COVID-19 Crisis Response

and Resilience Project

AUTOMOTIVE INDUSTRY
ANALYSIS REPORT
and GUIDE
TR41 REGION
(Bursa, Eskişehir, Bilecik)
AUTOMOTIVE SECTOR ANALYSIS REPORT AND GUIDE
TR41 Region (Bursa, Eskişehir, Bilecik)
ISBN:
© All rights reserved. R.T. Ministry of Industry and Technology General Directorate of Development
Agencies, June 2021, Ankara.
Reproduction of this publication for educational or other non-commercial purposes is
authorized without prior written permission from the copyright holder provided the source is
fully acknowledged. Reproduction of this publication for resale or other commercial purposes is
prohibited without prior written permission of the copyright holders.

R.T. Ministry of Industry and Technology General Directorate of Development Agencies

Adress: Mustafa Kemal Mahallesi Dumlupınar Bulvarı, 2151. Cad. No: 154/A, 06510 Çankaya,
Ankara
Tel: 0 (312) 201 50 00
www.sanayi.gov.tr

Project Team:
R.T. Ministry of Industry and Technology General Directorate of Development Agencies
Ahmet Şimşek, Head of Department
Dr. Mehmet Emin Özsan, Expert
Dr. Onur Karakurt, Expert
Eda Doğan, Expert
Ahmet Alıcı, Expert
Fatma Avşar, MARKA, Expert
Candan Umut Özden, MARKA, Head of Unit

UNDP Turkey
Mustafa Ali Yurdupak, Inclusive and Sustainable Growth Portfolio Manager
Arzu Karaarslan Azizoğlu, Local Economic Development Projects Manager
Aslı Aygün Gürsoy, Project Assistant
Zeynepsu Gülek, Project Intern
Deniz Şilliler Tapan, Project Communication Expert

Development Agencies Working Group Members for Automotive Sector:

Cem Bayrak
Yusuf Öztaş
Faruk Er
Yasin Dalgıç
Burak Canbulat
Elif Zeytin
Mustafa Coşkun

Prepared by: Dr. Hamdi Giray Reşat

Design: Carnavale Ad&Pr

For citation: Automotive Sector Analysis Report and Guide TR41 Region (Bursa, Eskişehir, Bilecik);
R.T. Ministry of Industry and Technology General Directorate of Development Agencies, 2021,
Ankara, Turkey
Automotive Sector Analysis Report and Guide was prepared within the scope of the "COVID-19
Resilience and Response Project" financed by the Government of Japan, carried out by the
United Nations Development Program (UNDP) in cooperation with the General Directorate of
Development Agencies of the Ministry of Industry and Technology. This report is one of the 25
Region-Based Fragile Sector Reports prepared within the scope of the project.
 COVID-19 Crisis Response
and Resilience Project

AUTOMOTIVE INDUSTRY
ANALYSIS REPORT
and GUIDE
TR41 REGION
(Bursa, Eskişehir, Bilecik)
4
CONTENTS
Contents iii
List of Tables v
List of Figures vi
Abbreviations vii
Executive Summary ix
1 Introduction 1
2 Methodology 3
3 Automotive Industry Profile 7
3.1 General Outlook of the Automotive Industry in the World 7
3.2 Overview of the Automotive Industry in Turkey 10
3.3 Overview of the Automotive Industry in TR42 Region 12
4 Effects of COVID-19 Outbreak on the Automotive Industry 15
5 Trends Specific to the Automotive Industry 20
5.1 Special Trends in the Automotive Industry in the World 20
5.2 Industrial Trends in Turkey 24
5.3 Industrial Trends in TR42 Region 26
6 The Current State of the Automotive Industry 29
6.1 Primary Research Results 29
6.1.1 Survey Study 29
6.1.2 Focus Group Meeting 35
6.2 Industrial Analysis 37
6.2.1 Value Chain Analysis for the Automotive Industry in TR42 Region 37
6.2.2 TR42 Region Automotive Industry PESTLE Analysis 38
6.2.3 SWOT Analysis for the Automotive Industry in TR42 Region 40
6.2.4 Five Power Analysis for the Automotive Industry in TR42 Region 41
6.3 Gap Analysis for the Automotive Industry in TR42 Region 44
7 Horizontal Issues 48
7.1 Crisis Management 48
7.2 Resource Efficiency 48
7.3 Climate Change 49
7.4 Gender Equality 50
8 Short, Medium and Long Term Strategies and Action Plans 52
9 Policy Recommendations 71
10 TR42 Region Automotive Industry Analysis Summary 74
11 Conclusion and Evaluation 76
References 79
Annexes 82
Annex 1. TR42 Region Focus Group Meeting Participant List 82
Annex-2. TR42 Region Automotive Industry R&D Centers List 83
Annex-3. List of Products Planned to be Supported under HAMLE Program 84

