said.<br />
A second EV model is also under development, the<br />
source said, adding the process was at an early<br />
stage, and that the company might not want to<br />
increase overall production to 20,000 vehicles per<br />
year, at least in the short term.<br />
CEO Benedetto Vigna told Ferrari shareholders in<br />
April that the “state-of-the-art plant will assure us<br />
of flexibility and technical capacity in excess of our<br />
needs for years to come.”<br />
Any rise in output would come with an increase in<br />
models, as Ferrari would stick to its policy of keeping<br />
output for any model within a certain limit, however<br />
successful, the source said.<br />
Rival Lamborghini plans to start selling its first EV<br />
model in 2028. Its CEO, Stephan Winkelmann, told<br />
Reuters it was more important to have the right<br />
product than to be first.<br />
Mediobanca analyst Andrea Balloni said he expected<br />
Ferrari’s new EV would have a high price tag to help<br />
preserve margins, compensating for the development<br />
of the new fully-electric technology and the larger<br />
number of parts sourced externally.<br />
“I expect the new EV to be a niche model, accounting<br />
for just over 10% of annual sales,” Balloni said,<br />
adding the core Ferrari client still preferred petrol<br />
models.<br />
36
China’s EV boom heads to<br />
Europe with bold expansion plans<br />
<strong>July</strong> <strong>2024</strong><br />
Starting in the 1980s, European automakers steadily<br />
conquered China, racking up millions in sales with little<br />
local competition.<br />
Now, they’ll have to defend their home turf in Europe<br />
from an onslaught of formidable Chinese electric<br />
vehicles.<br />
Chinese EV titans BYD, Chery and Great Wall Motor<br />
(GWM) are preparing a fusillade of product launches<br />
– about 20 over the next five years – and spending<br />
heavily on sales and marketing in their most important<br />
export market, according to Reuters interviews with<br />
18 China auto executives, consultants and industry<br />
experts familiar with the Chinese automakers’<br />
European strategy.<br />
After several years of swiping market share from<br />
foreign rivals in its domestic market, the world’s<br />
largest, China’s increasingly potent EV industry is ready<br />
to take the fight to Europe.<br />
Chinese electric vehicle makers have studied European<br />
car buyers for years, hiring industry veterans and<br />
selecting distributors with extensive local knowledge<br />
as they laid the groundwork to take on Tesla and<br />
legacy automakers, the sources said. BYD and Chery<br />
have already announced plans to manufacture cars in<br />
Europe.<br />
Chinese carmakers are now deploying a range<br />
of tactics to break into the market, ranging from<br />
sponsoring high-profile sporting events to raise<br />
awareness of their brands to building out their<br />
dealership networks and shoring up service-and-repair<br />
operations to protect resale values – a key requirement<br />
of fleet buyers who make up a large share of the<br />
European market.<br />
Chinese automakers’ European sales remain small<br />
because their brands are little known to consumers<br />
– with the exception of MG, a former British brand<br />
owned by SAIC, a state-owned Chinese automaker.<br />
But deliveries are growing rapidly and could surge with<br />
the release of additional models across a broad range<br />
of price segments, industry experts said.<br />
BYD saw its Europe sales triple to 15,000 vehicles<br />
in 2023 after years of exponential EV sales growth in<br />
China and other export markets.<br />
BYD has launched six electric models in Europe and<br />
a spokesperson said the company is rolling them out<br />
across 20 countries. It launched its first three models<br />
in the United Kingdom last year and plans two more<br />
this year, said BYD’s U.K. marketing manager, Mark<br />
Blundell. Great Wall plans to launch a model a year<br />
in Europe for the next five years, two distributors told<br />
Reuters. Chery will launch a total of eight SUV models<br />
under two brands, Omodo and Jaecoo, over the next<br />
two years, said Chery’s European managing director,<br />
Jochen Tueting.<br />
38
By comparison, Tesla has just two volume-sellers – the<br />
mid-priced models three and Y. Both are overdue for<br />
a redesign and are declining in global and European<br />
sales. BYD, GWM and Chery executives told Reuters<br />
that they are looking to plant deep roots in the<br />
European market. Chery’s Tueting said the company<br />
is focusing on all facets of the European automotive<br />
ecosystem, from branding to financing tools to repairs<br />
and resale values for both private and corporate<br />
customers.<br />
“We’ve been doing our homework,” Tueting said.<br />
SAIC’s MG did not respond to interview requests.<br />
Christina Bu of the Norwegian EV Association, which<br />
represents 120,000 EV owners, has met with many<br />
Chinese automakers and noted some have spent<br />
years planning their European strategy. Norway is a<br />
global leader in EV adoption. Bu said Chinese brands<br />
have adapted Chinese EV models for export so far,<br />
but they’re already working on models designed from<br />
scratch to target European buyers. They also don’t<br />
face the same pressure as Western rivals to turn a<br />
profit quickly because they are heavily backed by the<br />
Chinese government, she said.<br />
“Some of these players have spent a lot of money on it<br />
despite not having sold much yet,” Bu said.<br />
China’s auto industry, a mix of state-owned and<br />
private firms, has major cost advantages over foreign<br />
competitors in part because of government subsidies<br />
and the nation’s dominance of battery-minerals<br />
refining. In China, the explosion of EV brands has<br />
ignited a price war, with automakers led by BYD selling<br />
a slew of EVs priced between $10,000 and $30,000.<br />
Those rock-bottom prices have alarmed automakers<br />
and their political allies in the United States and<br />
