Turkey 2019. Yamaha & BMW shine in a market moderately down

Turkish Motorcycles Market in the Q1 2019 has lost a mere 4% while the auto industry collapsed due to the deep economic crisis. Honda recovered the leadership lost last year while Yamaha jumped in second place boosting sales by 237%. BMW improved 137% while other premium brands have lost, with Peugeot down 44% and Ducati 45%

 

Economic Environment

High inflation, elevated unemployment, pervasive consumer pessimism and currency weakness continued to ravage the economy, leading to a marked contraction in the first quarter. The Turkish economy’s tough spot was further highlighted by feeble business and consumer credit growth in Q1, as well as ongoing weakness in the important construction sector, chiefly due to the cheap lira. Moreover, second-quarter data suggests that the economy remains in a predicament: Consumer credit growth was still weak in April; operating conditions in the manufacturing sector deteriorated in the same month; and consumers remained dejected through May.

The economy will likely contract this year due to collapsing domestic demand induced by high inflation, rising unemployment and a weak lira. However, the economy should begin to recover towards the end of the year as inflation softens, providing room for monetary policy easing.

 

Market Trend

According to data released by the Turkish Association of Motorcycles Manufacturers, in the first quarter 2019 the two-wheeler industry performed better than expected with sales down only 4% at 27.613 units, while the automotive industry is really collapsing. 

The market leader was Honda – after having lost the 2018 leadership – with 5.396 sales (+4.8%) followed by Yamaha which jumped up a huge 237% at 4.437 sales. In third place the local brand Kuba, dropped down 41.5% at 3.315 units and by Mondial with 3.150 (-19.7%).

The leader among Premium brands was again BMW, which boosted sales by 137%., while Peugeot lost 44%, Piaggio 18%, Ducati 45% and Triumph was flat.

 

Motorcycles Industry Heritage

This century started up with 53.000 sales in the 2000, well below the level of the record of 94.000 units touched in the 1997 and in the following years was in a sharp crisis with sales fallen down at a record-low of only 16.000 units in the 2002. Then the crisis was over and the market took a rushing path, with sales  near the record in the 2004 (92.000) and then above, with 2005 at 174.000 and in the 2006, in the sky, at the actual record of 390.000 units.

Too fast too soon, and in the 2007 and 2008 sales fell at 192.000 units (the current third best ever level), with a rapid fall at 134.000 in the 2010, a rapid recovery in the 2011, at the current second best record, 199.000.

Since then a progressive slow declining pathway is in place, with 2016 at the lower level in this decade (143.677) followed a recovery in the 2017 due to the reduction of compulsory traffic insurance tariff and ownership tax cut, ending the year at 157.755 units.

According to data released by the Turkish Association of Motorcycles Manufacturers, in the 2018 the market has been surprisingly resilient, ending with an increase of 1%, at 159.339 units, while the economic environment deteriorated rapidly, severely hitting the automotive industry, fallen down by a huge 35%.

Despite the positive score, the Turkish Motorcycles market has lost one spots in the preliminary global ranking falling out in 27th place, overtaken by Guatemala

In the last decade the domestic brands have progressively lost the market control to Japanese brands. However, the strong lira depreciation in 2018 has penalized all importers with local brands and local producer gaining consistently in volumes and market share.

Indeed, Honda has been the market leader between the 2013 and the 2017, but in the 2018 it was overtaken by Kuba, which increased sales by a spectacular +49% ending the year not far from 30.000 units. Kuba is a local company established in the 2004 and operating in Gaziantep with an annual production capacity of 120.000 among scooters, motorcycles, tricycles and ATV. In 2018 was back on top of the market after 5 years.

In second place ranked Honda with 24.729, losing 17.0%, and actually under the attack of the third, Mondial, very close with 24.626 units (+11.1%).

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