Fraud erodes trust in Turkish transportation
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Oluşturulma Tarihi: Nisan 06, 2009 00:00
ISTANBUL - In an attempt to escape banks, some transportation firms change their vehicle identification numbers and the color of the trailers in their fleet. Such irregularities are eroding trust in the industry as a whole, says Murat Tokatlı, chairman of the Association of Trailer Manufacturers. ’Our customers are unable to obtain funding for trailers,’Tokatlı complains
Some transportation companies that are in distress and unable to pay their loans resort to fraud, eroding confidence in the sector, the head of a Turkish association has warned.
These firms change their vehicle identification numbers and colors of the trailers in their fleet in order to escape from banks. Such irregularities erode financial institutions’ trust in the transportation industry, said Murat Tokatlı, chairman of the Association of Trailer Manufacturers, or TREDER. "Therefore, customers are unable to obtain funding for trailers. This forces producers to shoulder costs and risks."
Tokatlı said 1,000 trailers and 300 trucks are "lost" at present due to the irregularities. He also said some firms have new traffic registrations for previously-used vehicles after having small producers change their vehicle identification numbers and colors.
Erosion of confidence
"Such irregularities started six months ago. The losses deriving from this have reached 25 million euros. The vehicles we produced get lost, and another brand new vehicle emerges. Such moves are completely in violation of the manufacture, amendment and assemblage regulations for vehicles," said Tokatlı.
Irregularities in type approval certificates have also been an ongoing issue in the sector, Tokatlı said. Despite obtaining just one type approval certificate, some firms produce many vehicles, he said.
Explaining the irregularities, he said; "Some producers manufacture a type of product without having its certificate. Then they purchase the certificate and have the vehicle’s traffic registration. Besides being against the law, this also is a threat for safety. It is crucial to establish an audit mechanism."
Commenting on financing problems stemming from the irregularities, he said; "The irregularities have eroded the trust of finance institutions into the transportation sector, which is the purchaser of trailers. The customers are unable to obtain financing for trailers. Maybe half of the trailer sales in Turkey are made with producers’ loans. The sector is under threat, and therefore we are obliged to provide the funding. Producers shoulder the cost and risk of the financing."
Tokatlı said it was leasing companies that previously financed trailer sales. "When the value added tax [VAT] rate was 1 percent for leasing transactions, 30 percent of our sales were made via leasing. However, with last year’s amendment that raised the rate to 18 percent, our leasing leg was completely broken. If the VAT rate drops to 1 percent again for some time, the trailer sector will be relieved," he said.
With the addition of the economic crisis to the existing problems, Turkey’s trailer production declined 50 percent in the first two months of the year, compared to the corresponding period of 2008, Tokatlı said. Having grown significantly between 2004 and 2007, the sector contracted 15 percent last year, he said. The sector produced 10,654 vehicles in 2008, and exported 35 percent of the output, Tokatlı said. Trailer exports, which totaled $18 million in 2002, rose to $190 million last year, he said.
This year will be tough, according to Tokatlı, as the European market, which grabs a substantial proportion of Turkey’s exports, is in distress. Africa, which is the most active market at present, is facing problems in financing, he said.
These firms change their vehicle identification numbers and colors of the trailers in their fleet in order to escape from banks. Such irregularities erode financial institutions’ trust in the transportation industry, said Murat Tokatlı, chairman of the Association of Trailer Manufacturers, or TREDER. "Therefore, customers are unable to obtain funding for trailers. This forces producers to shoulder costs and risks."
Tokatlı said 1,000 trailers and 300 trucks are "lost" at present due to the irregularities. He also said some firms have new traffic registrations for previously-used vehicles after having small producers change their vehicle identification numbers and colors.
Erosion of confidence
"Such irregularities started six months ago. The losses deriving from this have reached 25 million euros. The vehicles we produced get lost, and another brand new vehicle emerges. Such moves are completely in violation of the manufacture, amendment and assemblage regulations for vehicles," said Tokatlı.
Irregularities in type approval certificates have also been an ongoing issue in the sector, Tokatlı said. Despite obtaining just one type approval certificate, some firms produce many vehicles, he said.
Explaining the irregularities, he said; "Some producers manufacture a type of product without having its certificate. Then they purchase the certificate and have the vehicle’s traffic registration. Besides being against the law, this also is a threat for safety. It is crucial to establish an audit mechanism."
Commenting on financing problems stemming from the irregularities, he said; "The irregularities have eroded the trust of finance institutions into the transportation sector, which is the purchaser of trailers. The customers are unable to obtain financing for trailers. Maybe half of the trailer sales in Turkey are made with producers’ loans. The sector is under threat, and therefore we are obliged to provide the funding. Producers shoulder the cost and risk of the financing."
Tokatlı said it was leasing companies that previously financed trailer sales. "When the value added tax [VAT] rate was 1 percent for leasing transactions, 30 percent of our sales were made via leasing. However, with last year’s amendment that raised the rate to 18 percent, our leasing leg was completely broken. If the VAT rate drops to 1 percent again for some time, the trailer sector will be relieved," he said.
With the addition of the economic crisis to the existing problems, Turkey’s trailer production declined 50 percent in the first two months of the year, compared to the corresponding period of 2008, Tokatlı said. Having grown significantly between 2004 and 2007, the sector contracted 15 percent last year, he said. The sector produced 10,654 vehicles in 2008, and exported 35 percent of the output, Tokatlı said. Trailer exports, which totaled $18 million in 2002, rose to $190 million last year, he said.
This year will be tough, according to Tokatlı, as the European market, which grabs a substantial proportion of Turkey’s exports, is in distress. Africa, which is the most active market at present, is facing problems in financing, he said.