|The global auto industry has been affected by the Covid-19 pandemic. / Photo by: Mikbiz via Shutterstock|
The global auto industry has been affected by the Covid-19 pandemic. Automakers from different countries have canceled large events, such as the Geneva Motor Show, sent home workforces, and shut down manufacturing operations as part of their efforts to stop the virus from spreading. Turkey’s automotive industry appears to be an exception.
Turkey’s automotive industry
According to data and analysis firm Cardata, the Covid-19 outbreak did not impact the overall demand for cars in Turkey. It has even maintained its growth expectations for 2020 and the orders that were delayed because of production halt will be reflected in their sales beginning in July. However, the deliveries of the vehicles in Turkey will normalize in July as the car market experiences a sharp growth.
Cardata’s general director Hüsamettin Yalçın states that for about three months, car dealers in Turkey will have issues regarding holding stocks of new vehicles but it would still not affect their annual sales. Yalçın added that because of the deferred demand, growth expectations, and low-interest rate, Turkey’s automotive industry still maintain their estimate of 710,000 car sales this year.
Why there is a high demand for cars in Turkey
Yalçın explained that there is an increase in demand for cars in Turkey as more people opt for personal automobiles than public transportation because of hygiene concerns. The company has also estimated about 160,000 cars to be sold in March and April. Prices of used vehicles have also increased as the country has low stocks of new automobiles. Thus, it paves the way for demand in the second-hand automobile market. The general director warned, though, that prices of cars in the secondary market were only artificially increased by some car owners exploiting inventory shortages.
The global automotive supply chain, on the other hand, is facing major disruption as demand for cars in Turkey rises. Some industrial giants have reduced if not halted their production. This is why the most vulnerable firms rely solely or heavily on factories in China for materials and parts in making their cars.
In February, Fiat Chrysler Automobiles NV announced that it is temporarily halting its production in their car factory in Serbia because it cannot get parts from China, a country where cases of Covid-19 first emerged. After Fiat Chrysler Automobiles NV’s announcement, nearly all other automakers also made their announcement and based their decisions on their available products.
Automotive forecasting sales production LMC’s director of global sales forecast Jonathon Poskitt, who has 15 years of experience researching and analyzing the automotive sector, said via Istanbul news provider Daily Sabah that the impact of the pandemic on the automotive industry has gone beyond the “initial focal point of China,” leading to the downward forecast across major markets. In the United States, the Big Three carmakers General Motors, Ford, and Fiat Chrysler have also temporarily halted their operations, particularly in North America. The Big Three said this in concurrence with the workers union.
The European carmakers that have also shut down most, if not all, of their manufacturing operations are Fiat Chrysler, Peugeot Citroen, Renault, BMW, VW, and Daimler. Japanese automobile manufacturer Nissan and American multinational automaker Ford Motor Company have also closed their facilities in Europe.
Swedish luxury vehicles company Volvo Cars likewise recently said that it will be closing its factories in Europe and the US but have reopened its plans in China.
|In February, Fiat Chrysler Automobiles NV announced that it is temporarily halting its production in their car factory in Serbia because it cannot get parts from China. / Photo by: Daniel J. Macy via Shutterstock|
In Turkey, some businesses and production centers have implemented preventive measures to stop the spread of the new coronavirus, such as temporarily suspending its operations. Yet, other manufacturing firms say they are not expecting disruption in their production as of now and that there has not been any decline in consumer demand.
“We continue our production in two shifts,” Honda Turkey Assistant General Manager Bülent Kılıçer said. Their communication with foreign and domestic foreign suppliers is also constantly continuing. He added that in the event they encounter an issue that will disrupt their production, they will put it on their agenda and then decide accordingly. In line with the instructions of Turkey’s Ministry of Health, the company said in a statement that they are also taking preventive measures and continue to raise the awareness of their workers on the methods of protection.
Tofaş, a joint venture between Turkey’s Koç Holding and Fiat, said in a statement that their production is also not disrupted so far but Toyota Turkey and Ford Otosan already suspended their production until April. Toyota Automotive Industry Turkey temporarily has temporarily halted its production in the northwestern Sakarya province while Ford Otosan said they have to make such decisions because there are already interruptions in their production facilities abroad.
Meanwhile, OYDER Authorized Automotive Dealers Association’s Chairman Murat Şahsuvaroğlu said they have already informed all automotive businesses within their scope of the measures needed to be taken and these businesses did make the necessary actions, such as disinfecting their test vehicles and showrooms regularly. OYDER represents 47 brands in 1010 authorized dealers in Turkey. Şahsuvaroğlu added that they have installed hand sanitizers at the entrances of the showrooms and are taking the temperatures of their visitors before they are allowed to enter since a high fever is one of the primary symptoms of the pandemic.
Automotive production and sales of new vehicles in Turkey
There were a total of 94,991 passenger cars and 40,784 commercial vehicles produced in Turkey as of December 2019. There were also 70,829 passenger cars and 22,018 commercial vehicles sold in the same period. Other new vehicles sold in December 2019, by type, were the following: trucks (2,077), midibus (216), and buses (54). The top makers for passenger cars and light commercial vehicles based on the number of vehicles sold were Fiat (18,396 vehicles, 20.3% market share), Renault (12,591, 13.9%), Ford (10,120, 11.2%), VW (7,780, 8.6%), Dacia (5,885, 6.5%), Peugeot (5,126, 5.7%), Hyundai (3,757, 4.2%), Honda (3,637, 4.0%), Opel (3,238, 3.6%), and Toyota (2,792, 3.1%).
From January to February 2020, the top makers in Turkey based on the number of sold passenger cars and light commercial vehicles were Renault (10,393), Fiat (9,130), VW (8,620), Ford (6,640), Toyota (5,240), Peugeot (4,751), Dacia (4,735), Hyundai (3,304), Citroen (2,709), and Honda (2,539). Sales data was provided by automotive industry portal MarkLines.
Globally, the automotive industry is a major economic force and has almost become synonymous with industrial development in the 20th century. For instance, vehicles are also responsible for almost 50% of the world’s consumption of oil. Measures related to the pandemic will have a significant impact on the industry. This is why the decline of sales and production in the auto industry also spells a downturn in the economy.