Renault production halted at Turkey plant on chip shortages

Renault production halted at Turkey plant on chip shortages
/ bne IntelliNews.
By Akin Nazli in Belgrade September 12, 2022

Oyak Renault, a 51:49 JV launched as far back as 1969 by Renault (Paris/RNO) and Turkish military pension fund Oyak, suspended production in some departments of its Bursa, Turkey plant as of September 8 due to the impact of the global shortage of semiconductor chips, according to media reports.

Article chart: Annual vehicle production in Turkey.

The MM11 engine montage line and the cast house are to return back to production on September 13 while the factory directorate, chassis and battery assembly lines are to come back online on September 15.

Table: Suspensions of vehicle production in Turkey due to global chip crisis.

Oyak Renault has an annual production capacity of 378,000 vehicles and 920,000 engines at the Bursa plant. It produces the Clio IV, Clio V and Megane sedan vehicles.

In 2021, the company produced 248,000 vehicles, 173,475 engines, 153,261 gear boxes and 496,000 frames.

In 2021, Oyak Renault signed a five-year agreement under which Karsan (KARSN) will annually produce 55,000 Megane sedan units, starting from 2023.

In AprilMitsubishi Motors (Tokyo/7211) said that it is to produce its new Colt model five-door hatchback passenger cars at the Renault plant in Bursa. Hybrid and gasoline versions would be on sale in Europe in 4Q23.

In 2021, Oyak Renault was Turkey’s seventh largest exporter with $2bn in export revenues, equivalent to a 1% share of Turkey’s overall exports.

Also in 2021, Oyak Renault was the ninth largest industrial enterprise in Turkey with Turkish lira (TRY) 34bn (around $2bn) in revenues.

Separately, according to data from trading group OSD, automakers in Turkey manufactured 92,625 vehicles in August, marking shrinkage of 13.3% y/y, 

Passenger car production, however, expanded by 5.1% y/y to 63,000 units. Commercial vehicle output fell 36.4% y/y to 30,000 units.

In auto sales, the local market contracted 13.7% y/y in August, with 52,000 vehicles sold. Passenger car sales fell 21.3% y/y to 35,000 units. The number of imported passenger cars was down 4.5% y/y to 24,000 units.

Despite the severely weakened Turkish lira, auto export revenues fell by 5.4% y/y to $2.3bn with passenger car exports down 1.7% y/y to $613mn.

In the first eight months of 2022, total vehicle production increased by 2.3% y/y to 833,000 units. Passenger car output fell 3% y/y to 496,000 units. 

Around 483,000 vehicles were sold on the local market in January-August, marking a 7.5% y/y decline, while passenger car sales dropped 9.4% y/y to 355,000 units.

Automakers raked in $19.9bn in export revenues in the first eight months, up 3.7% y/y, but passenger car exports declined by 6.5% y/y to $5.6bn.