Date set: War-related price hikes coming for automobiles

Production activities in the automotive industry have been going through a difficult period since the beginning of the year, with declines in both export and total production figures. Industry representatives state that the increase in raw material and energy costs caused by the conflicts in the Middle East will leave consumers facing price hikes.

“PRICE HIKES DUE TO COST INCREASES ARE INEVITABLE”

According to the report in Sözcü, Automotive Manufacturers Association (OSD) President Cengiz Eroldu evaluated the latest developments in the sector and stated that the environment of uncertainty has changed forecasts, sharing the following information: “We have revised our export figures by 4 percent and production by 2 percent. There will be a cost increase in plastic raw materials. A price increase due to rising costs is certain, but it is difficult to know how much it will be. Since oil prices have not stabilized, raw material prices have not stabilized either.”

FIRST QUARTER DATA SHOWS DECLINE

In the first three months of this year, according to OSD data, automotive production in Turkey fell by 7 percent to 321 thousand 856 units, while exports decreased by 15 percent to 215 thousand 323 units.

DEMAND BROUGHT FORWARD

Emphasizing that the expected price increases are causing market activity, Eroldu said, “This is the reason for the market activity at the beginning of April. Customers are rushing to buy, saying ‘prices will increase.’ Costs and prices will rise; this is inevitable. There will be reflections on prices in May and June,” he said.

COMPETITIVENESS WEAKENING, PRODUCTION SHIFTING

Pointing out that competitiveness in the sector is decreasing, Eroldu said, “The automotive industry has been experiencing a serious loss of competitiveness for 2 years. Soon there will be no cable production left in Turkey. Industrialists continue to shift to countries like Egypt and Tunisia. You cannot sell when you produce with these costs,” he stated.

NO EXPECTATION OF CHANGES IN TAXES

Evaluating tax policies, Eroldu emphasized that he does not expect a difference in tax rates and expressed the following: “I do not expect a change in taxes at the moment. We also do not find it right to ask for anything from the public sector. We are in a period where the country is struggling to overcome its own problems.”

News Source: 12punto