i
 TABLES
Table 1. Companies and Employment Numbers According to TR42 Region Sub-NACE Codes
based on Provinces 12
Table 2. Summary Table of Investment Incentive Documents Given in the Field of Motor Vehicles
in TR42 Region 14
Table 3. Short-Term (0-1 Year) Effects of the COVID-19 Outbreak on the Automotive Industry 15
Table 4. Medium-Term (1-3 Years) Effects of the COVID-19 Outbreak on the Automotive Industry 18
Table 5. Global Trends in the Automotive Industry 21
Table 6. Turkey Automotive Industry Trends 24
Table 7. TR42 Region Automotive Industry Trends 26
Table 8. Distribution of TR42 Region Surveys Based on Sub Sectors 29
Table 9. PESTLE Matrix of TR42 Region 39
Table 10. SWOT Matrix of TR42 Region 40
Table 11. Gap Analysis of TR42 Region 44
Table 12. TR42 Region Automotive Industry Strategy and Action Table 54

ii
FIGURES
Figure 1. Work Flow Chart 3
Figure 2. Regional Distribution based on Global Automotive Industry Export Capacities
[Trademap, 2021] 7
Figure 3. World Vehicle Sales Volumes [OICA, 2020a] 8
Figure 4. World Vehicle Production Volumes [OICA, 2020b] 8
Figure 5. Turkey Vehicle Production Numbers [OSD, 2020] 11
Figure 6. Overview of the Automotive Industry in TR42 Region 12
Figure 7. TR42 Region Foreign Trade Volumes [TurkStat, 2020c] 13
Figure 8. Timeline of Industrial Trends 21
Figure 9. Export Status and Company Structure of the Companies Participating in the Survey 30
Figure 10. Problems Encountered During the COVID-19 Outbreak 30
Figure 11. Major Barriers and Bottlenecks Affecting Business the Most 31
Figure 12. Problems in Raw Material Supply Processes 31
Figure 13. Short-Term Actions/Expectations of Companies 32
Figure 14. Risk Factors Affecting Sustainability 32
Figure 15. Factors Affecting the Level of Competition 33
Figure 16. Transformation Activities of Companies 33
Figure 17. Future Strategies of the Companies 34
Figure 18. General Value Chain Flow of the Automotive Industry 37
Figure 19. Porter 5G Relation Matrix 43
Figure 20. Regional Gap Analysis 47
Figure 21. Positioning Actions in Different Spaces and Time Intervals 52

