Turkish automotive sector beating 1 million milestones

Taylan Özgür Dil – ISTANBUL

The automotive sector will exceed the "1 million" threshold in all three production, export and sales figures in 2023, the 100th anniversary of the founding of the Republic of Türkiye. According to the latest data shared by Cengiz Eroldu, president of the Automotive Industry Association (OSD), the total automotive production will reach 1.5 million units and exports will reach 1 million units by the end of the year.

Sales will exceed 1.15 million units. With these results, the automotive market will break the historical record by exceeding the 1 million mark for the first time in history. Production and exports will catch up with 2018, but will be slightly behind the historic year of 2017, when 1.6 million units were produced and 1.1 million units were exported.

"The 60-year-old automotive industry, which has grown with the republic, now operates with a capacity of 2 million units in 17 production facilities," said OSD President Cengiz Eroldu at a press conference held in Istanbul last week to present the latest figures on the sector.

"We are using 1.4 million units of that capacity. We have 13 members, and the members have 15 R&D centers. As a sector, we invest $1 billion annually and create jobs for more than 500,000 people. We continue to contribute to Türkiye's economy with annual exports of $30 billion and we continue to be the leader in this field."

By the end of 2023, total automotive exports could reach $35 billion, Eroldu said, noting that automotive production exceeded 1 million units in the January-September period.

"Both the growth of the domestic market and the growth of exports support the numbers of the automotive industry in 2023. We have broken the 1 million production barrier in the first nine months. This means that we have returned to our production figures before the pandemic."

Regarding vehicle sales, Eroldu said that while they foresee a 10 percent decline in the overall market in 2024, they do not expect a similar decline in production and exports.

"We are hopeful on the export side, we think exports can cover the loss in the domestic market," he added.

Emphasizing that the automotive sector has been a foreign trade surplus sector for many years, Eroldu said the situation has worsened this year.

"The share of domestic producers in total vehicle sales, which was 45 percent last year, has unfortunately dropped to 37 percent this year. The most important factor is the car. In automobiles, we have a domestic share that has gone from 39 percent to 31 percent. This is a situation that we do not want at all. Unfortunately, the sector that gives a surplus of $10 billion is at the level of minus $318 million according to the first eight months figures, which will grow even more in September. The last negative value was realized in 2015 with minus $195 million."

Eroldu reiterated that the Special Consumption Tax (ÖTV) base should be updated to increase the domestic share of the market and to give consumers access to affordable vehicles.

As of June, all cars sold in Türkiye entered the ÖTV base limit of 80 percent.