In the midst of the Covid-19 pandemic there has been much discussion about how automotive supply chains will be remapped to reduce disruptions to supply. Such a remapping could see the chains shortened and a move away from lowest-cost to best-cost. Early on in the pandemic we saw how China’s shutdown impacted vehicle manufacture in Europe with the likes of FCA and Daimler halting production due to parts shortages.
Now the Turkish automotive industry has thrown its hat into the ring as a closer-to-home alternative to far flung lowest-cost sourcing locations. Of course, Turkey already benefits from being comparatively low-cost in Europe while having frictionless trade with the EU thanks to its 1996 customs union.
Go deeper with GlobalData
The Automotive Suppliers Association of Turkey (TAYSAD) announced on 13th June that it was to initiate a campaign promoting Turkey’s credentials as a reliable automotive producer. According to TAYSAD, if they only succeed in capturing a 10% share of China’s business in the European market it will worth $1 billion in investment for the Turkish economy.
Already the Turkish industry has seen increased interest from European OEMs in sourcing from Turkey since the turn of the year. To add to its traditional appeal of cost and convenience Turkey’s been relatively untouched by Covid-19. While it’s had over 178,000 confirmed infections, just over 4,800 deaths from Covid-19 have been recorded due to Turkey’s relatively youthful demographic. Consequently, all of its seven light vehicle manufacturing plants were back in operation by the first week of May in contrast to much longer shutdowns in other European countries. Furthermore, its market has continued to show resilience in the pandemic. Year-to-date sales remain 20% ahead thanks to an extremely strong start to the year, with Covid-19 having a relatively minor impact on sales in April and May with sales down 14.6% and 2.4% respectively.
It is these comparative strengths that TAYSAD will be keen to stress as it goes to market to further Turkey’s claims to be an alternative to sourcing from China for many of Europe’s OEMs.
See also: Turkey component manufacture key to exports – TAYSAD
US Tariffs are shifting - will you react or anticipate?
Don’t let policy changes catch you off guard. Stay proactive with real-time data and expert analysis.
By GlobalData
