Turkey suppliers on course for boom as Europe’s auto industry recovers

Following the news that the Automotive Suppliers Association of Turkey (TAYSAD) has announced a campaign promoting Turkey’s credentials as a reliable automotive producer;

Calum MacRae, Automotive Analyst at GlobalData, a leading data and analytics company, offers his view:

“The COVID-19 pandemic has highlighted the fragile nature of automotive manufacturing supply chains that stretch across the world and prompted some companies to review their component sourcing policies with a view to remapping supply chains to reduce future disruptions.

“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. Turkey already benefits from being comparatively low-cost in Europe while having frictionless trade with the EU thanks to its 1996 customs union.

“According to the Turkish automotive suppliers association, TAYSAD, if they only succeed in capturing a 10% share of China’s business in the European market it will be worth US$1bn in investment for the Turkish economy.

“In addition to low costs and regional proximity, Turkey has been relatively untouched by COVID-19, helped by its relatively youthful demographic. 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.”