AUTOMOTIVE INDUSTRY

Emrah KUTLU
Zeynep AVCIOLU

AUTOMOTIVE INDUSTRY

Key driving sector of the economy

Closely tied to other sectors of the economy
Prime buyer in basic industries
Requires complex and multidisciplinary
technology

AUTOMOTIVE INDUSTRY
Intense competition in the market
Intensive R&D
Fastest developing sector in the global
economy

AROUND THE WORLD

1800s Europe
US Mass production
1990s Globalization

TURKEY
mid 1950s
1954 Trk Willys Overland Ltd.
Tofa, Renault, Ford
Joint ventures

MARKET STRUCTURE
Highly labor and capital intensive
Majority of costs for producing
- Labor
- Materials
- Advertising

MARKET STRUCTURE
PORTERS FIVE FORCES MODEL

MARKET STRUCTURE
The auto industry is considered to be an
oligopoly.
Today there are 15 companies in production of
which 5 are automotive producers and 10 are
commercial vehicle producers.

MARKET STRUCTURE
The automotive industry is one of the four
largest exporters.
Significant contribution to:
- National production and development
- Employment
- Level of technology

MARKET STRUCTURE
Table- 1 PRODUCTION IN TURKEY

Source: OSD, MVI Monthly Report

MARKET STRUCTURE
The companies in the sector are mainly located
in the Marmara Region.
Existing motor vehicle production capacity of
the automotive industry in Turkey is 1,015,000
units per year, as of 2002.

Table- 2 The Firms in the Automotive Industry

Source:OSD, 2002

Table- 3 The Leading Firms in the Industry and Their Sales

2004 yl ilk 500
firma sra no.

2003 yl
500 Byk
Firma Sra
No

Firma ve Messese
Ad

Bal
Bulunduu
Oda

zel Firma
Sra No

retimden
Satlar Net
(YTL)

FORD
OTOMOTV SAN.
A..

STANBUL

4,445,190,178

11

TOYOTA
OTOMOTV
SANAY
TRKYE A..

ADAPAZARI

3,348,031,394

OYAK-RENAULT
OTOMOBL
FABRKALARI
A..

STANBUL

2,966,839,536

TOFA TRK
OTOMOBL
FABRKASI A..

STANBUL

2,146,938,617

16

17

MERCEDES
-BENZ TRK
ANONM
RKET

STANBUL

12

1,218,993,109

Source: ISO, 500 Byk Sanayi Kuruluu Anketi, 2004

CONDUCT
LEADING EXPORTING COUNTRIES

France
Germany
Italy
UK

Table- 4
Source: www.wbr.co.uk, About the Turkish Automotive Industry

Table- 5 Automobile Imports( in units)

Years

Imports from EU

Total Imports

Share of Imports
from EU

1997

93,811

135,795

69%

1998

93,549

110,552

84%

1999

102,662

121,309

84%

2000

236,902

272,110

87%

2001

66,405

74,165

89%

2002

53,121

61,294

86%

Source: OSD, 2005

CONDUCT
PRODUCT DESIGN
-Design of Textile and Textile-Based Products Used in Automotive
-Designing Commercial and Public Transport Vehicles Like Trucks, Buses,etc.
- Development and Redesign Work for Currently Produced Automobiles Towards
New Markets
-Design Work Towards Developing Accessories and Products of Special
Functions
- Prototype Processes of Vehicles Designed Abroad and Design Work Concerning
Test Production

CONDUCT
PARTNERSHIPS
Tofa- Fiat
Otosan- Ford
Oyak- Renault

PERFORMANCE
SWOT ANALYSIS
The Strength of the Turkish Automotive Industry

Economically
a) Third major sector in Turkish manufacturing industry
b) Leading private sector investor
c) Driving force in manufacturing industry with its high value added
d) A reliable source of tax revenue with its totally registered production

PERFORMANCE
Human Knowledge
a) High-skilled human resources both in production and management
b) Sustainable and improvable competitive workforce with low labor cost
and culture of productivity
c) Accumulated technological know-how and rapidly growing investments
in
R&D
d) Quality management systems
e) Widespread distribution and marketing networks
f) Integration with world automotive industry since 1990s

PERFORMANCE
Geostrategic Importance
a)

The most developed automotive industry and a unique export and

production base in the region with close bilateral relations with EU, G8,
Eurasia

b)

Export experience and strong export markets

c)

Easy access to potential emerging markets

PERFORMANCE
The Weakness of the Turkish Automotive Industry
a) Unstable domestic market
b) Loss of quality and quantity in manpower as a result of the crises caused
by the weak economy of the country
c) In adequate investments in the sector
d) High costs of raw materials due to capacity utilization and production
below economies of scale
e) High sales taxes and gasoline prices
f) Lack of international strategy
g) Excess capacity
h) Insufficient export incentives

GROWTH AND FUTURE

- The automotive industry in Turkey has a significant potential
for progress and export capacity. With the completion of
global vehicle projects currently under progress, Turkey will
soon reach an annual vehicle export capacity of at least
500,000 units.
- In the near future, Turkey will be the worlds alternative
production center of vehicle and parts, and the automotive
sector will become one of the leading sectors of the
manufacturing industry, with exports of $8-8.5 billion.

GROWTH AND FUTURE

Basic elements of the national export strategy to reach these goals are;

Exporting of knowledge-intensive products with high added value

Focusing on markets with high purchasing power
Reaching the end consumer
Adopting quality by all industrial institutions
Establishing sales prices based on market conditions and customer
requirements
Following new developments
Focusing on R&D
Investing more in technology, human resources, information,
and quality training

CONCLUSION
Globalization will continue increasingly in the automotive sector.
The automotive industry in Turkey is in a position where it can produce at
global standards. It has developed its competitive capabilities, and a
structure that can apply common marketing strategies with licensing
countries.
The sector is able to create more added values.
Having a competitive structure, having the power to manufacture quality
and consistent products with new technologies, and most effectively, having
the cost-price advantage, puts Turkey in a position of being an important
manufacturing base and an important market, from the perspective of the
global automotive.

THANKS FOR YOUR

ATTENTION