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Turkey’s car-making sector sputters amid economic downturn

Turkey’s automotive sector, which holds a 1.5% share in global automotive production, is struggling on an uphill track, hit by domestic economic woes and unfavorable external factors.
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The automotive industry has been a major leg in the economic growth model of Turkey’s ruling Justice and Development Party (AKP), which has relied heavily on foreign funds, while encouraging production focused on the domestic market and consumption. Now that this growth model is stumbling, the automotive sector has begun to struggle as well, with production on the decline, coupled with setbacks in foreign trade.

Linked to myriad sectors in the production chain, the automotive industry affects the development of other industries, mainly iron and steel, electronics, software, rubber and plastics, fuel, energy, textiles and chemicals. It is directly linked also to many sub-branches of the services sector such as distributorship, retail sales, insurance, car rental and maintenance and repair. Hence, when the automotive industry picks up, it has an invigorating effect on related sectors, and, conversely, when the automotive industry sputters, it threatens to slow down other segments of the economy.

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