Dear friends,

The Automotive Distributors Association (ODD ) announced its September 2019 passenger and light commercial vehicle sales report for Turkey.

September 2019 sales show an 82% increase compared to September last year. The 101% increase in passenger car sales is the main sweeper of increase.

When we look at the first 9 months of the year, there is a 39% contraction in sales. But low interest rates support of below 1% by state-owned banks seems to boost the sales of locally produced cars until the year end. Thus, sales would reach 500 thousand for 2019 . If private banks join this support package, sales could rise further in last quarter . Let’s not forget that our country has an annual sales performance of 1 million units for 3 consecutive years recently. The 2019 sales figures we expect will only be half of that average. So it would take a lot more to get back to those reviving days.

We received another happy news right after that. The German VW brand announced that it has set up a company in Manisa with a capital of £ 943.5 million to manufacture motor vehicles. There is no official announcement yet but what we learn that the VW brand will invest € 1.4 billion in Manisa. So much so that the production capacity will be 300 thousand units per year initially.

Dear friends,

While sharing this joyous news, I would like to draw your attention again to a point that I mentioned in my article dated Feb 14, 2019 .

According to KPMG report that I mentioned that time in my article, the share of automotive production in EU countries will decrease to 5% in the period 2030 – 2040. In other words, the share that the EU will receive from the annual global production of 100 million units will be only 5 million. EU countries producing 18 million units a year will shift their production lines to other countries.

The step taken by VW is obviously the part of this plan. You may remember that Honda has also announced the shut down of its production plants in EU by 2021.

I’m sure we’ll see similar decisions in other automotive brands soon. How much can we, as Turkey, manage to take part this great change? Will we be able to attract high value added investments to our country where we can take the intellectual and industrial property right into our hands? Where will we be in this technology transfer when EU countries want to be the development centre of driverless vehicle technologies? Will we be able to see technology development centers in our country without being a subcontractor ? Or will we continue to keep producing motor vehicles that will  only consume fuel for years?

We have to make our strategy plan to answer these questions urgently. Because we only have 20 years.  Today, after 22 years since 1997, we are talking about the direct investment of a new global automotive brand. We won’t have that much time for any more direct investment in automotive sector.

See you in my next article,

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