Auto sector troubles grow

Hurriyet Daily News with wires

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The suspension of the production line at the company, which is the Ford Motor Co.'s unit in Turkey, will start this Saturday and continue until Jan. 12, reported daily Hürriyet.

The news comes after the Automotive Manufacturers Association, or OSD, revealed Turkey’s entire vehicle market had shrunk 58 percent, while the automobile market contracted 56.6 percent in November. The total vehicle market narrowed 8.7 percent during the first 11 months of the year, according to the OSD data, while the auto industry dropped 5.3 percent during the same period. Exports also continued to decline in November. As European markets continue to shrink, total vehicle exports from Turkey declined 41.7 percent, while automotives export declined 44.4 percent. Some 90 percent of Turkey’s vehicle exports were addressed to Europe, whose automotive market narrowed 25.8 percent in November.

Meanwhile, also a result of rising anxiety in the industry, Honda froze plans to increase capacity in Turkey, reported daily Milliyet. The company had to revise its growth targets due to declining demand caused by the U.S. dollar’s extensive appreciation against the yen, said Başkanı Takeo Fukui, president of Honda Motors. The company has also postponed plans to conrtuct a new factory in India, he said. Other Japanese automotive giants such as Toyota and Suzuki have also made similar decisions recently. In another development, Tofaş Türk, Fiat's Turkish unit, announced yesterday it will halt production between Dec. 27 and Jan. 12.

Mercedes-Benz’s truck production company in Aksaray, western Turkey, has also suspended production for five weeks. Some 160 workers of the factory will leave their jobs permanently, with six months salary paid in advance.