Automotive exports may climb to $34 billion this year: Report

ISTANBUL

The Turkish automotive sector’s export revenues may climb to $34 billion this year, according to a report by KPMG.

Last year, the local industry produced 1.3 million vehicles and sales on the local market amounted to 827,000 while 970,000 vehicles were shipped to foreign markets.

Data from the Automotive Manufacturers’ Association (OSD) showed that export revenues of Turkish carmakers increased by 5.5 percent last year compared with 2021 to stand at $31.5 billion.

The industry’s exports have exceeded $20 billion in the first seven months of 2023, rising 16 percent from the same period of last year, according to the Turkish Exporters’ Assembly (TİM).

The automotive sector accounted for 16 percent of Türkiye’s total exports in the January-July period.

The KPMG report noted the availability problems in the auto market due to the semiconductor shortages, coupled with the special consumption rates depressed domestic demand in 2022.

However, the local auto industry appeared to have overcome this availability problem.

In July, the combined sales of passenger cars and light commercial vehicles (LCV) leaped 115.4 percent from a year ago.

Passenger car sales grew more than 109 percent to around 86,000, while LCV sales soared almost 138 percent to 27,000.

Experts said that carmakers were able to deliver the orders to their customers last month, which partially explained the surge in sales.

Consumers also decided to buy now, anticipating that the car prices will increase in the coming months due to the depreciation of the Turkish Lira, which led to a sharp rise in vehicle demand in July, according to experts.

Demand has been strong over the past months also because people purchased cars as an investment to protect their savings against inflation. Those, who cannot buy a house, which is a favorite investment among Turks, due to exorbitant property prices, turned to cars, said experts.