The OSD, Turkey’s Automotive Manufacturers Association, recently released production and sales data for 2010, and the results are very surprising. The data shows a recovery well beyond OSD predictions; indeed, the market grew faster than any EU market. 2010 was a record year for the Turkish vehicle market, and one of the country’s best ever for vehicle production. For once, the two are connected.
Total output was up 26% year-on-year to 1,094,557 units. This included an 18% increase in passenger cars to 603,394 units, and a 37% rise in commercial vehicle (CV) production to 491,163, with CVs accounting for 45% (2009: 41%) of production. Add tractors, and output reached 1,124,982 vehicles.
Given the recent global economic turmoil and Turkey’s dependence on exports, the fact that 2009 was a tough year for the Turkish automotive industry was unsurprising; it seems prudent to compare 2010 with 2008, when the country produced 1,147,110 units (1,171,917 including tractors).
2010 was a record year for the Turkish vehicle market, and one of the country’s best ever for vehicle production. For once, the two are connected.
In 2010, the Turkish market (cars and CVs) hit a record 793,172 units. The next-best year was 2005, with 758,537 sales. This includes locally-built and imported vehicles, with the import rate of 59% also at an eleven-year high. Cars accounted for 509,784 units, or 64% of vehicle sales, with light commercial vehicles (LCVs) taking a 32% share (up by 34%), and heavy CVs and buses completing the total.
In March 2010, Dr Ercan Tezer, General Secretary of the OSD, told AutomotiveWorld.com that “it will take some time (for production) to reach the level of 2008”. On sales, he said that “If we retain… demand as it was in 2009 we will be very successful,” adding, “If we manage to keep the same domestic sales in 2010 as in 2009, we will consider this a success. However, we are expecting a drop in sales of 10% compared with 2009.”
2010 ended around only 50,000 units short of the 2008 production total, and the passenger car market was up 38% compared to 2009.
Speaking to AutomotiveWorld.com about the 2010 results, Dr Tezer said that “we were expecting recovery to the levels of 2008 to take much longer. Recovery after our previous crises took approximately four years. Due to lack of demand in the local market, our main focus in the past was on exports, but this time local demand drove our production.” The sales surge occurred in and throughout the fourth quarter. Over the first nine months, the market was up by around 12%, yet it ended up 38%. LCV sales in December 2010 were up 54.1% year-on-year, and the market for cars and vans in December 2010 reached a record high of 154,734 units.
2010 ended around only 50,000 units short of the 2008 production total, and the passenger car market was up 38% compared to 2009.
Domestic sales successes had nothing to do with incentives, which ended in September 2009. What, then, led to this recovery? The growth can be attributed to four factors: strong independent control of the finance and banking system, following the crisis of 2001/2002; the opening up and affordability of consumer credit in the second half of the year; the growing strength of the Turkish lira against the dollar and Euro; and the resultant campaigns by OEMs to take advantage of the strengthening lira, which made imported vehicles attractive and affordable.
The top five importers in 2009 shipped in just over 126,600 passenger cars. The top five in 2010 – Ford, Volkswagen, Opel, Toyota and Peugeot – imported almost 183,000 units. Imports accelerated throughout the year. The top LCV importers in 2010 remained unchanged from 2009, but the numbers were up. Volkswagen, Renault, Peugeot, Citroen and Dacia shipped in just over 39,600 units in 2009, but almost 70,000 units in 2010.
Interestingly, despite 69% of passenger car sales in 2010 being imports, Turkish-built models were two of the three best-selling vehicles in Turkey in 2010: the Renault Symbol (first place), and the Hyundai Accent Era (third). The Ford Focus ranked second.
The growth in the market also bucked purchasing trends. The mainstream A, B and C-segments continued to dominate sales (82%) with the C-segment at 42% of the total market, and the B-segment at 40%. Sedans retained their 49% share, with hatchbacks totalling 36%. However, diesel engine sales rose by 69%, accounting for 54% of new registrations, and automatics rose by 48% to take 31% of sales.
For as long as the factors behind 2010’s success remain unchanged, or improve, Turkish car buyers will be able to afford new cars and keep the market steady. And (in the short term, at least) that’s good news for Turkey’s vehicle plants.
Can this success continue into and beyond 2011? According to Dr Tezer, “2011 will be the same as 2010. Local demand may grow by 10-15%, but exports to the EU will be limited because of macro-ecomomic conditions.” A spokesperson at the Turkish Automotive Distributors’ Association, ODD, told AutomotiveWorld.com that “economic data points to growth for this year. Although there are risks due to external developments, we expect a positive direction for our economy.”
Turkish drivers are renowned for keeping their cars longer than other European drivers. However, the changes in consumer credit have had a clear impact. For as long as the factors behind 2010’s success remain unchanged, or improve, Turkish car buyers will be able to afford new cars and keep the market steady. And (in the short term, at least) that’s good news for Turkey’s vehicle plants.
