Will the measures announced on December 25 in Turkey stop the decline in the local automotive market? While in a country on the verge of recession , the government has decided on Tuesday to raise the minimum wage by 26%, builders begin to do their accounts. In the first eleven months of the year, sales of new vehicles in the country fell by 34%. In mid-December, LMC Automotive forecast a similar decline over the year (to 626,000 units).
The emergency measures taken last month have nevertheless made it possible to limit the damage. After the plummet of the Turkish lira and soaring inflation in August , the sales curve had turned into a disaster. “The depreciation of the local currency had increased the price of cars, while at the same time the jump in interest rate has made it more difficult for consumers to access credit, “says Carol Thomas, an analyst at LMC Automotive. As a result, registrations collapsed by 68% in September and by 77% in October.
Disastrous prospects
Announced in early November, the reduction of the tax on passenger cars and the decline of VAT on light vehicles helped limit the fall in November to -42%. As the renewal of these measures next year has still not been announced, the market should also be maintained in December.
“We are more optimistic about 2018 than a few weeks ago,” says the analyst. On the other hand, the outlook for 2019 remains rather disastrous. In mid-December, LMC Automotive expects 448,000 sales in 2019, while the market approached one million units last year (954,500). That is, a collapse of almost 50% in two years.
For Western manufacturers, this tumble is not neutral. In particular for the Renault group, the market leader with nearly 180,000 sales last year (19% of the market with Dacia). By presenting the group’s quarterly results at the end of October, financial director Clotilde Delbos has already indicated that the fall in emerging markets (Turkey, but also Iran and Argentina) would have an impact on the accounts of the year.
Historical exports
Like many other foreign groups (Fiat, Ford or Toyota), the Losange has a giant factory in the country with his partner Oyak, in Bursa, where he produced 310,000 Clio last year, and nearly 600,000 engines. The group also plans to produce almost all the volumes of the new Clio, scheduled for 2019.
Enough to boost Turkish auto exports: the collapse of the domestic market and the fall of the pound has allowed them to reach a record high over the first eleven months of the year, while local production limited its decline to – 8% over the period.