Europe. U.S. President Joe Biden quadrupled tariffs on<br />
Chinese EVs to 100% in May. The European Union is<br />
currently investigating China subsidies and may soon<br />
raise tariffs on its cars.<br />
However, European auto executives said at a Reuters<br />
event in May that higher tariffs would do little to protect<br />
them from Chinese EVs unless Europe’s industry acts<br />
quickly to match their price and value.<br />
“The window is closing,” said Volkswagen board<br />
member Thomas Schmall. “We have two or three<br />
years.”<br />
So far, China automakers are not deeply undercutting<br />
foreign rivals. Instead, they maximize profits on exports<br />
by charging double or more compared to the Chinese<br />
price for the same vehicles.<br />
Their Europe prices are just slightly below comparable<br />
models from Western automakers, but the Chinese<br />
vehicles are often stuffed with standard-equipment<br />
goodies – such as heated-and-cooled seats,<br />
360-degree cameras and digital dashboards – that<br />
often cost extra in competitors’ vehicles.<br />
Japanese automakers used similar tactics when<br />
expanding into Western markets decades ago.<br />
As they expand exports, Chinese automakers are<br />
implementing complex strategies to increase their<br />
appeal to European customers.<br />
They have improved their safety ratings, they’ve<br />
strengthened repair-and-service operations and<br />
distribution, bolstering resale values, which are<br />
particularly important for people who lease cars.<br />
Leasing companies charge lower monthly payments for<br />
cars with high resale value because they’re worth more<br />
at the end of the lease term when buyers can choose to<br />
either buy them or return them to the leasing firm.<br />
Chinese EV makers’ attention to detail reflects what<br />
they’ve learned about European consumers, said Bo<br />
Yu, Greater China country manager for JATO Dynamics,<br />
a U.K.-based automotive industry research firm.<br />
<strong>July</strong> <strong>2024</strong><br />
40
“In China, the purchase price is important,” she said.<br />
“But for European consumers, it’s not just price, but<br />
total cost of ownership, including maintenance, service<br />
and residual values.”<br />
Ben Townsend, head of automotive at insurance<br />
industry-funded safety group Thatcham Research,<br />
has been working for the past year with Chinese<br />
automakers. Beyond the obvious moves, like<br />
complying with safety regulations and winning high<br />
safety ratings, Townsend said, the Chinese exporters<br />
are delving into far more complex questions of how to<br />
structure warranties and price repairs in Europe, which<br />
has much higher service labor costs than China.<br />
“There are hard rules on issues like safety that are<br />
clear, and then there are soft rules that aren’t written<br />
down,” Townsend said. “The Chinese are very eager to<br />
learn the soft rules.”<br />
The Chinese players are taking a comprehensive look<br />
at what constitutes long-term success in Europe, said<br />
Toby Marshall, managing director at vehicle distributor<br />
IM Group, who manages GWM’s ORA brand in the U.K.<br />
IM Group has previously launched a slew of new<br />
brands in Britain, including South Korea’s Hyundai and<br />
Japan’s Subaru.<br />
“Selling the car is just the tip of the iceberg,” he said.<br />
“There is so much more to understand about keeping<br />
that car on the road throughout its lifetime.”<br />
Ensuring ready access to affordable spare parts is vital.<br />
Marshall said GWM’s U.K. ORA distributor can provide<br />
most parts within 24 hours. And SAIC’s MG has said it<br />
will open a second European parts center this summer<br />
to support growing vehicle demand.<br />
Another critical effort is courting fleet consumers,<br />
who control an unusually large share of European<br />
auto sales. For instance, Ayvens, Europe’s largest<br />
leasing company, already has partnerships with BYD<br />
and Geely. Unlike Tesla, which has undercut its resale<br />
values by repeatedly reducing retail prices, Chinese<br />
automakers are working with companies like Autovista,<br />
which conducts extensive “car-to-market” studies to<br />
set optimal residual values for leasing customers.<br />
Chinese automakers’ main challenge is reaching the<br />
majority of European consumers who don’t know they<br />
exist. That gives legacy carmakers more time to stave<br />
off the threat of Chinese exports, said Phil Dunne, a<br />
managing director at strategy consultancy Stax.<br />
“But the Chinese are fast learners,” he said, “so it<br />
won’t last much longer.”<br />
To boost their brand presence, Chinese automakers are<br />
turning to social media, high-profile event sponsorships<br />
and partnerships with established dealer networks.<br />
One of BYD’s distributors in Italy is Gruppo Autotorino,<br />
with 70 retail locations in 24 provinces.<br />
“Our network allows them to reach clients quickly,”<br />
said Chairperson Plinio Vanini. “This was key for BYD.”<br />
GWM and Chery are partnering with existing<br />
dealerships that also sell other established brands.<br />
Chery’s European managing director, Jochen Tueting,<br />
said the automaker, for its Omoda vehicles, chose such<br />
shared locations “so people say: ‘While I’m here, I’ll<br />
take a look.’”<br />
Because of its scale as China’s leading EV brand, BYD<br />
is launching mostly standalone dealerships and rolling<br />
them out quickly.<br />
<strong>July</strong> <strong>2024</strong><br />
42
Japan automakers including<br />
Toyota hit by testing problems<br />
<strong>July</strong> <strong>2024</strong><br />
Toyota said it had suspended domestic shipments<br />
of three car models after falling foul of government<br />
certification rules along with its Japanese rivals Honda,<br />
Mazda, Suzuki and Yamaha.<br />
The transport ministry told the companies to stop<br />
delivering certain models within Japan after they<br />
reported failures to follow standardised steps to certify<br />
