For a long time, measures to recover sectors that go through hard times due to the crisis have been insistently demanded. Furthermore, it was argued that the government is to focus on measures of this type. Recently, tax cuts were introduced for some products and the media started to publish stories on how the number of car trucks departing from Bursa increased and on the consumers forming queues in front of retailers.

As one observes such a bombardment of good stories, the initial response to the announced measures becomes 'finally a positive step is taken'. After all, it must be miraculous development as the media has been intensively commenting on it.

When you hide in your shelter after the bombardment (i.e. when you get away from the television, newspapers and the Internet), alone with the announced measures, you try to answer the following questions: With which of the four channels transmitting the crisis to Turkey this measure tackle? In other words, does it ease domestic loan tightening? Does it ease foreign loan tightening? Will it improve consumer and investor confidence? Will it, by easing the mentioned three problems, increase domestic demand? Will it improve export volume?

When such a perspective is adopted, it is immediately observed that the (so-called) fourth package involves some measures directed to improve domestic demand. On the other hand, the response to the rest of the questions is a strict 'no'.  Therefore, fourth measure package is not coherent. On the other hand, there are statements that a complementary package will also be announced. So, considering that it involves measures directed to one of the four channels transmitting the crisis to Turkey and that a new complementary package is on the way, can we, with inner peace, conclude that the fourth package is "better than nothing"?

While my mind was occupied with such questions, devil stroke my head. I visited the website of Foundation of Automotive Industrials and prepared two tables using the detailed information shown on the website. Table 1 shows total vehicle production (automobile, light commercial vehicles, truck, autobus, minibus, midi-bus and tractor) of the automotive industry, the number of exported vehicles and the number of vehicles sold within Turkey, in 2008. And the first column named 'Share' shows the percentage share of exports in total production and the percentage share of domestically sold vehicles in total production.

In the raw named 'sales in domestic market', the same table also gives the number of vehicles sold in domestic market in 2008. Moreover, it also shows the proportion of the total volume of domestically sold vehicles supplied by domestic production and by imports. The second 'Share' column shows the proportion of the total volume of domestically sold vehicles supplied by domestic production and by imports. The table also provides the same information for automobiles alone.

Table 1: Automotive sector market (2008)

What does the table indicate? It indicates that 80 percent of the total amount of goods produced by all sectors is exported. The same rate is higher for automobiles alone. Conclusion 1: Announced measures are related only to one-fifth of total production. Furthermore, more than half of the vehicles sold in domestic market are imported. And the same rate for automobiles is almost 70 percent. Conclusion 2: Announced measures are to a high degree in favor of imported goods. We are providing fiscal stimulus for countries we import from.

Table 2 gives information on the developments in the sector in the first two months of 2008 and 2009. The real fall is in exports and in the share of vehicles sold in domestic market through domestic production. Volume of vehicle imports does not fall down at the same rate. Conclusion 3: Also as the fall in demand for imported goods is lower, announced measures seem to increase the level of imports.

Table 2:

Of course, as the number of vehicles sold increases, it creates significant commercial activity and stimulates the market even the mentioned rise is to a high extent in favor of imports. It is right; however, there is a lot more to say.

This commentary was published in Radikal daily on 19.03.2009