Dear Friends,

In this article, I would like to mention briefly the condition of authorized dealers who are of the vital importance in shrinking automotive market.
In this year , automotive sales were slumped so far by around 50% compared to last year. The latest forecasts put forward with an optimistic estimate that 2019 would give around 400 thousand sales including heavy vehicles. That shows how big shrinkage is after one million annual sales of three consecutive years in average up to last year. All supply systems are organized accordingly.Of course this gloom is not easy to digest for a sector. All the rings of the automotive value chain have to resist in this contraction.
One of the most important rings here is undoubtedly the sales and service organization, namely Authorized Dealers who represent global automotive brands throughout the country. No doubt that they have to be able to withstand this serious contraction since they have made huge investments in their region and have an important labor force with employment capability.
So, can they find their stamina? What are they doing?

My Dear Friends,

In general, we are talking about a party that has to use its resources carefully with limited working capital. Those who invest in compliance with the commercial policies of global brands with their own resources are not that much. The usual trend is to cooperate with banks. They use credit with comparatively high cost. To summarize, they’re struggling to survive. In this case, how will it be possible for them to protect their business capital?
At this point, the remedy is through government, financial institutions and global brand managements being hand in hand with authorized dealers.
We observe government support in incentives. For example, VAT and SCT support are still being applied up to the end of June. Now, there is a necessity to continue till the year end. I certainly hope so. Another current incentive is a scrapping scheme. However, to review the scrap application is obviously beneficial to all parties as I mentioned in my previous article.
Global brands have to be in a hurry to put their central administrations in place. Bearing in mind that , the market in our country has provided them with years of income and profit. For example, with the support of the so called consignee, global brands can help their dealers to overcome this tough period by strenghtening their working capital. Brand managements can adapt prices and product policies to these difficult periods and provide a fair income sharing.
Financial institutions can also take steps to solve individual credit demands in decreasing sales at as fast, positive and low cost as possible. As known, local customers could own car with installments they can afford for months. That only depends on the appropriate loan solutions at the end.
We were able to prevent the severe contraction in the years 2001 and 2002 by working shoulder to shoulder in this way.
Now of course the circumstances are different . But the sector is more equipped and powerful. They can overcome this period with this power as long as they are in mutual understanding and solidarity. Let’s not forget that we’re all on the same boat.

See you in my next articles,