vehicles for shipment.<br />
On-site inspections will also be carried out, it said.<br />
The latest irregularities came to light after the ministry<br />
told 85 automakers and parts suppliers to report<br />
wrongdoing related to certification applications -- an<br />
edict prompted by a safety test scandal at Toyota<br />
subsidiary Daihatsu.<br />
Daihatsu in December admitted manipulating tests<br />
since at least 1989 and halted all factory operations,<br />
dealing a blow to the Japanese economy. Its<br />
shipments resumed in April after the government lifted<br />
a sweeping ban.<br />
“It is extremely regrettable that additional wrongful<br />
acts have been revealed,” which “undermine the trust<br />
of users and shake the very foundation of the vehicle<br />
certification system”, a ministry statement said.<br />
Toyota said it would suspend shipping of the Corolla<br />
Fielder, Corolla Axio and Yaris Cross after reporting<br />
inadequate data in pedestrian and occupant protection<br />
tests. The world’s top-selling automaker said ongoing<br />
internal reviews had also found four other models no<br />
longer in production were “tested using methods that<br />
differed from the government standards”.<br />
Toyota apologised to its customers but assured them<br />
that the vehicles were safe to drive.<br />
Honda said it had found wrongdoing in tests related<br />
to noise and engine power, but also stressed that<br />
its vehicles were safe and had passed corporate<br />
standards. In recent months, Toyota’s truck and bus<br />
brand Hino has been hit by a scandal over rigged tests<br />
of its engines in Japan.<br />
Meanwhile, its affiliate Toyota Industries did not<br />
conduct proper output testing for the certification of<br />
three diesel engine models.<br />
Toyota’s board chair Akio Toyoda said in January it<br />
would “take time to recover the trust back from our<br />
customers” and promised to lead a “transformation”.<br />
44
Number of EVs in Türkiye<br />
could reach 4 million in decade<br />
<strong>July</strong> <strong>2024</strong><br />
The number of electric vehicles (EVs) on Turkish roads<br />
is projected to exceed 4 million units by 2035, while<br />
the number of charging socket points is estimated to<br />
reach nearly 350,000, according to the data compiled<br />
by Anadolu Agency (AA) on.<br />
According to information compiled from the Electric<br />
Vehicle and Charging Infrastructure Projection<br />
prepared by the Energy Market Regulatory Authority<br />
(EMRA), the increase in electric vehicles and charging<br />
points is considered a positive step for developing the<br />
e-mobility ecosystem.<br />
The projection considers increasing the number of<br />
electric vehicles and rapidly expanding the charging<br />
infrastructure throughout the country as a strategic<br />
goal. As a result, Türkiye is projected to reach 4.2<br />
million electric vehicles and 347,934 charging sockets<br />
by 2035.<br />
Electric vehicles are considered to be more efficient,<br />
and that, combined with the electricity cost, means<br />
that charging an electric vehicle is cheaper than filling<br />
petrol or diesel for your travel requirements. Using<br />
renewable energy sources can make the use of electric<br />
vehicles even more eco-friendly.<br />
However, EMRA’s projection includes three scenarios<br />
regarding the number of electric vehicles and charging<br />
infrastructure: low, medium and high.<br />
According to the given projection, the number of<br />
electric vehicles could reach 202,030 in the low<br />
scenario, 269,154 in the medium scenario and 361,893<br />
in the high scenario by 2025.<br />
Moreover, by 2030, this figure is estimated to be<br />
776,362 in the low-case scenario, 1.32 million in the<br />
medium scenario and 1.67 million in the high scenario,<br />
respectively.<br />
By 2035, the number of EVs, on the other hand, is<br />
expected to be 1.78 million in the low scenario, 3.3<br />
million in the medium scenario, and 4.2 million in the<br />
high scenario, meaning most ideal in these terms.<br />
With the rise in electric vehicles and the development<br />
of charging infrastructure, a consequent increase in the<br />
number of charging stations and socket points is also<br />
expected.<br />
In 2025, the number of charging socket points is<br />
calculated to be 34,278 in the low scenario, 46,070 in<br />
the medium scenario and 61,897 in the high scenario.<br />
Five years later, this figure is projected to rise to 85,543<br />
in the first case scenario, 142,824 in the second and<br />
181,274 in the high scenario.<br />
Furthermore, by 2035, the number of charging socket<br />
points is expected to be 146,916 in the low scenario,<br />
273,076 in the medium scenario and 347,934 in the<br />
high scenario.<br />
The projection also anticipates that total electricity<br />
consumption due to electric vehicles will range from<br />
3.98 to 9.39 terawatt-hours (TWh) by 2035.<br />
A period of rapid development in the EV ecosystem<br />
has been visible in Türkiye and around the globe, with<br />
projections of top associations, most recently the<br />
International Energy Agency (IEA), indicating that this<br />
trend is on course to continue in the upcoming years.<br />
IEA said in its report that global electric car sales are<br />
set to remain robust in <strong>2024</strong> and could reach a new<br />
record of around 17 million by the end of this year,<br />
compared to 14 million sold last year.<br />
According to the EMRA, the electric vehicle charging<br />
network infrastructure plays a key role in achieving<br />
energy efficiency and reducing carbon footprint as the<br />
foundation of an environmentally friendly transportation<br />
system.<br />
In addition, Türkiye’s renewable energy potential and<br />
advanced energy infrastructure present an important<br />
opportunity to support the widespread use of electric<br />
vehicles.<br />
Compared to the beginning of last year, when 14,896<br />
electric vehicles were present in Türkiye, this figure has<br />
now climbed to 93,973.<br />