iii
 ABBREVIATIONS
EU European Union
USA United States of America
ADR European Agreement concerning the International Carriage of Dangerous Goods by Road
AHIKA Ahiler Development Agency
AR/VR Augmented Reality / Virtual Reality
R&D Research and Development
BEBKA Bursa, Eskişehir and Bilecik Development Agency
UN United Nations
CE Conformity to Europe
CRM Customer Relationship Management
ERP Enterprise Resource Planning
SWOT Strong, Weak, Opportunity and Threat
IPA Instrument for Pre-Accession Assistance
ISO International Standard Organization
IT Information Technologies
ITS Intelligent Transportation Systems
JV Joint Venture
VAT Value Added Tax
SME Small and Medium Enterprises
KOSGEB
T.C. Küçük ve Orta Ölçekli İşletmeleri Geliştirme ve Destekleme İdaresi Başkanlığı (TR Small and Medium
Enterprises Development and Support Administration)
M&A Mergers and Acquisitions
MARKA Doğu Marmara Kalkınma Ajansı (East Marmara Development Agency)
MES Manufacturing Execution System
MÜSİAD MIndependent Industrialists' and Businessmen's Association
NACE Statistical Classification of Economic Activities in the European Community
NAFTA North American Free Trade Agreement
ODD Automotive Distributors Association
OECD Organization for Economic Co-operation and Development
OEM Original Equipment Manufacturer
OIZ Organized Industrial Zone
OIA Automotive Industry Association
OAS Automotive After Sales Products and Services Association
SCT Special Consumption Tax
PESTLE Political, Economic, Social, Technological, Legal and Environmental
SDG Sustainable Development Goals
NGO Non Governmental Organization
TAYSAD Vehicle Supply Manufacturers Association
CBRT Central Bank of the Republic of Turkey
TOBB Turkey Union of Chambers and Commodity Exchanges
TOGG Turkey's Automobile Enterprise Group
TSO Chamber of Commerce and Industry
TUBITAK Scientific and Technological Research Council of Turkey
TurkStat Turkey Statistical Institute
TÜRKAK Türk Akreditasyon Kurumu (Turkish Accreditation Agency)
TÜSİAD Turkish Industrialists' and Businessmen's Association

iv
UNCTAD United Nations Conference on Trade and Development
UNDP United Nations Development Program
SEIC Supporting the Enhancement of International Competitiveness
V2I Vehicle to Infrastructure Communication
V2V Vehicle to Vehicle Communication
V2X Vehicle to Everything Communication
VMI Vendor Managed Inventory
WEF World Economic Forum
WHO World Health Organization
WTO World Trade Organization
ZAFER Zafer Development Agency

v
 FOREWORD
The COVID-19 pandemic has gone beyond a
health crisis and turned into a global problem,
due to its impacts felt in all areas of life and
all over the world. It is obvious that the
problems caused by the pandemic, which has
turned into a serious threat to all humanity,
can be solved with a sustainable and fair
understanding that requires international
solidarity, cooperation, and common solution
ideas.
The restrictions applied as a necessity of the
pandemic led to slowdown in production,
decrease in labor supply, delay in the supply
of intermediate goods and raw materials, and increased logistics costs in our country as well
as all over the world. Therefore, it is essential for sustainable development that policies should
focus on the fragile sectors most affected by the pandemic in order to ensure the continuity
of economic activities and accelerate the recovery.
By closely following the changes observed in the global system, Turkey carries out a
comprehensive transformation in every field from education to health, from manufacturing
industry to tourism, from industrial zones to research infrastructures.
Our development agencies, which perform their activities under the coordination of the
Ministry of Industry and Technology, carry out studies at the regional level in order to reduce
the negative impacts of COVID-19 on the national and regional economies and to identify
the sectors most affected by the pandemic. One of our works in this field is the Government
of Japan funded COVID-19 Resilience and Response Project, which we have implemented
together with the United Nations Development Program (UNDP), the General Directorate of
Development Agencies, and our development agencies.
Within the scope of the project, 25 region-based “fragile sector analysis reports” were prepared
in the textile, logistics, food, machinery, and automotive sectors, which are of key importance
for the Turkish economy. These reports, taking into account global developments and trends,
offer new policy recommendations that will increase the resilience of the relevant sectors
against crises. In addition, the “New Market Analysis” and “Product Space Analysis” reports,
which cover studies to increase the export potential of enterprises operating in fragile sectors,
were also completed within the project. These reports aimed to create road maps to support
the business continuity of fragile sectors and to prevent supply chain disruptions.
We believe that the policy recommendations in these reports, which are in line with the targets
within the framework of our national technology move, will support inclusive and sustainable
development; it will carry Turkey to a more strategic point in the international trade and
investment decisions that will be reshaped in the post-COVID-19 period and will contribute to
our country's 2023 goals.
I would like to thank the Government of Japan for their generous contribution to mitigating the
economic impact of the COVID-19 crisis, ensuring economic recovery, strengthening sectors,
and transforming SMEs in this process.
I congratulate all our stakeholders, particularly UNDP Turkey management and project team,
and the employees of the Development Agencies General Directorate and development
agencies, who have made these studies realised and turn them into concrete outputs, and I
hope that the reports will contribute to the future of our country.
Mustafa Varank
Republic of Turkey Minister of Industry and Technology

