Turkish automotive sector to apply brakes in 2005

Turkish automotive sector to apply brakes in 2005

The Turkish automotive sector broke records in sales, production and exports in 2004 despite increases in the special consumption tax and the cut in scrap discount on cars. However, Turkey’s Automotive Manufacturers Association (OSD) anticipates that the automotive sector will hit a slowdown this year. Overall production will drop 3% to 800’000 units. Automotive sales are projected to decrease 14% to 650’000 units. Exports, which rose 44% last year, are expected to increase only 10% this year to 560’000 units. Export turnover of $11-12 billion is anticipated for 2005. The global automotive sector has turned away from Western Europe and is now looking to the south or east to orientate itself. Turkey’s main competitors at present are Poland, Czech Republic, Slovakia, Slovenia, Romania and Russia, while India, China and Iran are waiting in the wings to challenge Turkey and the others. In such a competitive market Turkey must maintain its steady domestic politics and economic policies in order to strengthen its position. The Turkish automotive sector is on the path of the eastern market, following the likes of Poland, Slovakia, Czech Republic, Romania, Slovenia and Russia. French carmaker Peugeot announced a $700 million investment in Slovakia. South Korea’s Kia and a German gear company also indicated they would invest $700 million and $400 million respectively in Slovakia.