Automotive industry

Chip crisis still grips Turkey’s auto industry as exports tumble

As the semiconductor crisis rages, Turkey’s auto industry exports fell nearly 7% year-on-year in March, according to industry data released Thursday, the invasion of Ukraine by Russia also causing sales to fall.

The global shortage of semiconductors is plaguing the automotive industry and still hampering its progress, in addition to soaring costs and disruptions in the supply of raw materials.

Exports amounted to $2.7 billion (TL 39.78 billion) in March, supported by a double-digit increase in the supply industry and the bus-midibus-minibus product group, while that passenger car exports recorded a sharp decline, Uludağ Union of Automotive Industry Exporters (OIB) data showed.

Constituting the largest product group in March, the supply industry’s exports jumped 11% to 1.16 billion, with bus-midibus-minibus sales revenue also jumping 27% at $124 million, according to the data.

Passenger car exports fell 34% to $685 million, according to OIB data, while sales of vehicles for transporting goods fell 3% to $534 million.

“The impact of the automotive chip crisis is still relevant,” said OIB director Baran Çelik. “At the same time, in the first three months of the year, our automotive industry’s exports fell about 3% to $7.5 billion. Our average monthly automotive exports in the first three months were $2.5 billion.

Lockdowns related to the coronavirus pandemic have caused a shift in consumer spending toward electronics and increased demand for the semiconductor chips that power them.

Modern automobiles can use dozens of chips in their various electronic systems, and automakers have had to slow production or leave factories idle when they ran out of supplies.

Many major Turkish automakers such as Ford Otosan, Tofaş and Oyak Renault have had to suspend production at their factories in recent months.

Despite the challenges, auto exports for the whole of 2021 jumped 15% year-on-year to $29.34 billion, according to OIB data.

Çelik said there was a loss of $500 million in automotive exports in the first quarter due to the euro/dollar exchange rate.

Germany remained the auto industry’s top market, but exports fell 5% in March to $411 million, the data showed.

UK sales fell 4% to $269 million, while exports to Italy also fell 2% to $241 million. Exports to France, Belgium, Poland, Russia and Egypt fell by 30%, 14%, 67%, 68% and 31% respectively.

Exports to European Union countries, where half of Turkey’s total exports go, fell 6% year-on-year to $1.81 billion, the data showed, accounting for 67% of total sales.

Germany was the top market for the supply industry, with exports up 9%, while sales also jumped to France (16%), the United States (25%), the UK United (17%), Spain (51%), Poland (21%). %) and Romania (22%).

On the other hand, supply industry exports to Russia have fallen by 65% ​​amid sweeping Western sanctions against Moscow for its military campaign in Ukraine. Sales to Slovenia and Egypt were also down 28% and 40%, respectively, according to the data.

Sales of passenger cars in France fell by 70%, alongside a sharp drop in exports to other important markets, including Italy (24%), Spain (22%), Germany (44% ), the United Kingdom (33%), Poland (20%) and Belgium (38%).

Sales to Israel and Bulgaria also jumped 10% and 84%, respectively.

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