vi
FOREWORD
The global context for development has
fundamentally changed with the COVID-19
pandemic. The pandemic created many
new obstacles to overcome as well as new
problems to be solved. Although COVID-19
started as a health crisis, it has turned into
both a humanitarian crisis and a development
crisis.
This unprecedented crisis is pushing millions
of people into extreme poverty, changing
and widening existing inequalities, and
disrupting progress towards the Sustainable
Development Goals (SDGs). Therefore, the
SDGs are now more important than ever. The
2030 Agenda remains the only option for a
more prosperous future for people and planet.
The COVID-19 pandemic has also shaken the global trade and development landscape. The
global health emergency turned into a global economic shock with its impacts on growth,
international trade, investments, global production, value chains, employment and eventually
livelihoods of people.
UNDP is responding to a growing volume of requests from countries to help them prepare
for, respond to, and recover from the COVID-19 pandemic with a particular focus on the most
vulnerable. As of now our focus is to help decision-makers look beyond COVID-19 recovery,
towards 2030, making choices and managing complexity and uncertainty in four key areas:
governance, social protection, green economy, and digital disruption.
UNDP’s COVID-19 Resilience and Response Project, which is funded by the Government of Japan
is a part of our rapidly developed integrated response to the COVID-19 health, humanitarian,
and development crisis. Being complementary with the efforts of the Government of Turkey
and other development partners and fully aligned with the country-specific needs, UNDP
aims to tackle the impacts of the pandemic under three priority areas: Health system support;
Inclusive and integrated crisis management and response; Social and economic impact needs
assessment and response.
I am pleased to present these 25 region-based sectoral analysis reports that provide policy
recommendations and action plans for key economic sectors in Turkey that are most
impacted by COVID-19 pandemic. These reports, which were developed within the COVID-19
Resilience and Response Project in cooperation with Ministry of Industry and Technology and
Development Agencies, formulated in the light of recent global context and trends as well
as UNDP’s response to COVID-19 crisis. Through this work, our aim is to support national
capacities for an integrated and inclusive crisis management, ensure business continuity and
prevent supply chain disruptions and speed up the development of the key economic sectors
-automotive, textile, food, machinery, and logistics in different regions of Turkey and to increase
competitiveness on a regional basis.
Our recovery efforts focus on rebuilding more inclusive economies and societies, moving
towards a low-carbon and climate-resilient world where no one is left behind.
We believe that these reports will provide a pathway for economic recovery of sectors and
development of regional competitiveness. In the reports the review of the pandemic crisis
impact is accompanied by a set of policy recommendations targeting both the interventions in
response to the negative effects of the pandemic and the post-COVID-19 social and economic
recovery support measures. Overcoming the challenges faced by the sectors and society and
ensuring better recovery can only be possible with joint efforts of the entire private sector,
authorities, and the society as a whole.
In this regard, we appreciate the cooperation of Ministry of Industry and Technology,
Development Agencies, and all experts for the preparation of these reports. We believe
that these reports will also enable better cooperation in key economic sectors and help to
accelerate the implementation of the Sustainable Development Goals in Turkey.