46
China frictions steer electric<br />
automakers from rare earth magnets<br />
As tensions mount between China and the United<br />
States, automakers in the West are trying to reduce<br />
their reliance on a key driver of the electric vehicle (EV)<br />
revolution – permanent magnets, sometimes smaller<br />
than a pack of cards, that power electric engines.<br />
Most are made of rare earth metals from China.<br />
The metals in the magnets are actually abundant, but<br />
can be dirty and difficult to produce. China has grown<br />
to dominate production, and with demand for the<br />
magnets on the rise for all forms of renewable energy,<br />
analysts say a genuine shortage may lie ahead.<br />
Some auto firms have been looking to replace rare<br />
earths for years. Now manufacturers amounting to<br />
nearly half global sales say they are limiting their use, a<br />
Reuters analysis found.<br />
Automakers in the West say they are concerned not<br />
just about securing supply, but also by huge price<br />
swings and environmental damage in the supply chain.<br />
This means managing the risk that scrapping the<br />
metals could shorten the distance a vehicle can travel<br />
between charges. Without a solution to that, the range<br />
anxiety that has long hampered the industry would<br />
increase, so access to the metals may become a<br />
competitive edge.<br />
Rare earth magnets, mostly made of neodymium, are<br />
<strong>July</strong> <strong>2024</strong><br />
48
widely seen as the most efficient way to power EVs.<br />
China controls 90% of their supply.<br />
Prices of neodymium oxide more than doubled during<br />
a nine-month rally last year and are still up 90%;<br />
the U.S. Department of Commerce said in June it is<br />
considering an investigation into the national security<br />
impact of neodymium magnet imports.<br />
Companies trying to cut their use include Japan’s thirdlargest<br />
carmaker Nissan Motor Co, which told Reuters<br />
it is scrapping rare earths from the engine of its new<br />
Ariya model.<br />
Germany’s BMW AG did the same for its iX3 electric<br />
SUV this year, and the world’s two biggest automakers<br />
Toyota Motor Corp of Japan and Volkswagen AG of<br />
Germany have told Reuters they are also cutting back<br />
on the minerals.<br />
Rare earths are critical for the electronics, defense<br />
and renewable energy industries. Because some can<br />
generate a constant magnetic force, the magnets they<br />
make are known as permanent magnets. Electric cars<br />
with these require less battery power than those with<br />
ordinary magnets, so vehicles can go longer distances<br />
before recharging. They were the no-brainer choice<br />
for EV motors until about 2010 when China threatened<br />
to cut rare earth supply during a dispute with Japan.<br />
Prices boomed.<br />
Now, supply concerns are opening a divide between<br />
Chinese EV producers and their Western rivals.<br />
While automakers in the West are cutting down,<br />
the Chinese are still churning out vehicles using the<br />
permanent magnets. A Chinese rare earths industry<br />
official told Reuters that if geopolitical risks are set<br />
aside, China’s capacity can “fully meet the needs of<br />
the world’s automotive industry.”<br />
Altogether, based on sales data from JATO Dynamics,<br />
manufacturers accounting for 46% of total light vehicle<br />
sales in 2020 have said they have scrapped, plan to<br />
eliminate, or are scaling down rare earths in electric<br />
vehicles.<br />
<strong>July</strong> <strong>2024</strong><br />
49
<strong>July</strong> <strong>2024</strong><br />
And new ventures are springing up to develop electric<br />
motors without the metals, or to boost recycling of the<br />
magnets used in existing vehicles.<br />
“Companies that spend tens or hundreds of millions<br />
developing a family of products ... they don’t want to<br />
put all their eggs in one basket – that’s the Chinese<br />
basket,” said Murray Edington, who runs the Electrified<br />
Powertrain department at British consultancy Drive<br />
System Design. “They want to develop alternatives.”<br />
BMW says it has redesigned its EV technology to make<br />
up for a lack of rare earths; Renault SA has slotted its<br />
rare-earth-free Zoe model into a growing niche of small<br />
urban cars that do not need extended driving ranges.<br />
Tesla Inc, the U.S. EV giant whose $621 billion market<br />
value is just below that of the top five automakers<br />
combined – is opting for both types of motors.<br />
“You’re pulling your hair deciding whether you think<br />
supplies will be viable in the future and at what price,”<br />
said Ryan Castilloux of Canada-based consultancy<br />
Adamas Intelligence.<br />
His consultancy expects global consumption of rare<br />
earths for magnets to climb to $15.7 billion by 2030,<br />
nearly four times this year’s value.<br />
EVs and wind turbines<br />
Neodymium is a mighty metal. The neodymium<br />
magnets in a typical EV weigh up to 3kg (6 lb), but even<br />
at 1/12th of that weight, a neodymium magnet can<br />
support steel as heavy as prizefighter Tyson Fury, and<br />
will have about 18 times more magnetic energy than<br />
the standard variety, British magnet company Bunting<br />
told Reuters. Even though the pandemic has dented<br />
auto sales, demand for these magnets in electric<br />
vehicles shot up by 35% last year alone to 6,600 tons,<br />
Adamas Intelligence says.<br />
The permanent magnets in hybrid and EV motors cost<br />
more than $300 per vehicle or up to half the cost of the<br />
motor, analysts say.<br />
Analysts at investment bank UBS expect electric<br />
models to make up half of global new car sales by<br />
2030, up from only 4% last year. The magnets are also<br />
in demand for wind turbines, global installations of<br />
which jumped 53% last year, according to the industry<br />
trade group. Over the past two decades, Western<br />
countries largely withdrew from producing rare earth<br />
metals, which involves complex processing and often<br />
