by Burak Akinci
ANKARA, May 30 (Xinhua) -- Turkey's key automotive sector is trying to compensate losses due to the COVID-19 outbreak by fully restarting manufacturing after a long break, but the drop in domestic and international demand will be challenging, industry officials said.
Factory production in Bursa province, northwestern Turkey, where the bulk of the automotive industry is located, was not completely halted during lockdown as there was still demand from the Far East and South America.
Major plants started production in mid-May with some COVID-19 restrictions eased, hoping to reach pre-pandemic levels.
Tugrul Arikan, general manager of Turkish bus manufacturer Anadolu Isuzu, recently said their factories were running at 60-percent capacity, which could increase if foreign demand rises.
He added that the company had started production with only 50 percent of the workforce initially, and enhanced safety measures to protect workers from contracting the coronavirus.
The sector struggled with a major drop in exports as Europe came to a near standstill because of the pandemic. Around 75 percent of vehicles manufactured in the country are exported to the region.
Automotive Manufacturers' Association (OSD) data showed that Turkey's total automotive exports declined by 33 percent annually in January-April.
"Domestic demand in Turkey was not enough to offset the collapse in demand from Europe for the automakers," Alper Kanca, head of the Automotive Supplier Industry (TAYSAD), said.
The official said they expected a revival of the sector in 2021, after a contraction this year.
Turkey's automotive industry has developed from assembly-based production to an industry with research and development, and design capabilities, and high added values.
The sector has been of key value to local production input over the years, with the partnerships established between foreign companies, such as Ford, Fiat, Renault, Toyota and Hyundai, and Turkish entrepreneurs.
Turkey is now the largest light commercial vehicle manufacturer in Europe and ranks 14th in the world in terms of automotive production output.
The automotive industry is one of the main locomotives of the manufacturing sector in Turkey. It is also one of the main sources of employment in the country, providing more than 400,000 jobs.
It is also one of the largest sources of exports, accounting for 16 percent of total exports.
A source close to the government told Xinhua that the sector would be unlikely to reach the levels of 2018 or 2019 in short term, but it is expected to rebound at the end of the year in line with the economic recovery.
"We will continue to export, but it also depends on the foreign demand," he stressed, indicating that 85 percent of vehicle production in Turkey sent to foreign markets in 2018.
More than 1.3 million vehicles were exported from Turkey to foreign markets in the same year. In addition, Turkey was the number one vehicle exporter to European markets with 1.1 million units in 2018, statistics show.
In a car dealer shop in capital Ankara, a sales representative told Xinhua that sales have plummeted during the outbreak because of the lockdown and the fact that customers didn't know what to expect in the aftermath.
"The Turkish customers definitively love cars and we expect a revival ahead in the stagnated domestic market," Merdan Yasa said, adding that the government should also look into some tax advantages for consumers considering the declining national currency.
Last week, Turkey has increased the tax on the buying of foreign currency to curb fallout of the lira from the coronavirus pandemic.
The decision has increased car prices by up to one percent, according to experts. Enditem