Louisa Vinton
UNDP Turkey Resident Representative

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 AUTOMOTIVE INDUSTRY ANALYSIS REPORT AND GUIDE
TR41 REGION (Bursa, Eskişehir, Bilecik)

EXECUTIVE SUMMARY
Automotive industry is one of 5 fragile industries defined within the scope of the "Response to the
COVID-19 Crisis and Resilience Project" financed by the Japanese Government and implemented
in cooperation with the United Nations Development Program (UNDP) and the Turkish Ministry of
Industry and Technology. With this report prepared specifically for the TR42 Region, the general
assessment of the automotive industry in the COVID-19 outbreak process is made, and policy
recommendations and action plans are shared in order to accelerate the development of the
industry in the light of global trends and to increase the level of regional competition.
The automotive industry is a key industry that plays an important role in the development of
countries with its capital-intensive structure and the volume of employment it creates. Although
there are countries such as China, USA, Russia, South Korea, Japan, India, Germany, Italy, Spain,
France as the major automotive industry countries on a global scale, the Eastern European
countries (such as Bulgaria, Czech Republic, Poland), Turkey and several Middle East countries
stand out as the rising values of the industry. With the export-oriented structure of the Turkish
automotive industry, production infrastructure with high quality standards, the availability of
qualified personnel and the advantages of feeding both European and Middle East/African markets
in terms of logistics, national and international companies in different segments (passenger cars,
light/heavy commercial vehicles and heavy vehicle) enables the production of vehicles [Ministry
of Development, 2018]. Turkish automotive industry, which includes 13 main industry companies
and more than 1,500 sub-industry companies, is predominantly located in Marmara Region
(Kocaeli, Sakarya and Bursa). The automotive industry, which has an important share in the socio-
economic development of TR42 Region, has developed under the leadership of Bursa province
(main industry companies with foreign capital* or partners and a developed sub-industry network
brought together by the main industry**) and it is observed that Eskişehir has reached a certain
maturity with its main industrial company (Ford Otosan) and the other sub-industry companies.
In the study of analysis which was conducted specifically for the automotive industry in TR42
Region, the results of the survey study and focus group meeting and statistical and categorical data
obtained from secondary sources were used. In this context, strategy and policy recommendations
for the industry are designed and shared with decision-makers.
It was observed that the strong negative impact of the COVID-19 pandemic, which spread in March
2020, on the global automotive supply chain was felt similarly for companies in the region and
caused the following effects:
• Main and sub-industry companies across the region have completed the year 2020,
approximately 13% below their automobile production amounts and 15% below their export
levels due to the failure to meet the demand because of partial production stops, decreases
in demand in export markets and/or raw material supply difficulties.
• The most basic problem observed throughout the industry was experienced in human
resources management mechanisms (supplying spare personnel instead of key personnel
who moved away from the system due to quarantine and/or disease related reasons,
personnel transportation processes, actions to reduce the effect of contamination in
production systems, etc.). However, due to the legal regulation to prevent the termination
of the work contracts of the workers in the Labor Law No. 4857 and the provision of reserve
personnel instead of the key personnel who move away from the system due to quarantine
and/or disease the total number of employees has increased by %10-15 compared to the
production conditions before the pandemic.
• The vast majority of companies across the industry can address the liquidity problems that
arise due to increased operational costs (logistics, human resources, etc.) and turnover
losses (short-time working allowance, breathing loans, loan/tax debt restructuring, etc.)
were observed to be solved with the financial support packages provided by the state.

