Automotive Expotrs November 2022

Recession risks in Europe pose
threats to auto sector
Worst is over for the Turkish automotive
industry in terms of supply problems
but now recession risks in Europe pose
challenges to local carmakers, said Cengiz
Eroldu, president of the Automotive
Manufacturers’ Association (OSD), calling
for measures to boost demand in local
market.
“We are more optimistic about supplies
in the final quarter of this year and
believe that we will be affected less from
those problems,” Eroldu told reporters in
Istanbul.
Even though the situation is likely to
improve in 2023, bottleneck issues will
continue, he added.
Exports of the local automotive industry
may decline next year, Eroldu said.
“In the face of this potential threat, local
market should be supported. Problems
with accessing financing should be
resolved. For instance, companies cannot
renew their car fleets due to financing
issues. This is one of the major problems
facing the automotive industry,” he
explained.
Eroldu also called for the reassessment
of tax system on vehicles. Almost all new
cars are subject to 80 percent of special
consumption tax, which impacts the
purchasing power of potential car buyers,
Eroldu explained.
“In order to support the local market
against the contraction risks in the export
markets, some steps should be taken
[regarding financing and tax].”
Local carmakers export nearly 65 percent
of their products to the eurozone
countries.
In January-September, the automotive
industry’s total production increased by 4.4
percent from a year ago to 962,000 with
passenger car output remaining almost
unchanged on an annual basis at 571,000
units, the OSD said.
Total vehicle sales were down 5.6 percent
to 550,000 and passenger car sales
dropped 8.2 percent in the first nine
months of 2022.
Export revenues amounted to $22.7
billion in January-September, marking a
4.6 percent year-on-year increase, but
passenger car exports fell by 3.3 percent to
$6.4 billion.
In September alone, the industry’s output
leaped 20.5 percent, while the local
market expanded 11 percent. Some 45,000
passenger cars were sold , according to
data from the OSD.
Eroldu forecast that the local automotive
industry’s production will increase by
somewhere between 8 to 15 percent in
2022 compared with 2021 to 1.4 million
vehicles and that exports will rise around
11 to 17 percent to 1.1 million.
Meanwhile, carmaker Toyota will invest
some 7 billion Turkish Liras ($377 million)
in its plant in the province of Sakarya to
expand its capacity to produce plug-in
hybrid vehicles and batteries.
With the investment, which is expected to
be completed in four years, the capacity of
the plant will increase to produce 162,000
hybrid vehicles and 44,000 batteries
annually. When the expansion investment
is completed, the plant’s annual production
capacity will rise from 280,000 to 442,000
cars and an additional 52 jobs will be
produced.
According to a decision published in the
Official Gazette, for this investment, Toyota
will receive incentives, including customs
duty exemption, the value-added tax (VAT)
exemption, VAT refund and tax reduction.
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