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​Developments in the automotive sector
Total automotive market in Turkey remained around 1 million sales in 2017, broadly in line with the levels seen in the last 3 years. The market declined slightly by 3% to 980 thousand vehicles. Passenger car sales declined by 4.5% year-on-year to 723 thousand units while light commercial vehicle sales grew by 3% to 233 thousand units. The market for heavy commercial vehicles stood at 24 thousand units, parallel to the previous year. Growth in light commercial vehicles, a segment dominated by domestic production, and rising share of locally produced passenger cars in total sales brought down the share of imported vehicles by 4 percentage points to 64%.

Despite the slight contraction in the domestic market, total automotive production broke a new record thanks to robust export performance. In Europe, our most important export market, demand for passenger cars rose by 3.4% and light commercial vehicles by 4% which supported Turkey’s automotive exports. Export volumes surged by 17% yearon- year to 1.3 million vehicles. With exports exceeding USD 28.5 billion, the automotive sector once again was the largest contributor to Turkey’s total exports with 18% share. Total production grew by 13% to reach a new record of 1.7 million vehicles.

Turkey’s bus market expanded by 4% in 2017, with a significant proportion of the increase being seen in the municipal bus and small bus segments. While the European bus market grew as a whole, there was a contraction in France, one of our main markets. Markets like Italy, Spain and Germany however displayed growth.

Developments in the tractor market
Turkey is the 4th largest tractor market globally. Turkey’s tractor market reached record production and sales in 2017 with annual sales growth of 4% to 73 thousand units and production growth of 8% to 72 thousand units.

An important development for the sector came at the beginning of the year with the government’s introduction of an additional 21% customs duty on tractors imported from certain countries and additional 6-17% customs duty on diesel and semi-diesel engines. Therefore, share of imported tractors in total sales declined during the year.

Developments in the defence industry
In 2017, the spotlight in the defence market was on domestic companies and manufacturing. In procurements, priority continued to be given to products and systems developed and produced in Turkey. In 2017, Turkey’s largest single defence export contract was signed by Otokar.

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