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Turkish Automobile Industry Churning Profits on Strong Demand
Sep 06, 2008

The production of Turkish automobile industry grew by 31.8% in June 2008 due to favorable business conditions, rising foreign investment and strong demand for vehicles in the market.

The Automotive Industry Association (OSD) said that vehicle production in Turkey during the first half of 2008 surged by 31.8% against 537,955 Units produced in the same period a year ago, as reported by
TodaysZaman.

The passenger vehicles production rose by 19.3% from 315,116 Units to 375,843 Units. Out of the total vehicles produced during Jan-June 2008, the maximum increase was witnessed by minibuses at 105%, followed by pick-up trucks, small trucks, buses and large trucks at 54%, 28%, 16% and 8% respectively. Moreover, the transport vehicles saw an upsurge of 12% with sales of 280,720 Units during the review period.

The high growth in the Turkish automobile industry is largely due to a rise in vehicle demand in the country as new, advanced and complex technologies are luring people. In addition, Turkey is rapidly changing into a dynamic emerging market. It offers business-friendly conditions to investors, who give priority to manufacturing high quality products. As a result, auto investors from across the world are willingly investing in the Turkish automobile market. These players are introducing new models and are providing diverse options to consumers, which, in turn, are increasing the industry sales.

However, the industry experts are doubtful of current growth in the second half of 2008 because of continuously rising inflationary pressure. Besides, soaring oil and raw material prices, together with credit crunch, could push back the Turkish auto sector. Higher lending rates of banks could badly hit the vehicles sales in the country in coming months.

According to a Research Analyst at
RNCOS, “The Turkish automobile industry is growing at a rapid pace because of favorable business conditions. Considering the high growth potential of the industry, foreign players are hugely investing in it. But some negative factors such as mounting inflation could reverse the trend, which is not good for the industry.”

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