Automotive sector to be hit by Ukraine crisis ‘indirectly’

Automotive sector to be hit by Ukraine crisis ‘indirectly’

Automotive sector to be hit by Ukraine crisis ‘indirectly’

The Turkish automotive sector could be affected indirectly by the Russia-Ukraine conflict because of rising costs, according to professionals.

Turkey’s exports to Russia, which hit $705 million last year, is not expected to be affected so far, Baran Çelik, the head of the Automotive Exporters Association (OİB), told daily Hürriyet.

“Some $625 million of that figure was realized by the supply industrialists. With this figure, Russa was the eighth largest market of the supply industry,” he said. “The main problem for our manufacturers will be energy and commodity price hikes,” Çelik added.

Turkish automotive exports reached $29.3 billion in 2021.

Alper Kanca, an executive of the Union of Chambers and Commodity Exchanges of Turkey (TOBB), also said that Turkey will be affected by the Russia-Ukraine conflict indirectly.

“The tension will have an impact on a global scale. All the world will feel the price hikes in energy resources, raw materials and commodities,” said Kanca, who chairs the Automotive Supply Industry Assembly of TOBB.

European countries, which are Turkey’s top trade partners, will be affected particularly, he added.

Turkey’s automotive exports declined 1.6 percent in January to $2.2 billion, while supply industry exports rose 7 percent to $951 million, according to OİB. The automotive sector still took the lion’s share in Turkey’s total exports with 12.7 percent.
Turkey aims for $250 billion in total exports this year, up from $225.3 billion in 2021.

The Trade Ministry and the Turkish Exporters’ Assembly (TİM) have established a crisis desk to support Turkish businesses involved in trade with Ukraine and Russia.

Turkey has close ties with both countries in areas of construction contracts, tourism, wheat imports and fresh fruit and vegetable exports. Turkey’s exports to Russia increased from $4.5 billion in 2020 to $5.7 billion last year. Imports from Russia were $29 billion, up from $18 billion a year earlier.