noxious byproducts. Today, China’s dominance runs<br />
through the entire production chain.<br />
“The upstream rare earth supply chain, including<br />
mining and processing, is definitely a big concern,<br />
but when it comes to actual RE magnet production,<br />
China has an even tighter grip,” said David Merriman at<br />
Roskill, a critical materials consultancy in London.<br />
Not enough<br />
For many EV drivers, range anxiety may not be an<br />
issue.<br />
“Most people are driving less than 100 miles a day,<br />
so for that you can have a less efficient motor,” said<br />
researcher Jürgen Gassmann at Fraunhofer IWKS in<br />
Germany.<br />
Even so, automakers in the West have adopted<br />
a range of strategies. Some, like Toyota, still use<br />
permanent magnets but have trimmed use of rare<br />
earths, developing a magnet that needs 20%-50% less<br />
neodymium.<br />
Others, like BMW, have undertaken major redesigns:<br />
The German carmaker told Reuters it overhauled<br />
its drive unit to combine motor, electronics and<br />
transmission in a single housing, cutting down on<br />
space and weight.<br />
“Our goal for the future is to avoid rare earths as much<br />
as possible and to become independent of possible<br />
cost, availability and – of course – sustainability risks,”<br />
said Patrick Hudde, BMW’s vice president of raw<br />
material management.<br />
Tesla started in 2019 to combine engine types. Its S<br />
and X models have two motors: one with rare earth<br />
magnets, one without. The induction motor provides<br />
more power, while the one with permanent magnets<br />
is more efficient, Tesla said: Including a rare earth<br />
motor boosted the models’ driving range by 10%.<br />
Volkswagen also uses both types of motors on its new<br />
ID.4 crossover SUV, it said.<br />
The use of non-rare-earth electric motors is set to jump<br />
nearly eightfold by 2030, according to Claudio Vittori,<br />
senior analyst of e-mobility at data analytics company<br />
IHS Markit. But he said permanent magnet motors<br />
will still dominate, mainly because of their power and<br />
efficiency. If the forecasts are correct, it’s not certain<br />
that even these tweaks can cool the market.<br />
“I think we need these innovations to help balance the<br />
really strong demand growth that we’re looking at,”<br />
Castilloux says. “There’s almost no scenario where<br />
supply will be enough.”<br />
50
China premier calls to ‘oppose<br />
decoupling’ at economic forum<br />
<strong>July</strong> <strong>2024</strong><br />
China’s premier has called for countries to “oppose<br />
decoupling”, as economic tensions simmer between<br />
Beijing and the European Union, a key trading partner<br />
that is preparing to impose new tariffs on Chinese<br />
electric vehicles. Friction between the West and the<br />
world’s second-largest economy has intensified in<br />
recent years, as geopolitical hotspots crop up around<br />
the world and Beijing and Washington compete for<br />
supremacy in advanced technology.<br />
“We should broadly open our minds, work closely<br />
together, abandon camp formations, [and] oppose<br />
decoupling,” said Li Qiang, China’s second-ranking<br />
leader who has been tasked by President Xi Jinping<br />
with managing economic affairs.<br />
Li’s comments came during a speech at the opening<br />
of a World Economic Forum conference known as the<br />
“Summer Davos”, held this year in the northeastern<br />
Chinese city of Dalian.<br />
The premier also called on parties to “maintain the<br />
stability and smooth operation of industrial and supply<br />
chains, promote the liberalisation and facilitation of<br />
trade and investment, guide and promote healthy<br />
global development, and gather powerful efforts for<br />
world economic growth”.<br />
Worries about a disengagement between China and<br />
major economies in the West have rumbled for years<br />
as they clash over a range of issues including trade<br />
and technology.<br />
The United States hiked tariffs on $18 billion worth of<br />
imports from the country, targeting strategic sectors<br />
like electric vehicles, batteries, steel and critical<br />
minerals, a move Beijing warned would “severely affect<br />
relations between the two superpowers.<br />
China is also facing heightened scrutiny from the<br />
European Union, which is preparing to impose<br />
tariffs of up to 38 percent on its EVs by <strong>July</strong> 4, citing<br />
concerns over unfair competition caused by heavy<br />
state subsidies. The duties will be provisional until<br />
November, when they are set to come into full effect.<br />
European leaders including Commission head Ursula<br />
von der Leyen have insisted the bloc does not intend<br />
to decouple from China, seeking instead to “de-risk” its<br />
market as political confrontations with Beijing mount.<br />
China’s government has continuously denounced<br />
the pending tariffs as “purely protectionist”, arguing<br />
that the success of its domestic EV industry is due<br />
to innovation and supply chain efficiency rather<br />
than government support. Beijing has agreed with<br />
European counterparts to enter into negotiations as an<br />
investigation by Brussels into the matter continues.<br />
52
Türkiye imposes additional 40% tariff<br />
on Chinese vehicle imports<br />
<strong>July</strong> <strong>2024</strong><br />
Türkiye will impose a 40% additional tariff on imports<br />
of vehicles from China to halt a possible deterioration<br />
of its current account balance and to protect domestic<br />
automakers, the Trade Ministry said.<br />
China is facing increasing trade pressures worldwide<br />
over its growing exports of electric vehicles (EVs),<br />
which many countries claim are being heavily<br />
subsidized by Beijing to support its sputtering<br />
economy. The additional Turkish tariff will be set at a<br />
minimum of $7,000 per vehicle, with effect from <strong>July</strong><br />
7, a presidential decision published in the country’s<br />
Official Gazette showed.<br />
