Turkey's auto makers have switched their attention from the fine tuning of their cars to that proposed by the IMF's (International Monetary Fund) Turkish desk chief, Carlo Cottarelli, after the economy overshot the inflation. Vehicle industry representatives, who have been evaluating Cottarelli's proposal to curb demand with an extra tax and funding for automobile credits, have asked the government not to act without consulting them
The Automotive Industrialists Association (OSD) chairman, Ali Ihsan Ilkbahar says the government treats domestic producers like a stepchild and supports importers.
"We should think about Turkey, rather than specific sectors, in making economic decisions. But the desire is for the success of the stability program and if the demand for automobiles has to be cut in the process, we have no objections."
But the demand for vehicles has increased 70 percent in recent months. Ilkbahar said: "It is wrong to oppose decisions that are to benefit the country. But sector representatives should be consulted before taking a decision. It would be wise to make sure that domestic producers are not unduly affected by these decisions - 50 percent of the vehicles sold now are foreign, and half of them are luxury cars. Governments have treated producers and importers the same way in the past. They should not make the same mistake this time."
Ilkbahar said interim decisions have a way of becoming permanent "We should look to see if there are contradictory developments after a particular decision has been taken. Demand has started to fall. It may slow down even further as the implementations take effect, in which case we should try to avoid a complete stop."
Cars were not a luxury but an absolute necessity, said the Car Exporters' Association (OID) chairman, Yuksel Mermer. He has asked the government to meet sector representatives before taking any measures.
Pointing out that car taxes in Turkey were also very high, Mermer said: "What kind of tax will be put on cars? There is the vehicle purchase tax, the extra vehicle purchase tax and value-added tax for automobiles. In this way taxes start at 45 percent and go as high as 80 percent. Is there any other country in the world where vehicle taxes are so high?"
He said Turkey's automotive sector exports $1.7 billion in goods and the government should take measures to increase exports, instead of tampering with imports.
Asserting that to limit imports was not logical, Yuksel Mermer said: "There is a way in which these things are done all over the world. If you limit imports because cars are popular today, will you stop building if buildings become popular tomorrow."
Memer said Turkey has signed bilateral agreements and the European Union customs agreement. "I don't think limiting imports will be useful in a globalize world. It was postponed needs in the automotive sector caused a demand explosion this year. But demand goes down day by day. Those who need cars do not care about credit interests or taxes. Over recent years, interest rates for automobile credits have been high, but the people who needed cars used credit nonetheless. I don't think that demand will be reduced through these measures." — (MEBG-Albawaba)
© 2000 Mena Report (www.menareport.com)
