IPANEWS

Turkey’s automotive face tough times amid COVID-19 pandemic

The latest survey by the Turkish Vehicle Supply Manufacturers Association’s (TAYSAD) shows that more companies are planning to stop their operations due to the COVID-19 crisis.

As COVID-19 confirmed cases passed 20,000 in Turkey, the outbreak not only brought many sectors to a grinding halt but also deeply affected the supply chain of the automotive industry, which created more than 200 thousand jobs.

TAYSAD which has almost 460 members, and the only body of the sector, released a survey report which shows that the devastating impact of the pandemic will continue for a further two to three months and the pessimistic perspective in the sector is on the rise.

TAYSAD conducted its first survey on 25 March while the second survey took place on 30 March.

The first survey indicates that 63 percent of companies applied to the Turkish Employment Agency’s (ISKUR) work allowance, an initiative introduced to help companies during the outbreak.

The second survey shows that 75 percent of the sector representatives applied to the work allowance as the pandemic continues to affect production negatively.

The companies which responded that they are going to shut down their productions have increased to 35 percent compared to 24 percent from the first survey.

TAYSAD’s research also noted that the automotive supply industry will work this week at a  capacity of 41 percent and next month firms will increase their production to 60 percent.

At least 42 percent of the suppliers also face a cash crunch during April, the survey shows.

The participants emphasized that loss of work and turnover was at the top of the problems with 92 percent, and secondly, the decline in imports with 46 percent is another worrying challenge.

The sector representatives also mentioned that the orders decreased sharply during the last week of March compared to the week prior. Many participants complained that they are struggling with debt collection.

TAYSAD President Alper Kanca told Turkish Dunya Newspaper that the average electricity consumption fell from 1.5 million kWh to 0.6 million kWh daily in the Automotive Sub-Industry Specialized Organized Industrial Zone (TOSB).

“We need new support, especially we should not allow our employees to be victims,”

Kanca explained that the dramatic decline in energy consumption is a clear indication of the situation in the sector. He also mentioned that the pandemic’s negative impact on the sector will continue for almost a year.

Turkey’s automotive sector’s export fell 29 percent in March to $ 2.1 billion. The automotive industry was the leading sector in Turkey’s exports industry for the last 14 years but the sector suffers due to the corona pandemic in European states.

Turkey’s automotive and the supply industry export to Germany amounted to 292 million dollars in March with a 25 percent decrease. Exports to France totaled 183 million dollars with a 46 percent decline, while export to the United Kingdom was at  181 million dollars with a 26 percent decline.

IPA

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