“An additional tariff will be imposed on the import of<br />
conventional and hybrid passenger vehicles from China<br />
in order to increase and protect the decreasing share<br />
of domestic production,” the Trade Ministry said.<br />
In a statement, the ministry also said the additional<br />
tariff decision was made taking into account deficit<br />
targets and efforts to encourage domestic investment<br />
and production. The decision said if the 40% tariff<br />
calculated from the price of an imported vehicle is<br />
under $7,000 then the minimum tariff of $7,000 will<br />
be charged. It said the additional tariff (IGV) would be<br />
implemented with customs duties on certain goods<br />
imported from non-EU members and countries with<br />
which Türkiye has no free trade agreement (FTA).<br />
The ministry stated that the decision to introduce<br />
these additional customs duties was made considering<br />
economic and commercial developments as well as<br />
sectoral needs. In 2023, Türkiye imposed additional<br />
tariffs on electric vehicle imports from China and<br />
brought some regulations regarding EV maintenance<br />
and services. The decision in question came at the<br />
time when the country’s first domestically produced EV,<br />
Togg, was due to launch sales in the domestic market.<br />
The government is encouraging more production and<br />
exports to reduce the chronic current account deficit,<br />
which stood at $45.2 billion at the end of last year.<br />
The first quarter of the year, however, saw a decline in<br />
the annualized current account deficit which authorities<br />
attributed to the success of the country’s economic<br />
program. The latest decision follows a similar move<br />
by the United States, which recently increased tariffs<br />
on several Chinese-made goods including electric<br />
vehicles and solar cells.<br />
The local auto market contracted by 10.1% in<br />
May when compared to the same period last year,<br />
according to the recently published data from the<br />
<strong>Automotive</strong> Distributors’ and Mobility Association<br />
(ODMD).<br />
Some 100,305 cars and light commercial vehicles were<br />
sold in Türkiye, ODMD said.<br />
In May, Chinese automakers showed varied<br />
performance in the Turkish market, with BYD selling<br />
203 units, Chery selling some 6,208 cars, and MG<br />
selling 2,293 units, respectively.<br />
54
Türkiye’s automotive industry<br />
has been growing dynamically as usual<br />
<strong>July</strong> <strong>2024</strong><br />
The foundation of Türkiye’s automotive industry<br />
dates back to the early 1960s. During a period of<br />
rapid industrialization and progress, this key sector<br />
transformed itself from assembly-based partnerships<br />
to a full-fledged industry with design capability and<br />
massive production capacity. Since 2003, original<br />
equipment manufacturers (OEM) have invested over<br />
USD 17 billion in their operations in Türkiye. These<br />
investments significantly expanded their manufacturing<br />
capabilities, which in turn led Türkiye to become an<br />
important part of the global value chain of international<br />
OEMs. Meeting and exceeding international quality and<br />
safety standards, today’s Turkish automotive industry is<br />
highly efficient and competitive thanks to value-added<br />
production. As part of its commitment to transforming<br />
its automotive industry, which has historically been a<br />
key economic driver in integrating the Turkish economy<br />
with the global value chain, and to its vision of making<br />
Türkiye an economic powerhouse, Türkiye has<br />
introduced its own locally-developed born-electric car<br />
built upon strength stemming from the country’s longstanding<br />
know-how in the area.<br />
Accordingly, Türkiye’s Automobile Joint Venture Group,<br />
known as Togg, will produce five different models<br />
on a joint platform with fully-owned intellectual and<br />
industrial property rights by 2030.<br />
Leveraging a competitive and highly-skilled workforce<br />
56
combined with a dynamic local market and favorable<br />
geographical location, the vehicle production of 8<br />
global OEMs in Türkiye has increased by almost five<br />
times from 300,000s in 2002 to over 1.3 million units in<br />
2022. This represents a compound annual growth rate<br />
(CAGR) of around 6 percent during that period.<br />
• Significant growth posted by Türkiye’s automotive<br />
sector led to the country’s becoming the 13th largest<br />
automotive manufacturer in the world and 4th largest in<br />
Europe by the end of 2022.<br />
• Türkiye has already become a center of excellence,<br />
particularly with respect to the production of<br />
commercial vehicles. By the end of 2022, Türkiye was<br />
the number one producer of commercial vehicles (CVs)<br />
in Europe.<br />
• Proven as a production hub of excellence, the Turkish<br />
automotive industry is now aiming at improving its<br />
R&D, design, and branding capabilities. As of 2022,<br />
156 R&D and design centers belonging to automotive<br />
manufacturers and suppliers are operational in Türkiye.<br />
• Notable examples of global brands with product<br />
development, design, and engineering activities in<br />
Türkiye include Ford, Fiat, Daimler, AVL, and FEV. Ford<br />
Otosan’s R&D center is one of Ford’s three largest<br />
global R&D centers, while Fiat’s R&D center in Bursa is<br />
the Italian company’s only center serving the European<br />
market outside its home country. Meanwhile, Daimler’s<br />
R&D center in Istanbul complements the German<br />
company’s truck and bus manufacturing operations<br />
in Türkiye. AVL Türkiye, which opened up its 2nd R&D<br />
center in Türkiye, develops autonomous and hybrid<br />
vehicle technologies.<br />
• Türkiye offers a supportive environment on the<br />
supply chain side. There are around 1,100 component<br />
suppliers supporting the production of OEMs. With the<br />
parts going directly to the production lines of vehicle<br />
manufacturers, the localization rate of OEMs varies<br />
