Automotive labor costs in Türkiye approach $3.123
File photo shows robotic arms assemble vehicle frames on an automated production line at an automotive factory, in Türkiye. (AA Photo)
Automotive labor costs in Türkiye have risen sharply, approaching $3.123, bringing production expenses closer to those in Japan, according to Anadolu Group Automotive Group President Bora Kocak.
Kocak shared his insights on the rising costs and their impact on the industry during an interview on CNBC-e.
Rising production costs challenge competitiveness
Kocak stated that manufacturing costs in Türkiye’s automotive sector have escalated significantly. “We have no chance of managing a cost increase of 3 to 3.5 times through value-added production. Even if we resolve our own labor costs, our suppliers still face the same issue,” he said.
He pointed out that rising expenses are eroding profitability and weakening the sector’s competitive strength.
Kocak noted that labor costs at Anadolu Group’s Isuzu factory are now comparable to those of manufacturing plants in Japan.
Labor costs near Western European levels
Kocak attributed the surge in costs primarily to inflation in labor wages. “I can say that manufacturers’ costs have increased significantly due to inflation-driven wage hikes. Three years ago, metal industry workers earned less than $1.041, but today, their wages are nearing $3.123. In fact, I can say that we have reached the same labor cost levels as some Western European countries,” he said.
Export and revenue goals for 2024
Despite rising costs, Anadolu Group aims to expand its market reach.
Kocak emphasized the company’s focus on increasing exports to countries that conduct trade in U.S. dollars. The group targets total revenue of at least $520.6 million this year, with $156 million to $166 million expected to come from exports.
