No Scrappage Scheme in Turkey

Even if scrappage schemes have proved to be very efficient in most countries around the world, especially in the United States, Turkey won't launch such a campaign, Industry Minister Nihat Ergun said in a statement. The government was expected to start offering incentives to buyers who agreed to trade-in an old model in return for a greener vehicle but this won't happen in the near future, the official said.

"There shouldn't be any expectations in the short term for a scrappage plan, a scrappage plan won't happen in the short term," Yeni Safak newspaper reported Ergun as saying, according to a report by Reuters.

The automotive sector is currently the main exporting branch in Turkey, with joint ventures involving large global automakers such as Ford, General Motors, Hyundai, Fiat and Honda. Furthermore, several companies have already announced plans to set up new production facilities in Turkey, including Chinese firms who are willing to invest millions of dollars to expand their local business.

Rejecting a scrappage plan seems pretty awkward, especially if considering the fact that automotive analysts are forecasting a new decline in Turkey this year. Furthermore, automakers are expecting a drop of 20 percent in production volumes in 2010.

"The Turkish automotive market is set to face a bumpy road ahead over the next six months ... Despite very low base year, we expect that Turkish auto sales will decline by about 8 percent year-on-year in the fourth quarter of 2009 and eventually end up the year around previous year's levels," Oyak Securities senior analyst Cemal Demirtas told Reuters.