TBY talks to Fatih Tamay, Sales & Marketing Director of Anadolu Isuzu Otomotiv, on the venture between the Anadolu Group and Isuzu, production for export and domestic consumption, and the outlook for electric vehicles.
TBY The Anadolu Group and Isuzu joint venture was the first Turkish/Japanese joint venture in the automotive industry. How has this relationship developed?
FATİH TAMAY We signed an agreement at the end of 1983 to begin the production and sale of commercial vehicles to Turkey. At that time there were no Japanese commercial vehicle producers in Turkey. Before then, Anadolu Automotive had only been producing the Czechoslovakian Skoda trucks. Our partnership with Isuzu started as a joint venture, but it has become a shareholder of Anadolu Isuzu. We have produced approximately 120,000 vehicles in Turkey.
After 1987, we started producing Isuzu midibuses. Turkish mechanics and engineers also started to design and build new Isuzu midibuses. Isuzu then decided to put its brand name on our buses, meaning their quality was accepted by Isuzu. Isuzu is a significant international player with commercial vehicles and diesel engines all over the world—it is in approximately 100 countries and its core business is commercial vehicles, especially trucks and diesel engines. In 1997, Anadolu Isuzu listed on the Istanbul Stock Exchange (İMKB), where we floated approximately 15% of our shares. In that period there were not many companies on the İMKB, especially in the automotive sector. Maybe we were not the first, but we were one of the first two or three. Being a listed company is very important for developing countries because it means that all information and details are open to the public.
What share of production is devoted to the domestic market and what share is being exported?
We started to export in 1994 and now export products to about 26 different countries, especially Isuzu buses. Most of them are European countries. In 2012, approximately half of our bus production was going to the Turkish market and half was exported. In the coming years, the ratio may be closer to 40-60 because exports are very important for the company, and especially for Turkey.
What are your key export markets?
Europe is very important, as is North Africa. Some 40% of total exports go to the Algerian market. The Algerian economy is stronger than some surrounding economies, due to its political stability—it will not be facing any massive political fluctuations. However, we mostly export to EU countries. In 2011 the Turkish automotive industry produced nearly 1.2 million units and 70% were exported, mostly to European countries, North Africa, and Russia. In the near future Turkey will be producing approximately 1.5 million units, including passenger cars and commercial vehicles. Of that total, approximately 1 million units will be exported.
What is your position in the Turkish commercial vehicle market?
Today, the company produces in four different areas: trucks, light trucks, midibuses, and Isuzu D-MAX pickups. For the pickups we are number two in the Turkish market and we are the leader in trucks. In terms of light trucks, we place third or fourth, and in midibuses we place second. Exports remain the most significant aspect of our operation, however. Approximately 50% of the company’s midibus production is exported. That makes Anadolu Isuzu an important player in this country.
Where are you targeting your R&D expenditure?
Anadolu Isuzu has two factories: a truck factory and a bus factory. For new models we make investments year by year. Over the last couple of years, we have designed two new models. In 2012 we entered the nine-meter bus segment, which will be important for Turkey, as municipalities around the country are changing the face of public transportation and introducing thousands of new nine- and 12-meter buses. This will give us plenty of new business.
How has the company’s relationship with Manisa city municipality developed?
The municipality supports Anadolu Isuzu. There are an increasing amount of significant demand sources for midibuses, and in the long term municipalities want to satisfy their citizens. That’s why, within three years, we will double our bus manufacturing output. In the past, Turkey imported buses, but over recent years it has become one of Europe’s major bus producers. This potential is huge, and sales and exports will continue to increase.
How committed is the company to environmental sustainability?
All of our products fit EU regulations regarding the environment. That is why this year for example, we have started to Euro 5 diesel engines in our trucks and buses to meet European standards.
Is the time right for electric vehicles?
The bus has the most potential, especially in public transportation, in this respect and I expect to see a rapid change on that side, more so than on the commercial side. Although it may be a bit early for the nine- and 12-meter buses, in the coming years Turkey and Europe will begin to use electric buses. We do, however, need to worry about the economic connotations. Electric buses don’t use petrol, but batteries. The state of batteries these days is still not green enough, however. That’s why I believe we’ll see this become a reality within a few years’ time.
How will Anadolu Isuzu take its share of the $75 million in Automotive Exports by 2023?
I expect Anadolu Isuzu to grow double or more by 2023. All of our plans and targets build on this reality. We have got really big potential—not only in Turkey.
© The Business Year