Hakan Tiftik, Chairman of the Board of Directors of the Automotive Distributors and Mobility Association (ODMD), evaluated the contraction in the automotive sector, access to financing problems and year-end expectations in the Bloomberg HT broadcast.
According to ODMD data, the automotive market shrank by 31 percent annually in October, falling to 80 thousand 334 units. In the same period, automobile sales decreased by 28 percent, while light commercial vehicle sales decreased by 40 percent.
Stating that the real contraction in the automotive market started after July, Tiftik said that the expected seasonal activity was not observed despite the campaigns in September and October. "We saw the highest decline of this year in October. The decline in light commercial vehicle sales approached 40 percent. It is thought-provoking to experience a contraction of this scale at the opening of the season, when commercial activity is expected to increase," he said.
Explaining that they revised their year-end expectations downwards, he said, "We reduced our sales expectation from 1 million 150 thousand units at the end of the year to 1 million 100 thousand. However, if the realization in October continues, the market will fall below 1 million units at the end of the year."
“Those who want to sell their vehicles and turn into cash come to the fore.”
Stating that the developments in the capital markets also have an impact on automotive demand, Tiftik said that consumers have started to postpone their purchasing decisions.
Pointing out that the contraction in the market also poses a risk in terms of employment, he stated that if the decline in sales continues at current levels, it may become difficult for the sector to maintain its employment structure. "In such an environment where there is a 30 percent contraction, it may not be possible to continue with the current employment rate," he said.
“We are waiting for vehicle loan limits to be updated”
Emphasizing that access to finance in the automotive industry is one of the most important factors determining sales, Tiftik said that credit conditions continue to suppress demand. Pointing out that financing penetration has fallen below 52 percent, he stated that vehicle loan limits have not been updated for four years. Auto loan limits haven't been updated in four years. "We expect these limits to be updated," he said.
Tiftik stated that Special Consumption Tax (SCT) base scales should be rearranged in parallel with the change in economic conditions.
“It is too early to talk about Volkswagen investment”
Evaluating the positive statements of the Minister of Trade Ömer Bolat regarding the possibility of Volkswagen investing in Turkey, Tiftik said that a new automotive investment would be an important gain for the sector, but it was too early for concrete developments. “I am sure that many brands conduct feasibility studies from time to time. "The important thing is to conclude these studies," he said.
“It wouldn't make sense for Europe to stay outside of Made in Europe.”
Making evaluations about the European Union's "Made in Europe" approach, Tiftik drew attention to Turkey's position in the European automotive ecosystem. He stated that he found the contacts between Türkiye and the European Union sufficient and that important work has been done on this issue. “It wouldn't make sense for Europe to stay outside of Made in Europe,” he said.
“Electric and hybrid vehicles give hope”
Stating that interest in electric and hybrid vehicles continues to increase despite the general contraction in the automotive market, Tiftik said that low-emission vehicles differentiate positively in the sector.
“Electric and hybrid vehicles give us hope. Because there is a decrease in numbers, but we have seen a significant increase in percentage. "Interest in low-emission vehicles is increasing in Turkey," he said.
Evaluating the increase in the share of electric and hybrid vehicles in the market positively, Tiftik stated that this change in consumer preferences is important for the future of the automotive industry.