* Oyak Renault, TOFAŞ, KARSAN, Güleryüz

** For example, Bosch, Valeo, Yazaki, Continental, Borçelik etc.

ix
 While companies in the global automotive industry are dealing with reducing the destructive
effects of COVID-19 pandemic and putting it back into full capacity, in parallel, companies will
emerge to meet the demands of new generation users and in line with some trends anticipated
for the near future of the industry, it is observed that they intensively work for transformation
activities in both technological and organizational areas. It was observed that there are new
global trends such as the electric vehicle transformation that emerged in order to support the
reforms planned by developed countries, especially in the USA and the European Union, in areas
such as environment and climate; development of autonomous driving and connected vehicle
technologies in the fields of human safety, also supported by data science; the development
of advanced material technologies in order to reduce the environmental impacts of the new
generation vehicles that will emerge (fuel savings and indirectly less carbon emission due to
lightened vehicles) and to meet safety expectations. At the same time, it is observed that the
industry has a tendency to simultaneously improve constraints such as environmental impact,
cost and time by supporting production systems with more modern, integrated robotic
technologies (Industry 4.0 applications).
The action plans and policy recommendations shared which were addressed in TR42 Region
in order to transform the expected transformation areas into policy recommendations in light
of global trends were summarized as follows under 5 main strategy titles (Skills and Capacity
Development; R&D; Infrastructure; Legal Regulations and Financial Regulations):
• With the start of TOGG production in Gemlik Region, TR42 Region will have a leading
position in the transformation of electric vehicles and the production of domestic
components that will be needed for new generation vehicles (electric, hybrid).
• Conducting local supplier assessment and development programs in order to accelerate the
process of involving domestic suppliers of the TOGG vehicle and to manage them in a healthy
way.
• Supporting the transformation of digital transformation and design-oriented production
systems with KOSGEB supports and BEBKA Financial Support Programs and mentoring
activities in order to adapt the manufacturing companies in the region to the change
process as a result of the maturation of the electric vehicle market and the termination
of diesel vehicle production in the near future within the scope of compliance with EU
regulations
• Using some of the existing production infrastructures by exporting to conventional vehicle
markets in countries such as Africa and the Middle East, which are predicted to be unable to
complete the transformation of electric vehicles simultaneously with developed countries
in the near future
• bring the product groups with high added value to the region with the development of
composite materials that will play a critical role in the industrial transformation with R&D
studies to be carried out in the Advanced Composite Materials Research and Excellence
Center established in Bursa, in cooperation with the textile-chemistry-automotive industries.
• Bringing the global manufacturer companies operating in the production of high value-
added product groups to the regional ecosystem by making project-based privatizations
in investment incentive programs and through the activities of BOSB Bursa Automotive
Cluster SEIC and the promotional activities of BEBKA Investment Support Office under the
coordination of the Presidency of the Republic of Turkey
• Design and implementation of integrated areas (campuses) with advanced technological
and logistics infrastructure services that will include the automotive industry and supporting
industries (electronics, informatics, etc.), manufacturing companies, educational institutions,
service providers, entrepreneurs and R&D centers serving the industry
• Establishment of auto-port hubs by integrating the ports in Gemlik Region to advanced
combined transportation activities
• Developing and implementing professional development systems and programs for
application-oriented and new generation vehicles, taking into account new technological
requirements in line with the needs of the industry

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 AUTOMOTIVE INDUSTRY ANALYSIS REPORT AND GUIDE
TR41 REGION (Bursa, Eskişehir, Bilecik)

• Developing and spreading the green OIZ concept in order to meet the EU environment,
climate legislative changes and consumer expectations under the leadership of Bursa OIZ
management
• Designing cloud platforms for institutional capacity development and staff competence
development and promoting online applied training programs for industry development
• Identifying and making an inventory of products that can be produced throughout the
region, add value to the industry and import substitutes, and develop the patenting and
branding processes of these products
Based on the results of the survey study and focus group meeting of the main and sub-industry
companies operating under the automotive industry throughout the region, it has been observed
that the current transformation strategies of the majority of them are similar to or overlap with
the United Nations' Sustainable Development Goals. The industry stands out as one of the leading
industries in Turkey, especially with its practices in the fields of environment, climate and energy
management. It has a structure that can establish adaptive and flexible structures and prevent
cost increases in the face of high-impact risks such as the COVID-19 pandemic, thanks to the
efficiency and crisis management mechanisms it has put forward in each part of the value chain.
In addition, in terms of gender equality in the automotive industry in TR42 Region, the region has
point higher than the average of Turkey especially in terms of female employees in total.
This report is expected to guide the transformation process of the automotive industry based on
the global trends in TR42 Region, and to contribute positively to the decision-making processes
to be applied to increase the global competition level of the automotive industry in the region.

