Toyota’s Turkey Unit Sees Exports Plunge on Russia Weakness

A woman walks out from an entrance of Toyota Motor Corp's showroom in Tokyo, Japan, June 16, 2015. Toyota Motor Corp shareholders approved a controversial new class of stock on Tuesday that will bring in more long-term investors, but which faced opposition from foreign funds as they are readily available only in Japan. (Reuters Photo/Yuya Shino)

By : Birsen Altayli | on 4:38 PM July 09, 2015
Category : Business, Corporate News, Automotive

A woman walks out from an entrance of Toyota Motor Corp's showroom in Tokyo, Japan, June 16, 2015. Toyota Motor Corp shareholders approved a controversial new class of stock on Tuesday that will bring in more long-term investors, but which faced opposition from foreign funds as they are readily available only in Japan. (Reuters Photo/Yuya Shino) A woman walks out from an entrance of Toyota Motor Corp's showroom in Tokyo, Japan, June 16, 2015.  (Reuters Photo/Yuya Shino)

Adapazari, Turkey. Toyota Motor Corp’s Turkish business saw first-half exports slump by 30 percent after a weaker ruble hit Russia’s car market, but hopes to pare losses with sales domestically and to Europe, the unit’s chief executive said.

The Adapazari, Turkey-based plant makes Corollas and Versos and has capacity to produce 150,000 vehicles, about 1.5 percent of Toyota’s global production of about 10 million cars and trucks.

The Turkish business expects to finish the year with a 9 percent decline in sales, or about 120,000 vehicles, Orhan Ozer told Reuters in an interview late on Wednesday.

He did not give a figure for sales in the first half, but said output fell 14 percent.

“We saw a serious fall in exports this year due to the events in Russia and the devaluation (of the ruble),” Ozer said. “Russia was our top market for the Corolla, we were planning to sell a quarter of our Corollas to Russia, but we’re not even selling 10 percent.”

Car sales in Russia have plunged since 2014 as the economy weakened due to lower oil prices and Western sanctions over the Ukraine crisis. In 2015, new car sales are seen at 1.55 million, down 36 percent.

“We will compensate with (sales in) Turkey, Poland, Britain and Israel, bringing it to a level of 120,000, compared with exports of 131,000 last year,” Ozer said. So far, Israel has been the main buyer, followed by Russia, Egypt, France and Spain.

The plant normally exports about 90 percent of the vehicles it makes, but so far this year it has exported 73 percent.

Despite the drop, Toyota is working to boost exports and capacity at the Adapazari plant under a 2014 investment plan of $500 million, Ozer said. The Japanese carmaker has previously said it wants to raise capacity by two thirds to 250,000.

Toyota would be interested in eventually selling vehicles to neighboring Iran, Ozer added. Tehran is in talks with the United States and other Western powers on curbing its nuclear program to end sanctions.

Reuters

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