between 50 and 70 percent.<br />
• Türkiye is home to many global suppliers. There are<br />
more than 250 global suppliers that use Türkiye as a<br />
production base, with 30 of them ranking among the<br />
50 largest global suppliers.<br />
• Auto manufacturers increasingly choose Türkiye<br />
as a production base for their export sales. This<br />
is evidenced by the fact that 73 percent of vehicle<br />
production in Türkiye was destined for international<br />
markets in 2022. Türkiye exported more than 950,000<br />
vehicles to international markets in the same year. In<br />
addition, Türkiye has been the number one vehicle<br />
exporter to European markets for around a decade.<br />
<strong>July</strong> <strong>2024</strong><br />
58
Turkish manufacturing capacity<br />
utilization remains stable in June<br />
The capacity utilization rate of Türkiye’s<br />
manufacturing sector remained broadly<br />
stable in June compared to a month earlier,<br />
according to official data released.<br />
Local manufacturing industry units operated<br />
at 76.3% of their capacity, according to data<br />
from the Central Bank of the Republic of<br />
Türkiye (CBRT).<br />
The seasonally adjusted capacity utilization<br />
rate in the manufacturing industry edged lower<br />
by 0.4 points from May to 76.2% in June.<br />
While the highest capacity utilization was in<br />
intermediate goods at 76.3%, the lowest was<br />
in non-durable consumer goods at 73.6%.<br />
Capacity utilization rate figures are based on<br />
the responses to a business tendency survey<br />
of local units operating in the manufacturing<br />
industry. The central bank said 1,738<br />
companies responded to the survey, and<br />
the data does not reflect the bank’s views or<br />
predictions.<br />
<strong>July</strong> <strong>2024</strong><br />
60
Used car market shrinks 15 percent in January-April<br />
Second-hand vehicles sales declined by 15 percent in<br />
the first four months of <strong>2024</strong> compared to the same<br />
period of last year.<br />
The used car market shrank in the January- April<br />
period as consumers continued to experience<br />
problems with accessing loans. Another reason for<br />
the steep decline in sales was that companies offered<br />
attractive deals in order to deplete their stocks of<br />
brand-new vehicles, which drew potential car buyers<br />
away from second-hand vehicles.<br />
Some 2.2 million used cars changed hands in the first<br />
four months of <strong>2024</strong>, down from 2.6 million a year ago.<br />
Companies in the industry had expected the market<br />
conditions, which started to deteriorate in the final<br />
quarter of 2023, to improve, but those expectations<br />
have not been fulfilled. On the contrary, sales<br />
continued to plunge.<br />
In April, 515,000 vehicles changed hands in the<br />
used car market in April, marking a steep 28 percent<br />
declined from a year ago.<br />
Demand for second-hand cars remains weaker this<br />
year compared with previous years, said Kenan<br />
Belirgen, the general manager at Otomobilen.<br />
Consumers are either buying affordable brand-new<br />
cars or trading their vehicles for low mileage used cars,<br />
according to Belirgen.<br />
Belirgen expects the market outlook to improve in the<br />
second half of the year if interest rates on car loans<br />
come down and consumers have easier access to<br />
loans.<br />
“It is difficult to predict where prices of second-hand<br />
cars would be, but I predict that prices may increase<br />
gradually by the end of the year in line with the inflation<br />
and exchange rates,” Belirgen said.<br />
<strong>July</strong> <strong>2024</strong><br />
62
Turkish unmanned land vehicle<br />
Barkan adopts new payload system<br />
Various capabilities developed within the Turkish<br />
defense industry are coalescing onto the same<br />
platform, transforming into new solutions for security<br />
forces.<br />
The homegrown ecosystem formed in the defense<br />
industry carries out studies by taking into account<br />
developing technologies and needs arising on the<br />
battlefield and user demands.<br />
One example of those efforts was carried out for the<br />
unmanned land vehicle platform.<br />
New payloads were integrated into the unmanned<br />
land vehicle, Barkan, which was recently added to the<br />
inventory of security forces.<br />
In this context, the 40-millimeter Automatic Grenade<br />
Launcher (RDS40-AGL) produced by Repkon Defence<br />
took its place on Barkan with the Trakon Lite Remote<br />
Controlled Weapon System developed by Unirobotics.<br />
After integration works, Barkan was tested in closed<br />
and open areas with its new weapon and remotecontrolled<br />
weapon system and showed a successful<br />
performance.<br />
Barkan, a “medium class level 1 unmanned land<br />
vehicle,” was developed by Turkish defense giant,<br />
Havelsan, as one of the land-based elements of the<br />
“digital unity” concept.<br />
Barkan, which entered the inventory at the end of<br />
2023 after field tests, can overcome difficult terrain<br />
and harsh weather conditions, as well as eliminate<br />
asymmetric threats against security forces with its<br />
features.<br />
Increasing combat effectiveness in high-risk military<br />
missions, Barkan is designed to provide advanced<br />
security in scenarios requiring agility.<br />
It can reach speeds of more than 13 kilometers per<br />
hour (8 miles per hour) and can operate for more than<br />
five hours.<br />
With the integration of Trakon Lite, Barkan will gain the<br />
ability to carry 7.62 and 5.56-millimeter machine guns<br />
and 12.7-millimeter heavy machine guns.<br />
The 40-millimeter automatic grenade launcher is<br />
capable of firing 40x53 millimeter ammunition.<br />
The RDS40-AGL stands out among its counterparts<br />
with features such as being user-oriented, more reliable<br />
and more durable.<br />
<strong>July</strong> <strong>2024</strong><br />
64
Volvo’s electric trucks reach<br />
80 million kilometers in five years<br />
