Automotive Industry Association (OSD) President Cengiz Eroldu, points out Chinese automotive industry’s threat for the domestic automotive market.
Stating that China has become a leader in the global automotive industry with its electric vehicle transformation and strengthened brand perception, in addition to its strengthening in trade in recent years, Cengiz Eroldu says, “While we observe China’s efforts to manage its domestic market and increase its exports, they have taken the first place in the European Union automotive imports, which was our place.”
He emphasizes that our trade deficit with China is growing and has reached an unsustainable point. Especially in the automotive sector, he points out that imports of parts and automobiles to Turkey from China are on the rise. Stating that China may pose a risk to Turkey’s industry with its competitive prices, he says that this is an issue that needs to be managed in 2024. He also points out that applications for electric vehicles alone will not be enough to correct this imbalance.
Most are not electric
“In fact, 75 percent of the Chinese market and exports are internal combustion. However, more than a hundred electric vehicle companies in China will gradually grow and China’s world leadership in electric automotive will become certain. In the 11 months of 2023, while we imported 41.7 billion dollars from China, we exported only 3 billion dollars with a very growing deficit. While the foreign trade deficit with China was 16 billion dollars in 2019, we will close this year with 42-43 billion dollars. This is unsustainable! In the first 11 months of 2023, while we exported 21 million dollars worth of parts, we bought 2.2 billion dollars worth of parts and automobiles from China. While China had no share in our automobile imports in 2019, it now has a 7 percent share. Moreover, 78 percent is internal combustion, 1 percent is plug-in hybrid, 2 percent is hybrid, and 20 percent is electric!” said Eroldu.
Eroldu’s remarks are as follows:
We are not against the Chinese, we invite them to come and invest. As the automotive industry, we find competition positive, and we are aware that the arrival of Chinese companies can strengthen technology transfer and the supplier park. But it is not right to lose this market only through imports! While we export to the European Union, we also import vehicles from the EU. At least we sell and buy with reciprocity. We have no exports to China. We need to fix this!
We need to protect our industry that has been created for the last 50 years. It is not just a matter of selling more vehicles; we need to grow the Turkish market to 3 million units with new investors in order to invest in the future.
We still have one more cycle until 2035, Europe’s target for full electrification. Electricity is not a choice for us, it is a necessity! The biggest risk is the emergence of surplus production in Europe in the future. For new investors to come, domestic production must have an advantage!”
Announcing 2023 production and export data OSD, the umbrella organization of the sector, said that Turkish automotive manufacturers reached 1 million 468 thousand 393 units in total production, approaching 2017’s record of 1 million 695 thousand 731.
OSD, with its 13 members leading the Turkish automotive industry, announced that the capacity utilization rate for 2023 was 74 percent, while the capacity utilization rates on vehicle group basis were 74 percent for cars and light commercial vehicles, 91 percent for trucks, 54 percent for bus-midibuses and 75 percent for tractors.