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    Turkey moves to boost automakers, Renault temporarily shuts plant

    HotNewsTurkey with wires
    24.10.2008 - 13:23 | Son Güncelleme:

    Turkey is working on steps to support its automakers by reducing loan costs in the face of the global financial crisis and worsening market conditions, while Renault temporarily shuts down its Turkish plant. (UPDATED)

    A reduction in the special consumption tax on vehicle sales could also come under consideration, Reuters reported citing unnamed government sources. 

    A sharp slowdown in the Turkish economy has hit the automotive sector, compounded by the weakening of key export markets across Europe.

    "At this stage the most likely option would be to reduce loan costs for domestic manufacturers through the (state) Eximbank," Reuters quoted one government source as saying.

    "In the second stage a tax cut to reduce stocks and increase production could come onto the agenda."

    Shares in carmaker Tofas, a joint venture of Italy's Fiat and Turkish conglomerate Koc Holding, were up 2 percent on hopes of a boost to the sector, while the main share index was 2.7 percent lower.

    Other vehicle manufacturers in Turkey include Oyak Renault, Ford Otosan, Toyota and Hyundai.

    Finance Minister Kemal Unakitan had told reporters on Thursday evening that the government was working on steps to support automakers.


    French car company Renault, said it would shutter almost all of its French and some of its foreign factories including plant in Turkey's northeastern Bursa province.


    A Renault spokesman said production would be halted for one to four days at the Bursa plant in Turkey, a Moscow plant and at Novo Mesto in Slovenia, however this period is between one or two weeks for the company’s major French plants, AFP reported.


    "We are in a period when, without doubt, markets are collapsing and to avoid a brutal degradation in the company’s situation, we have to manage stocks in an extremely tight way," the spokesman said insisting the closures are temporary.


    The firm has already announced 4,900 job cuts and said Thursday that production would be cut 20 percent in the final three months of the year because of falling sales.



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