TIME FOR TURKEY

Turkey 2013 | INDUSTRY | B2B: AUTO MAKERS

The automotive sector is one of Turkey's most significant export drivers, with foreign firms using the country as a manufacturing hub.

Wolf-Dieter Kurz
WOLF-DIETER KURZ
President & CEO
Mercedes-Benz Türk
Haydar Yenigün
HAYDAR YENIGÜN
General Manager
Ford Otosan

What does Turkey mean to your company?

WOLF-DIETER KURZ Turkey is developing more and more toward an R&D and IT hub for us. In the meantime, we have now more than 300 researchers who are embedded in our worldwide development structure. This means we are not only doing business for our Turkish products, but also are doing R&D work for vehicles being produced throughout the world. Just as we were deeply involved in R&D projects for a new truck for BharatBenz in India, we are also involved in the international bus R&D network. In this regard, Turkey is very interesting because of its dynamic, young, and well-educated workforce. Of course, Turkey is no longer a low-cost country, but the ratio between the availability of people, their qualifications, and the salaries you have to pay is still well balanced. Our clear objective is to further increase Turkey's role as an R&D center.

HAYDAR YENİGÜN Our relationship goes back to 1928, when Vehbi Koç convinced Ford to install a dealership in Ankara. That was the first root that he planted for our company. In 1959, the company opened an assembly plant for commercial trucks and simple passenger cars. This was the first phase. In the second phase, we convinced Ford to start building Transits here. This was a very important step for us, because it took us to a certain level of business where we were able to demonstrate our good performance. From there, we continued to grow. In 1997, Ford decided to do business with Otosan, and our name became Ford Otosan. That was a historic day, and the result of it was our plant in Kocaeli. At first, we were making Transits for the domestic market, but then we started to produce the Transit Connect—a vehicle designed and built in Turkey by Ford Otosan. This was the first export business we started doing with Ford in 2003. That was real proof that Ford had invested in the right region. Currently, we've reached a capacity of 320,000 units, and we're exporting more than 72% of what we build. Ford Otosan is now doing business with Ford North America, Ford South America, and Ford China. We are a very important part of Ford, and our business is growing every day.

What trends do you foresee in Turkey's automotive sector for the medium term?

WDK There are three factors influencing passenger car sales. One is the wealth of the local population, which is expected to grow further. GDP per capita has developed extensively over the past 10 years. If Turkey continues to grow, GDP will increase—this means that more people will come into the range of income where they can afford to buy or finance a passenger car. Another influence is taxation—a different type of taxes would help to jump-start the automotive business. Looking at Europe, most countries have implemented a CO2 emission-based taxation. If Turkey shifts in that direction, it would definitely impact the market. The third factor is fuel prices. Everyone calculates the cost of buying and using a vehicle—not only the purchasing price, but also in running costs. Therefore, fuel price is one of the most significant factors besides the tax itself.

HY The sector is moving very fast. GDP per capita has increased from about $3,000-$5,000 to around $13,000. This phenomenon can be felt in everyday life; street life, car styles, and behavior are changing. In 2011, the volume of the Turkish automotive industry reached 907,000 units, which was the peak number. I'm sure that 2013 will be the second largest volume we experience. In terms of overall economic growth, all of the companies from abroad are willing to come to Turkey. There are 57 car brands competing in Turkey. In 2005 and 2007, our market share was 17%, and in 2012 we occupied a 13.6% market share as the top-ranked brand here. There is more competition because more companies are now coming to Turkey to get a share of this growing pie.