Crises are coming one after another! The effects of the war are growing day by day.

The host Abdurrahman Yazıcı welcomed Prof. Dr. İbrahim Güran Yumuşak, Dean of the Faculty of Business at Istanbul Sabahattin Zaim University, in the Haberler.com studio. In the program, which addressed the economic war waged by the US and Europe against China, it was emphasized that the crisis in the European automotive sector is an indicator of the overall economic downturn on the continent.

Pointing out that famous European automotive companies have been declaring bankruptcy one after another, host Abdurrahman Yazıcı asked his guest Prof. Dr. İbrahim Güran Yumuşak about the reasons for these bankruptcies. Prof. Dr. Yumuşak highlighted the high production costs in European countries and referred to China's advantages in labor and energy costs. Prof. Dr. İbrahim Güran Yumuşak continued his speech as follows: The US economy is in serious competition with the Chinese economy. The processes occurring in the automotive sector are indicative of other sectors as well. We are facing a serious competition between the US, Europe, and China. For many years, China has been strengthening its production power and diversifying its supply chain. It has also reaped the results of this. The process that started with lower wages was supported by the provision of cheaper raw materials and lower energy inputs. We observe that China has entered global markets quickly and effectively.

EUROPEAN ECONOMY FACES TOUGH DAYS AHEAD

"The energy crisis that Europe has recently experienced has brought about a serious bottleneck. The European economy is in a significant contraction that started with the pandemic and continued thereafter. The US continues to utilize this process most effectively. We will likely see this being used even more effectively during the Trump era. Indeed, declaring that it will impose additional taxes on imported products is actually the first stage of this. All these developments have already been a challenging process for the automotive sector in Europe. The energy bottleneck and rising costs due to the Russia crisis, as well as America's protectionist approach, seem to pose serious challenges for the European economy and automotive sector moving forward."

CHINA IS OUTPACING EUROPE IN AUTOMOTIVE

"As competition with China continues, it is quite natural for this result to occur, especially when we add the management and the crisis with Ukraine. Throughout this process, Europe is gradually trying to transition from fossil fuels to electric vehicles. Both the transition has a cost, and as a competitive factor, China is in a more advantageous position."

EUROPE IS PREGNANT WITH ENERGY CRISES

"Before the Russia crisis, Europe had taken some measures regarding nuclear energy, especially concerning Germany's shutdown, but when the energy supply from Russia was restricted, it was forced to use nuclear energy and had to close some heavy industry facilities that required high energy inputs. They managed to get through that winter due to favorable winter conditions, but ultimately, using energy, which constitutes 30%-50% higher costs, is not a sustainable situation for them."

WILL EUROPE RAISE THE BANKRUPTCY FLAG?

"China has long remained outside of copyright and patent agreements and has been able to incorporate these technologies into its sectors without bearing the costs. This situation has provided significant advantages to China. China is very fortunate in using the technologies of Europe and the US. It is highly unlikely that Europe can continue to operate under the current conditions."