Albert Saydam, President of the Turkish Automotive Suppliers’ Association (TAYSAD), made important statements about the Turkish automotive industry at the annual evaluation meeting held last week. Stating that international reports indicate a 7 percent contraction in the Turkish automotive industry in 2024, Saydam emphasized the importance of domestic market sales to maintain production power. “At this point, we should take Iran, which sells nearly 1 million vehicles annually despite embargoes, as an example and discuss what we need to change,” Saydam said. Saydam also drew attention to the need to cooperate with the China, growing aggressively in the global automotive market, instead of standing against them.
The Turkish automotive sector had broken a historical record in both domestic and foreign sales with sales of 1.2 million units and exports of approximately USD 35 billion in 2023. Production exceeded 1 million 468 thousand units, reaching the highest figure after 2017. Albert Saydam explained the projections for this year based on global reports. Stating that vehicles were produced globally last year above expectations, Saydam said, “We anticipate a similar situation in 2024. Reports show that global vehicle production will remain slightly below 93 million units this year. However, since we, as suppliers, know the main industry better, we predict that this number will remain above 93 million units.” Saydam, who stated that there is an expectation of a 3 percent contraction in Europe’s automotive production this year, gave the following information about the Turkish market. “Global reports predict that Turkey’s production will decline by 7 percent in 2024. It is pronounced that sales in 2024 will remain at 850 thousand units, with a pessimistic possibility of 750 thousand and an optimistic possibility of 900 thousand. If these declines occur, production numbers will fall this year. However, if some steps are taken, if the strong domestic market in 2023 is maintained, then it is possible to reach 1.6 million units as a continuation of the growth trend in 2023.”
Iran sells 1 million vehicles annually despite the embargo
Reminding that Turkey has jumped four places in global sales in 2023, rising from 18th to 14th, Saydam said, “If the estimate shared by vehicle distributors is 850 thousand units, then our position may regress to 19th.” Emphasizing the importance of the domestic market at this point, Saydam said, “Iran can keep its market above 1 million units despite the embargo imposed for years and serious problems in supply. If Iran can do it, we can do it much easier. We need to discuss what we need to change internally.”
Saydam emphasized that their goal is to put Turkey among the top 10 countries in automotive production and said, “Last year, we rose to 12th place in production. Last year, we were only slightly behind France. If we want Turkey to be at a better level in 2025 and 2026 than it is now, we need to underline three issues. The first is not to lose competitiveness. Second, all stakeholders need to come together and work for a strong domestic market. And third, we need to attract and realize new main industry investments. When these three factors come together, we can exceed 1.7 million units of sales and 1.9 million units of production.”
We should work with China
On the other hand, Saydam touched upon China’s aggressive growth in the global automotive market and its possible effects on the Turkish automotive supply industry, saying: “There is no escape from the Chinese. They will come anyway, let’s at least be with them. Europe imposed a 30 percent tax, but they immediately bought a factory in Hungary. Understanding China and working with China is on our agenda for 2024. Because it is not possible to stand in front of it, if you tax 30 percent, China will find a way. Even if you say 50 percent, it will find a way. We have a lot to learn from them. Some suppliers standing against China may be eliminated.”
Stating that several Chinese main industry companies are preparing to invest in Turkey and that negotiations are ongoing, Saydam said, “We are excited about new investments. We are waiting for surprise news. We think these investments should be encouraged.”
Labor shortage is a big problem
Touching on the problems experienced in the sector, Saydam stated that the biggest problem is the lack of personnel. Saydam stated that they are focusing on protecting the personnel, and that foreign investors planning to invest in Turkey are also concerned about this issue. “A Chinese company planning to invest in Gebze asked us if there was really a labor problem in the region,” Saydam said. Saydam said that the problem of access to financing has decreased, the increase in energy costs is not as much of a problem as it used to be, but logistics has become an important problem again due to the problems experienced in the Red Sea and Panama transit.
“The universe is not ready for electric vehicle transformation”
Albert Saydam answered the question about whether the Turkish supply industry is ready for electric vehicle transformation as follows: “Both the main industry and the supply industry can meet this transformation in terms of production power. However, in the current technology, how many electric vehicles can be produced is limited by the lithium reserves in the world. When you cannot find a new technology to replace lithium, all these discourses may reach the point of “wait a minute, we will not be able to produce electric vehicles” much earlier than expected. Therefore, the world, even the universe, is not ready for this transformation. Maybe tomorrow, asteroid mining will find a mine that will be enough to use batteries on top of the minerals in the world, then I will take back what I said. That’s why I include the universe.” Saydam also said that at a meeting with Toyota Europe’s purchasing department last week, the brand signaled that they could work globally with 12 local companies, and added, “This shows that our supply industry is technologically ready for electric vehicle transformation.”