Reading the cards right when it came to Turkey’s need to industrialize, we began investing in the automotive sector in the 1950s. Through the investments we have made over the years, we have become Turkey’s leading automotive company, responsible for nearly 50% of the sector’s production and exports. Not only have we transformed the turkish automotive sector into a global player, we have turned it into an export champion.
With a clear understanding of what the consumer wants and needs, we intend to expand our product portfolio in the near future by investing in new technologies. We plan to diversify our export markets and, by placing a premium on R&D and innovation, both vital in today’s world, we will remain a global engineering and production hub for our business partners.
Koç Group took the lion’s share (24.5%) of the automotive market, which grew by 9%, in 2013. Ford Otosan continued to lead the automotıve market wıth 12.8% share while Tofaş obtained 11.2% market share, putting it in fourth place.
Developments in the automotive sector in 2013
Competition was stiff in the global and domestic automotive sector in 2013. The European automotive market had its worse year of passenger car sales since 1995. According to the European Automotive Manufacturers Association, sales fell by 1.8%. Meanwhile, the European commercial vehicle market increased by a slim 0.8%.
Even though the pace of contraction in the European automotive market slowed down and decreased by 1.4% in total, the UK and Spain were the only markets that expanded in 2013.
Turkish automotive industry sales rose 9% in 2013. Low interest rates and a high consumer confidence index over the first five months of the year had a favorable impact on passenger car sales. Developments at home and abroad starting from June onwards, pushed up foreign exchange and interest rates; eventually, expectations of increased prices and financing costs led to early demand. Despite of normally sluggish Ramadan and the Feast of Ramadan, sales were strong, setting a new July record and achieving the second highest level for August since 1996.
2013 growth in the sector stemmed entirely from the 19% increase in the sales of passenger cars. Because of relative economic stagnation, despite it being a low base year, the decline in commercial vehicle sales continued. Sales of light commercial vehicles dropped by 21% while medium commercial vehicle and truck sales declined by 6%.
With the shift away from light commercial vehicles to passenger cars, the share of the latter in the entire industry rose from 68% in 2012 to 74.4% in 2013. Total sales in 2013 were 893,000, which included 665,000 passenger cars, 189,000 light and medium commercial vehicles and 40,000 heavy commercial vehicles. While passenger car sales in 2013 reached record levels, the increase in imports had a negative impact on the current account deficit. Total sales in 2013 were the second highest in history, following 2011. Throughout the year, there was heated competition in the sector.
The bus market expanded by 67% in 2013, particularly due to increased demand in the urban passenger transportation submarket. While the small bus market grew by 28%, the truck market declined by 8%. Developments in neighboring countries had a negative effect on the trailer sector, particularly in frigorific transportation. The defense industry strategy of placing priority on national and local projects continued.
2013 Farm tractor market developments
In 2013, farm tractor sales rose 4% to 52,286, according to Turkish Statistical Institute traffic data. Abundant precipitation in winter and spring had a favorable impact on cereals (rice and barley), corn, vegetable and fruit yields, though not on sunflower and cotton. Commodity prices in 2013 were comparable to those of the year before. And, low cost credit for retail sales financing continued. In general, state subsidies were maintained and there was a 17% increase in direct and indirect supports. Moreover, Ziraat Bankası support for purchases of tractors costing over TL 35,000 increased from 25% to 50%.
Koç Holding Automotive Group
Koç Holding maintained its leadership with a 24.5% share in the automotive market, which grew by 9%, above expectations in 2013. Ford Otosan sustained its leadership in the automotive market with a 12.8% market share while Tofaş was in the fourth place with an 11.2% market share.
Ford Otosan finished the construction of its second plant in its Kocaeli factory area for the new Ford Courier and began test production. Through this investment, the current 330,000 vehicle annual capacity will increase to 415,000. In 2013, Ford Otosan’s flexible strategy enabled it to sell 114,141 vehicles and to retain its market leadership for the 12th consecutive year with a 12.8% market share.
Linea, manufactured by Tofaş, was the best selling passenger car model with 37,537 units, whereas Doblo was the leader in light commercial vehicle segment with 22,443 units. Tofaş took second place in light commercial vehicles, with a 25.1% market share. It was fourth in total sales with an 11.2% share of the market. Sales of the Alfa Romeo, Lancia and Jeep brands performed well, with total sales growing by 30% over those of the year before.
Otokoç Otomotiv leads the short-term car rental sector with its 5,400-vehicle fleet. Combined with its 18,950-vehicle operational leasing fleet, it has a total fleet of 24,350. As an Avis licensee, it ranks second in the Asia, Europe and Africa region.
Otokar celebrated its 50th anniversary by growing 40% in 2013. The Company, which devotes 5% of revenues to R&D, expanded its portfolio with new products. Otokar’s buses have been Turkey’s most preferred bus brand for four years. In addition, the Company continued to remain the country’s leading military land systems producer. Altay, the strategically important national tank project, underwent its first two prototype winter testing and passed critical design testing. Having completed the fixed firing tests, production of the third and fourth prototypes has begun. Otokar also marketed the Atlas truck, the fruit of collaboration with China’s Foton company, one of the largest commercial vehicle manufacturers in the world.
TürkTraktör exported 14,402 farm tractors in 2013 and sold 24,624 in the Turkish market. Sales began to grow in the 3rd quarter of 2012, a trend that continued in 2013, as well. By the final quarter of 2013, domestic sales had increased by 33% and exports by 13%, compared to those of the same period the year before.