In August, industrial production fell 1.9% year on year and 1% month on month. The decline was uneven: capital goods fell 5.1% annually and non-durable consumer goods 4.1%, while high-tech production grew 14.5%.
Reading this simply as “we’ll sell less” misses the cost impact. The real issue: when production falls but fixed costs remain unchanged, each remaining unit becomes more expensive to produce.
Consider a Sellf hypothetical: a non-durable goods manufacturer has a unit cost of TRY 100, including TRY 30 in allocated fixed costs. If volume falls 4.1%, with total fixed costs and variable cost per unit unchanged, fixed cost per unit rises approximately 4.3%. Total unit cost reaches TRY 101.28—approximately 1.3% higher. At unchanged prices, profit falls TRY 1.28 per unit. This is a scenario calculation, not industry data.
We build the plan around three questions:
- Cost: Which expenses remain unchanged as volume falls?
- Margin: At what volume do we fall below target profitability?
- Price: What happens if passing costs through further reduces demand?
For Sellf, growth engineering means connecting volume forecasts to margin thresholds.
Do you know the critical volume threshold for your fixed-cost base?