Dear Friends,

Yesterday, Automotive Industry Export figures for August 2019 were announced by Anadolu Agency. The automotive export figures based on Uludag Exporters Association (UIB) reveal an increase of 8% in August amounting to $ 1.7 billion. That makes the automotive sector ranked first with its 13% share in exports, Our Automotive Industry therefore achieved the second highest August performance in its history. Total export revenue in the first 8 months of this year was $ 20 billion.

When we look at the details of the figures, we see that revenue growth in passenger car exports remained at 1%. On the commercial vehicles side, the increase was 37%. A significant share of trailer export revenue, which increased by 51%.has the outstanding contribution.

Our export revenue to the EU market, which is our biggest export market, increased by 10% amounting to $ 1.255 billion. Amongst EU countries, our exports to the Netherlands increased by 79.5%. France has a significant contribution to our exports with an increase of 26.5%. Italy received an 18% increase. On the other hand, our export income to Germany has decreased by 0.4%.

European countries are actually experiencing a contraction in total motor vehicle sales this year. The first half sales fell by 1.9%. The 3.1% loss in passenger car sales is the main reason. However, sales of commercial vehicles rose by 3.9%. Therefore, we must underline that the increase in our exports stems mainly from the export of commercial vehicles.

More important than above is sustainable growth in export..That apparently necessitates higher added value and more know-how.

Now let’s briefly look at our domestic market as of August. Total domestic market sales sharply fell by 45.66% in the first eight months of the year, said ODD report last week. In short, our domestic market has shrunk by almost half by 2018. Now, we’re about to enter the last period of the year, We are yet to see any tangible improvement in the revival of the domestic market .

In fact, 72% of our automotive exports are made to EU countries. Automotive brands having production plants in our country mainly produce for EU countries. So, as we work to increase exports to EU countries, these brands are trying to sell their other products produced elsewhere to our market. A matter of balance exists here. Those motor vehicles produced in the hands of own workers and engineers must sell in our country since the investor brands keep relying on our domestic market. As a former automotivist who worked for years to attract automotive investment to our country, I am once again obliged to repeat this point. Okay we make mass production of thousands of domestic cars, but all of the cars we produce carry the symbols of foreign brands, are sold to foreign markets by them. We then become happy by exporting more that million motor vehicles a year.. Because we produce them with better quality and more economically as being more competitive. But not only is that enough, We must also capture sales volume in the domestic market that makes us more competitive as a scale. As long as our domestic market is weak, these brands would inevitably shift their new model production to other suitable countries. Consequently,our automotive sector which is our export locomotive providing qualified labor force, may lose this advantage.

So how do we revive the domestic market?  As I mentioned in my previous articles, we need to enrich our country with production, not with consumption. We should increase our income per capita to the level of the turnkey price of a base car. I’m talking about the level above $ 16 – $ 17k. Of course, this is not an immediate short-term issue. But in the short term, if the confidence exists in local market and the credit interest rates are about 1% per month with the support of the automotive brands and our banking system, why not positive upturn in sales?

The inflation and credit interest rates will both be outstanding issues in the coming months. We all look forward to having reviving sales volumes in the last quarter as we get used to. I hope the conditions for the citizen are visible with trust for future without further delay.

PS. You may follow my articles on motor1.com and otomobilhaber.com.tr as well.