Local carmakers may suspend production in May, June

Taylan Özgür Dil- ISTANBUL

Carmakers in Turkey may be forced to suspend production in May and June because of the supply problems that occur due to lockdowns China is imposing to bring the COVID outbreak under control.

In April, many factories in Shanghai halted their operations, while long delays at the port in the city caused challenges, people from the industry said, adding that those factors are likely to exacerbate the problems in the global supply chain.

Carmakers in Turkey, which are already facing problems, such as semiconductor and raw materials, are closely watching the developments in China, and the summer months for car producers will not be easier.

The latest news from Shanghai shows that the situation has become unmanageable, said executives from the companies operating in the automotive supply industry.

They also said that because of the decline in the volume of deliveries and the rising prices, the companies reached a point where they could not make a profit, adding that they will have problems supplying parts to the main automotive sector in May and June.

They voiced concern that the issues related to the semiconductors are likely to continue in the period ahead because of the lockdowns in China.
People from the industry said that companies, which produce passenger cars, are expected to temporarily halt their operations in May and June.

Carmakers Renault, Tofaş and Hyundai may be affected more, but Toyota can continue its production activities, they said.

Renault last month already partially suspended production.

Production declined in March

The latest data from the Automotive Manufacturers’ Association (OSD) showed that the automotive sector’s production in Turkey declined by 13.7 percent on an annual basis to around 107,000 units in March.

The passenger car output fell by 23.9 percent in the month from a year earlier to 57,000 vehicles.

The businesses group also reported that total vehicle sales in Turkey plunged nearly 32 percent in March from the same month of 2021 to 68,000 units, with passenger car sales declining more than 34 percent on an annual basis to 50,000 units.

The industry’s export revenues, on the other hand, declined by 6.9 percent from a year earlier to $2.7 billion.

In the first three months of 2022, local carmakers produced a total of 303,000 vehicles, which marked a 12.4 percent drop compared to the same period of 2021.

Passenger car production in the first quarter was down 21.5 percent to 166,000 units.

The auto market shrank 23 percent. A total of 160,000 vehicles were sold in January-March. The sales of passenger cars fell more than 25 percent to 117,000 units in the first three months of 2021.