Poor European demand worries auto exporters

ISTANBUL - Hürriyet Daily News

Two new Fiat “Panda” cars are seen as they go on to the production line of the Fiat plant in Pomigliano D’Arco, near Naples Italy on Dec. 14.

Following a year of record sales, Turkish automotive exporters’ concerns grew as debt-hit European economies signal weak growth and poor demand in accordance, said the head of a sector union.

Turkey aims to compensate the loss in exports in the European market with expansion in Russia and South Africa this year, Orhan Sabuncu, chairman of the Automotive Industry Exporters Association (OİB), told the Hürriyet Daily News yesterday.

“Last year’s total export numbers might not be achieved in 2012 due to increasing concerns about the European economic crisis,” said Sabuncu on the sidelines of a press meeting in Istanbul.

European market to shrink

Turkey’s automotive exports hit $20.4 billion by the end of last year. “But the European market representing nearly 72 percent of Turkey’s automotive exports will shrink by 1.4 percent at best this year,” he said.

Turkey’s car exports to Germany rose 27 percent from $2.4 billion to $3.04 billion in the last year. Auto exports to France increased only 4 percent to $2.57 billion last year from $2.47 billion in 2010, while sales to Italy increased 5 percent to $2.25 billion from $2.12 billion.

However, Turkey’s automotive exports to Portugal dropped by 23 percent from $156 million to $120 million last year.

Political unrest also caused a nearly $151 million loss in automotive exports to the Middle East and North Africa last year, according to OİB data revealed yesterday.

Turkey to focus on Russia

“Despite the possible loss in the European markets, Turkey might focus on Russia and South Africa to compensate for a possible slowdown in automotive exports,” said Sabuncu. He said Turkey’s exports to Russia rose by 37 percent from $676 million to $927 million.

“I believe that Russia will also decrease the taxes for Turkey’s automotive exports soon as the country becomes a full member of the World Trade Organization,” he said.

Turkey’s automotive exports will likely reach $20 billion by the end of 2012 and the country’s automotive production will likely drop from 1.17 million to 1.10 million cars this year, said the chairman.
The sub-industries’ exports rose 41 percent to $8.45 billion in 2011 compared to $6.73 billion a year earlier.

“I believe sub-industries will continue to boost exports to alternative markets this year,” Sabuncu said.