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Is the expected recovery in the automotive sector in the third quarter?

In May, the market contracted by 2.1 percent. While production contracted by 53.7 percent, it was realized as 63 thousand 145 units. While exports pointed to a 60.3 percent contraction in this period, imports stood out with an increase of 0.3 percent.

Let’s take the analysis by segments in the automotive sector only as May. In the automobile market, vehicles in groups A, B and C made up 84.1 percent of the market, according to segments. In terms of fuel, gasoline took the largest share in May; followed by diesel, autogas and hybrid. It was observed that the sales of vehicles with the highest share under 1600cc according to their engine volume increased by 23.4 percent and achieved a share of 94.8 percent in the market. While the sales of 1600 – 2000cc decreased by 15.7 percent, the sales of cars over 2000cc contracted by 31.3 percent and got a 0.2 percent share in the market.

In the second-hand vehicle market, the last report belongs to April, according to TUIK data. According to April data, automobile sales decreased by 50.5 percent compared to the same period of the previous year. While pickup truck sales contracted by 45.9 percent in the same period, it is noteworthy that bus sales experienced the highest contraction, with 63.7%. In general, it is seen that the market shrank by 47.3 percent in April when all segments are included. Also, the Indicata data on the ODD page is more up-to-date, but gives the results for June. Second-hand online market sales increased by 48.1 percent in June compared to last year. Turkey’s second-hand online market has increased by 33 percent in general. In the second vehicle sales, it is seen that the highest share on a segment basis occurred in the C class at the rate of 41.9 percent in the first 6 months.

When we look at the world in general, it is seen that the automotive market contracted by 49.0 percent in Germany, 50.0 percent in France, 50.0 percent in Italy, 50 percent in England and 73.0 percent in Spain. There is a market contraction of 17.3% in North America and 27.2% in South America.

While incentives are given to the manufacturers in order to revive the automotive industry in Europe, different campaigns are planned to accelerate vehicle sales. In Turkey, on the other hand, in addition to the decrease in loan interest rates, this process is expected to be accelerated by the pioneers of the sector with their own financing companies or alternative campaigns.

While stock shortages are on the agenda for some brands for now, there are evaluations that this situation will be resolved quickly for the sector in the remaining 6 months of the year or after September. There is a situation that we encounter especially frequently in this period, which made it difficult to obtain new vehicles, which increased the demand for second-hand vehicles. However, we see that this is more about vehicle prices than second-hand vehicle demand. Because, according to April data, there was no significant change in second-hand vehicle sales, and there was a contraction. We see this in segment-based comparisons in Indicata data. While the highest increase in the A segment compared to the beginning of the year was in the B class, the increase in the C-SDN segment was the second with 26.9%. Again, this situation shows itself in the second-hand online sales prices in May and June.

Contrary to lagging data, it is useful to examine the sector within the framework of the latest consumer confidence index. One of the survey questions included in the index is “The probability of purchasing a car in the next 12 months”. The percentage increase in this probability was over 24 percent in May and April. In other words, it shows that purchasing confidence for the next 12-month period is gaining strength. One of the indicators we follow in order to be able to comment on the sector is foreign trade statistics. According to GTS, motor land vehicles, tractors, motorcycles and other land vehicles were the most exported sections in the latest data. In June, this section could not enter the top five of the import item, but the fact that it takes place in exports indicates that the process gained momentum as the production market revived and businesses started their activities. So much so that while the issuance of this section was 518 million dollars in April, it increased to 1.01 billion dollars in May and 1.7 billion dollars in June. Finally, let’s add the June manufacturing PMI data here. It is considered that with the start of operations in June, new orders gained momentum and international orders moved to the growth side.

When we look at the companies that are among the pioneers of the sector and listed on the Stock Exchange, it is seen that they recorded a movement of more than 40 percent in the second quarter, led by the index and the general global movement. While the index was over 30 percent premium in the second quarter, the premiums in the sector’s shares rose over 40 percent. In other words, contrary to an excessive premium, a return on the index is observed in automotive stocks. In the data about the sector, it is signaled that sales and production accelerate.



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