<strong>July</strong> <strong>2024</strong><br />
Volvo’s electric trucks have driven more than 80 million<br />
kilometers or 2,000 laps around the world since Volvo<br />
launched its first electric truck models in 2019. These<br />
trucks have reduced CO2 emissions and at the same<br />
time improved the working environment for drivers<br />
significantly.<br />
New monitoring data for Volvo’s fleet of electric trucks<br />
reveal that they have driven more than 80 million<br />
kilometers in commercial traffic around the world since<br />
2019. Covering the same distance with equivalent<br />
diesel-powered trucks would have consumed more<br />
than 25 million liters1 of diesel and tailpipe carbon<br />
dioxide emissions have been reduced by 68,000 tons2.<br />
“I am happy to see how transport companies are<br />
embracing the benefits with electric trucks in daily<br />
operations. The transport sector represents 7% of<br />
global carbon emissions and battery-electric trucks<br />
is an important tool to reduce the climate footprint.<br />
Thanks to many early adopters we can already now<br />
see the huge potential with this technology”, says<br />
Roger Alm, President Volvo Trucks.<br />
Volvo FH Electric in customer operation - one of more<br />
than 3,500 delivered electric Volvo trucks. Volvo’s early<br />
entry in the electric truck segment has built a unique<br />
expertise in electric zero-emission transport – learnings<br />
that are used in the development of Volvo’s nextgeneration<br />
electric offers.<br />
It pays off to be an early adopter – transport companies<br />
with electric trucks have a strong competitive<br />
advantage when being able to offer emission-free<br />
transport to transport buyers Maximizing the utilization<br />
of the investment in both the electric truck and<br />
charging infrastructure builds a strong business case<br />
for transport companies – by optimizing logistics and<br />
driving routes, and sharing charging facilities between<br />
operators The benefits of electric trucks go beyond<br />
the environmental gains – drivers are experiencing a<br />
significantly better working environment with much<br />
lower levels of noise and vibrations<br />
Volvo Trucks’ global deliveries of electric trucks<br />
increased by 256% to 1,977 trucks in 2023 and the<br />
company sees continued interest from customers in<br />
<strong>2024</strong>. In Europe, more than half of the electric truck<br />
customers chose a Volvo during the first quarter of this<br />
year – Volvo’s share of the electric truck segment was<br />
56%. In the United States, Volvo represented 44% of all<br />
sold electric trucks.<br />
Volvo has so far delivered more than 3,500 electric<br />
trucks to customers in 45 countries on six continents.<br />
During 2023, Volvo Trucks expanded its electric<br />
truck presence as it delivered its first heavy-duty<br />
electric trucks to Latin America, with vehicles going<br />
to customers in Brazil, Chile, and Uruguay. Volvo also<br />
became the first truck maker to deliver battery-electric<br />
heavy trucks in Morocco, South Korea, and Malaysia.<br />
“Not only transport companies but also buyers of<br />
transport- and logistic services are signing up to SBTi<br />
– Science Based Target initiative – and are starting<br />
to demand sustainable transport solutions from their<br />
providers. This is yet another driver of the shift to<br />
electric trucks”, says Roger Alm.<br />
Volvo’s electric trucks meets the needs in a wide range<br />
of applications – from urban distribution and waste<br />
management to regional haul and construction. Over<br />
the five years of electrification, Volvo has also built<br />
a strong expertise in optimizing the use of installed<br />
energy, charging and servicing of electric trucks.<br />
From 2019 until today, Volvo Trucks has gradually<br />
expanded its electric offering to today’s range which<br />
includes eight fully electric trucks.<br />
The Volvo electric truck models on offer are the Volvo<br />
FL Electric, FE Electric, FM Electric, FM Low Entry,<br />
FMX Electric, FH Electric, FH Aero Electric and the<br />
VNR Electric. The top seller is the Volvo FH Electric<br />
which recently was selected for the prestigious<br />
International Truck of the Year Award for <strong>2024</strong>.<br />
66
<strong>Automotive</strong> industry’s exports<br />
hit $3.2 billion in May<br />
<strong>July</strong> <strong>2024</strong><br />
The local automotive industry’s export revenues have<br />
increased 6.3 percent in May from a year ago to $3.2<br />
billion, according to the <strong>Automotive</strong> Industry Exporters’<br />
Association (OİB).<br />
The automotive industry accounted for 13.4 percent of<br />
Türkiye’s overall export revenues.<br />
“This marked the highest monthly export revenue ever<br />
for the automotive industry,” said Baran Çelik, the<br />
board chair of OİB.<br />
Passenger car exports generated $1.12 billion in<br />
revenues, pointing to a 24 percent increase compared<br />
with May 2023, while exports of buses, minibuses<br />
and midibuses rose 35 percent year-on-year to $242<br />
million.<br />
In May, passenger car shipments to Germany and<br />
the Netherlands surged 104 percent and 138 percent,<br />
respectively. The year-on-year increases in exports to<br />
the U.K and Sweden were 60 percent and 90 percent,<br />
respectively, said the association.<br />
Exports to Israel plunged 100 percent compared with<br />
May 2023.<br />
The automotive supplier sector’s shipments to foreign<br />
markets increased by 7 percent annually to $1.4 billion.<br />
Germany was the largest market for the local<br />
automotive industry, with exports to Europe’s<br />
economic powerhouse rising 14 percent annually to<br />
$486 million.<br />
France came in second with $389 million, down 6<br />
percent from May last year, followed by the U.K. at<br />
$330 million, up 21 percent.<br />
In the first five months of <strong>2024</strong>, the automotive sector’s<br />
exports surpassed $15 billion, exhibiting an annual<br />
increase of 5.3 percent.<br />
70