Car production down 14 percent in first two months of 2012

Automobile sales declined by a further 34.2 percent in January, compared to the same month in 2011. (Photo: AA)

March 09, 2012, Friday/ 15:08:00

Fourteen percent fewer cars rolled off the production line in the first two months of this year compared to the same period a year ago, data from the Automotive Manufacturers' Association (OSD) have shown.

The OSD announced the two-month vehicle production figures in a statement Thursday. According to that statement, automakers in Turkey generally produced more heavy commercial vehicles in January and February of 2012 over the same two months last year, but the production figures were lower year-on-year for light commercial vehicles and cars.

The reductions came as a result of a contraction in demand, the organization said. Car sales in Europe this year are forecast to decline by nearly 5 percent to 12.9 million units, according to the Center for Automotive Research -- down from 15.7 million in 2000. Sales in Turkey had already started to drop in the third quarter of last year and declined by 11.75 percent in the last quarter, according to northwestern province of Bursa-based Automotive Distributors' Association (ODD) data. Automobile sales declined by a further 34.2 percent in January, compared to the same month of 2011, the association said on Feb. 7.

European auto demand has dried up as consumer confidence buckles under the pressure of government austerity measures, rising and persistent unemployment and the deepening of southern Europe's recession. In addition, most of the pent-up demand was taken out of the market during "cash-for-clunkers" incentives that governments introduced to help automakers in the 2008 financial crisis. The countries with the biggest number of idle production lines are France, Italy and Spain.

The decline in Turkey is, however, mostly attributed to the rise of interest rates on loans and the cold weather conditions that might have affected consumer interest in purchasing automobiles. The government's move to increase the private consumption tax (ÖTV) on certain products, including cars, late last year is also responsible for the slowdown in car sales, experts say. Sales are expected to range between 775,000 and 825,000 vehicles in 2012, whereas last year producers were able to sell nearly 1 million units. There are 936 authorized dealers in Turkey, selling 52 brands and employing 70,000 personnel in the country.

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