Turkey’s auto production edged up by 1% y/y to 159,464 units in March, following growth of 2% y/y in February, data from the Turkish Automotive Manufacturers’ Association (OSD) showed on April 16.

Across Q1, total vehicle production slightly rose to 425,183 from 424,216 units a year ago while passenger car production fell 5% y/y to 285,168 units.

Total vehicle sales on the domestic market rose by 2% y/y to 163,358 in Q1 while export revenues rose by 18% y/y to $8.38bn despite a 3% y/y decline to 344,257 units in sales abroad.

“Turkey's latest data on auto exports, released by the OSD, points to positive trends for both Ford Otosan and Tofas, in our view,” Vladimir Bespalov of VTB Capital Research said in an e-mailed note.

In particular, Ford Otosan's exports increased 5% y/y in March and 10% y/y in Q1. VTB Capital believes that higher exports were supported by strong demand and capacity expansion in the second half of 2017.

Tofas' export sales were still down 3% y/y in March, but the rate of decline is moderating. The decline for Tofas’ Q1 exports was 11% y/y. VTB Capital sees that as a positive sign, especially given the high base of the first quarter of 2017, which will become more favourable in subsequent months.

The Turkish Automotive Distributors’ Association (ODD) previously reported on April 3 that vehicle sales in Turkey rose by 1.5% y/y to 158,430 units in Q1.

Turkey's vehicle sales declined by 2.8% to 983,720 units in 2017. The ODD forecasts that auto sales will amount to between 925,000 and 975,000 in 2018.

In 2017, Turkey’s auto production increased by 13% y/y to a record high of 1.67mn thanks to rising exports. In 2016, the country’s automotive output increased by 9% to 1.49mn units.