Automotive Industry Association SCT Statement

During the first six months of the year, Turkish automobile production increased by 2% compared to the same period of the previous year and amounted to 649 thousand 311 units. During the same period, total automotive exports increased by 1.2% on a unit basis to 466,000,995 units. During the January-June period, the total market decreased by 9% compared to the previous year and amounted to 375,000,683 units.

Cengiz Eroldu, Chairman of Automotive Industry Association (OSD), who assessed the Turkish automotive industry’s half-year results and current developments in the automotive industry, also made remarkable statements on the problems faced by industry.

Discussing developments in global markets, the impact of the contraction of the European market on Turkey and current economic policies, Eroldu also gave a clear message on the reduction of the Special Consumption Tax (SCT), which many are waiting for. impatiently.

Stressing that it is unrealistic to expect a reduction in the TBS applied to automobiles under current conditions, Eroldu said: “In my opinion, when the demand is so high and you consider the economic results , it is not very realistic to expect SCT reduction. If consumer demand drops, there may be an expectation in that direction. In fact, SCT reduction is a short-term solution, a holistic perspective is necessary to enlarge the internal market.

“THE SECOND HALF WILL BE DIFFICULT”

It would be useful to consider the other messages OSD Chair Eroldu gave after his statement on the TBS.

Noting that the first 6 months of the year have been positive for the industry, Eroldu warned that negative developments could occur in the second half.

Eroldu said: “We have forecasts that we will experience a negative picture in the next 6 months. Rising inflation in Europe and falling numbers could cause a problem for the Turkish automotive industry on the side of exports.” It looks like it will lead to a better result. Therefore, the second half will be a bit more difficult,” he said.

‘PARITY DUE TO LOSS OF 1 BILLION DOLLARS’

Cengiz Eroldu also spoke about the difficulties faced by the automotive industry.

In this context, Eroldu said that demand and production figures in Europe had fallen due to both the chip crisis and inflation, and drew attention to the change in the euro parity -dollar.

Eroldu said: “The upward movement of the dollar parity and our exports mainly to the European region lead to a loss in the ranking of sectoral exports. According to OIB figures, there is a loss of 1 billion dollars in the first 6 months due to parity.”

Stating that a very large part of exports is destined for the euro zone, Eroldu said: “But all the world commodity prices are in US dollars. In fact, it is not a good thing for the country and the economy. auto industry to reach this level of If the peg stays at this level, we expect Turkey’s external trade balance to be negatively affected,” he said.

Cengiz Eroldu said one of the important issues for the industry is rising raw material prices. Eroldu said, “Apart from that, there are price increases approaching or even exceeding 100% in commodity prices. There is very significant pressure on costs in all branches of industry, in all sectors. We try to manage that somehow.

“WE MUST NOT TAKE AWAY THE FREE MARKET ECONOMY”

OSD Chairman of the Board, Cengiz Eroldu, also mentioned that the current monetary policies are negatively affecting the industry.

Eroldu said: “Unforeseen fiscal policy regulations in Turkey are starting to create problems in the automotive industry. The monetary regulations taken by the Central Bank and the Ministry of Finance are making the work of industrialists and exporters a bit difficult. The largest of these is 40% of export value in TL.”There are currently problems with Turkish lira loans provided by Eximbank. Like limiting the use of TL loans by companies with foreign currency assets,” he said.

Noting that the measures taken have harmed the investment environment, Eroldu said: “These are issues that complicate the environment for new investors to come to Turkey. We should not stray too far from the conditions of a free market economy. This poses some difficulties for the automotive industry as well.”

“NEW INVESTMENTS MUST IMPROVE THE DOMESTIC MARKET”

Stating that there were 2.6 million global losses due to the chip crisis in 2022, Eroldu said the biggest loss was in Europe with 350,000 units and that the crisis in question would continue into 2023.

Eroldu also shared the roadmap that should be followed for Turkey to maintain its competitiveness and said export markets should be diversified in this context.

Eroldu said, “With the drop in demand in Europe, Turkish exporters have to turn to new export markets, including the automotive industry.”

Eroldu also said that the incentives were not enough to attract investment to Turkey and said: “Certainly, the potential of the Turkish market, the domestic market should be revealed better. For new automotive investments to come to Turkey, the domestic market needs improving.”

Explaining that the shrinking European car market is a threat to the Turkish car industry, Eroldu said: “Overcapacity has arisen in car factories in Europe. We need to protect existing investments while pursuing new investments on the one hand Empty capacity of factories in Europe is a threat for Turkey: “Even if there is an increase in inflation in the world, producers are forced to produce at lower cost. This can be seen as an opportunity for Turkey,” he said.

‘PARKING MUST BE RENEWED’

Pointing out that an important issue in Turkey is the age of the vehicle fleet and fuel efficiency, Eroldu said, “We are of the view that these issues should also be addressed with holistic policies.”

Mentioning that the car fleet in Turkey is around 21.5 million, Eroldu said, “Our average age in cars is 13.6 years. In light commercial vehicles, it is 13.1 years. In heavy duty vehicles it is 17 years, in tractors 24.3 years. Therefore, we have a fairly old park. . Half of the park is over 11 years old. It is mainly 2000 years old. Vehicles that have taken the road from Turkey. Today, vehicles that were on the road before 2000 constitute 48% of the vehicle fleet, and these vehicles constitute 80% and 90% of environmental pollution. This shows the natural problem. Environment and energy efficiency For this reason, studies should be carried out to rejuvenate this fleet of 21.5 million vehicles in Turkey,” he shared.

#Automotive #Industry #Association #SCT #Statement

Leave a Reply

Your email address will not be published.