The automotive sector’s new plan for 2005

Automotives started the year very well and by the end of May the sector had grown by 12 percent when compared with the same period in 2005. But the concerns on the markets created by the sudden appreciation in the value of foreign exchange had a negative impact on domestic demand. But, despite this unfavourable atmosphere, automotive manufacturers are hopeful about this year. When Capital brought together the top executives from the manufacturers active in the automotive sector they said that they believed that the market would pick up again from September.

Alfredo Altavilla: “Everything Will Go Well From September Onwards”

Tofaş CEO Alfredo Altavilla believes that if the exchange rate and consumer loan interest rates remain at their current levels then the result will be a negative impact on demand. He believes that the market will begin to pick up from September onwards. Altavilla had the following to say about the sector.

“May was a good year for the sector in general and also for Tofaş. People were racing to buy cars in expectation of a rise in prices and interest rates. After such great demand we were expecting sales to fall in June. In fact, this is what happened. Demand fell by 30 percent in June when compared with the previous month. I expect this trend to continue in July and August. If the exchange rate and the interest rates on consumer credits stay at the same level as in July then this will have a negative impact on demand. But I believe that the exchange rate and the interest rates on consumer credits will both fall. My forecast is that things will pick up again during the final four months of the year.”

Katsumi Sawai: “A Contraction In The Market Is Inevitable”
Honda Turkey General Manager Katsumi Sawai says that the increase in the monthly interest rates on car credits from 1 percent to 2 percent and the 20 percent increase in the value of foreign exchange makes a contraction in the market inevitable. He says that if things continue as they are at the moment then a total of 380,000-400,000 vehicles will be sold this year. He explains his expectations as follows:

“It takes the automotive sector 6-8 months to apply the brakes. Exchange and interest rate levels and the consumer index data play a very important role in market forecasts. But the possibility of a war breaking out close to Turkey, the expected movements in the foreign exchange and interest rates in the autumn and developments in domestic politics mean that the market may contract further.”

Mehmet Buldurgan: “Fluctuations Are Natural On The Domestic Market”
Temsa General Manager Mehmet Buldurgan says that in Turkey it is normal for the domestic market to experience fluctuations. He had the following to say on the subject:
“At Temsa we are targeting the European market and Turkey. At the moment interest rate levels on the European market are not at a disturbing level. In terms of exports, we are ahead of our targets for the year. We set out to make Temsa into a world-class global brand. In line with this we are continuing to increase our exports, particularly to Europe. Over the last two years we have increased our exports by 50 percent each year to $130 million at the end of 2005. Our target is to increase our exports to $160 million this year.”

Kurthan Tarakçioğlu: “We Will Not See A Decline Similar To The One In 2001”
Hyundai General Manager Kurthan Tarakcioğlu says: “We do not expect a contraction similar to the one in 2001-2002 and we have yet to revise our plans.” He says that they expect sales on the domestic market to exceed 600,000 vehicles. He continues as follows:
“I believe that Turkey should be very satisfied with the situation given the size of the market. We are expecting a minor contraction and planning to compensate for it by increasing exports and selling more of the Accent Era, which we currently cannot keep up with demand for. In the first five months of 2006 the sector grew when compared with 2005 in line with our expectations. When we compare our production, exports and domestic sales with 2005 then we can see that they were at a very satisfactory level.”

Turgay Durak: “Demand Will Pick Up Again”
Turgay Durak is general manager of Ford Otosan… At the same time he is president of the Automotive Industry Association. Durak says that he expects that in the medium term the re-establishment of a stable environment will result in an increase in demand and he makes the following evaluation.

“Compared with 2005, the automotive sector grew rapidly at the beginning of 2006. As a result, the sector as a whole grew by 12 percent up to May. But the subsequent sudden increase in the value of foreign exchange had a negative impact on the market and resulted in a fall in domestic sales. There was a rapid contraction in June in particular. The downturn slowed in July. It is true that in the short term this will have a negative impact on the automotive sector. But we think that in the medium term the establishment of a stable environment will result in demand rising again.”

Mehmet Demirpençe: “The Fluctuations Raised Vehicle Prices By 10 Percent”
BMC Board Deputy Chairman and Plenipotentiary Board Member Mehmet Demirpençe says the prices of vehicles rose by 10 percent as a result of the fluctuations on the market. He says that they tried to compensate for this excessive sensitivity on the domestic market with the more stable export market and explains their projections for the future as follows:
“We want to continue to strengthen our sales network abroad and form strategic alliances in some countries for production under the BMC brand and licence. By doing this we aim to establish a permanent presence on foreign markets and increase our turnover.”

Eşref Biryildiz: “Sales At A Loss Will Continue For A Maximum Of One Month”
Mercedes-Benz Turk Marketing and Sales Director Eşref Bıryıldız explains the measures the automotive sector has taken to counter the volatility on the markets as follows:
“The fluctuation in the value of foreign exchange has undoubtedly had a negative impact on the market and we think that this impact will become even more noticeable in the second half of the year. We are trying to maintain interest in our vehicles by offering ‘0’ financing campaigns and extra feature packages. Our passenger cars are imported from abroad and we are creating attractive opportunities through distributing the most appropriate models with the most appropriate range of features.”

Fadime Çoban
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