The relationship between automobile loans and automobile production amount as a key factor for production strategy

Abstract

The main purpose of this study is to test the relationship between automobile production quantities and the amount of automobile loans. In the study, monthly data between the period of May 2000 and June 2011 were used and these data were gathered from the Electronic Data Delivery System of the Turkish Republic Central Bank. By examining time series characteristics of the data in hand, causality relationship has been analyzed with cointegration and vector error correction models. Empirical findings point out a long-run causality from the amount of the loans to automobile production quantity. The findings also show that automobile producers should consider the automobile loans as a variable when they determine their production strategies.