Automotive suppliers growing faster than the main industry

Dunya Executive - - BUSINESS - AYSEL YUCEL

Automotive suppliers, the component manufacturers for the auto industry, are growing faster than OEM (original equipment manufacturers) companies, according to TAYSAD, the Association for Automotive Suppliers. The spare parts manufacturers have posted an 11 percent growth in exports while the main industry recorded a mere one percent growth in 2018 from previous year, TAYSAD Chairman Alper Kanca said.

The suppliers constituted 34 percent of industry exports last year and increased by 88 percent on a euro basis over the last eight years, according to TAYSAD data. Some 78 percent of exports are for European Union countries.

The automotive industry posted a total of $31.5 billion in exports in 2018 and became the leading industry for the thirteenth year in row. The industry had a 19 percent share in total exports. Parts suppliers accounted for $10.8 billion of industrial exports. Turkey’s total exports were $168.1 billion last year.

However, automotive production decreased by 8 percent in 2018 and is expected to fall by another five percent this year, according to TAYSAD. Automotive sales showed a drastic fall of 35 percent and are expected to continue declining by 10 to 20 percent this year.

TAYSAD changes

In the meantime, Taysad has changed its name to the Association of Automotive Suppliers from the Association of Automotive Parts and Components Manufacturers, its chairman, Alper Kanca, announced in a press conference last week. The change in name reflects the evolving functions of its members.

Companies in the industry have reached a point where they are not only manufacturers or suppliers but new technology and product developers that have surpassed the companies.

Most are favored so much by OEM firms that they are individually invited to launch new facilities in locations closer to OEM manufacturing sites in other parts of the world. However, they feel the growing burden of energy bills and rising minimum wages, which have jumped 71.22 percent and 26 percent respectively on a lira basis since January 2017 and by 12.69 percent on a euro basis, TAYSAD calculated.

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