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 AUTOMOTIVE INDUSTRY ANALYSIS REPORT AND GUIDE
TR41 REGION (Bursa, Eskişehir, Bilecik)

1. INTRODUCTION
The closure and/or restriction measures taken in our country to slow the spread of the COVID-19
pandemic started to negatively affect industrial production and foreign trade activities as of
mid-March 2020, and it is observed that the negative effects on economic parameters have
worsened by April 2020. In this context, "COVID-19 Crisis Response and Resilience Project",
funded by the Japanese Government and the United Nations Development Program (UNDP)
in cooperation with the Turkish Ministry of Industry and Technology and the Ministry of
Development Agencies, which is key for Turkey's economy and seen to be affected in a fairly
high level of pandemic impact 5 fragile industry private in (Automotive, Textile, Machinery,
Logistics and Food), has been carried out.
Within the scope of the "Fragile Industry Analysis and Guidelines" study, which is one of the
important pillars of the "COVID-19 Crisis Response and Resilience Project", it has been possible to;
• Examine the effects of the COVID-19 pandemic on companies in the relevant industries
(especially SMEs) and conduct current situation analyzes in order to contribute to the
development of more inclusive and sustainable business models of SMEs in the post-
epidemic process;
• Share the short, medium and long term strategy and policy suggestions on industrial/
regional basis in line with global trends.
Within the automotive industry in TR42 Region, there are main industry companies (Oyak Renault,
TOFAŞ, KARSAN, Güleryüz, Ford Otosan) and also an advanced sub-industry network brought
by the main industry companies (for example, Bosch, Valeo, Yazaki, Continental, Borçelik etc.).
Due to the long-term positioning of the automotive industry in the regional ecosystem from the
past, a structure that is largely integrated with supplier companies and related industries (plastic,
rubber, electronics (cable systems), textile, etc.) is displayed. It is a region with very high potential
of a market for new generation power units (engine, gearbox, differential box, etc.) to be used
for conventional vehicles or for components belonging to new generation vehicles (fuel cell,
electronic parts, software, etc.) that will emerge as a result of global trends in terms of investment
opportunities. Having strong, innovative and domestic production opportunities in the supply of
products or product groups (especially textile, electronics, machinery and sheet metal molding
industries) belonging to main and large-scale sub-industry companies is an important advantage
for the region.
The region has recently begun to carry out important studies on material technologies, which are
directly related to the automotive and sub-industry industries. In this context, light but durable
composite materials, developed/to be developed in cooperation with the textile-chemistry-
automotive industries, are expected to stand out as a high value-added product group, especially
in new generation vehicles, and as an important potential production area for the economic
development of the Region. This potential product group will play a critical role in the industry's
transition to technological products with high added value and industrial transformation with the
R&D studies to be carried out by the Advanced Composite Materials Research and Excellence
Center established in Bursa with the support of BEBKA, by establishing close cooperation with
large-scale chemical companies, especially in the TR42 Region (for example, the carbon fiber
production facilities of Dow-Aksa company in Yalova).
Within the scope of the regional assessment report prepared for TR42 Region (Bursa, Eskişehir
and Bilecik provinces) with the researches conducted in the automotive industry;
• The regional focus group meeting, in which high-level officials from key institutions and
organizations of the industry and representatives with technical knowledge participated in
the survey study conducted and in parallel, and a wide perspective on many issues specific
to the industry, was included in the process by being participated by different stakeholders,
especially regional and national clear trends;
• Sharing detailed current situation analysis by examining the SMEs operating under the
automotive industry in the region under the following NACE (v2) codes (Statistical
Classification of Economic Activities);

1
 • 29.1X: Manufacture of Motor Land Vehicles and Engines (Automobile, Light Commercial,
Heavy Vehicle etc.)
• 29.2X: Manufacturing Bodywork (bodywork); Trailer (trailer) or Semi Trailer (semi-
trailer) for Motor Land Vehicles
• 29.3X: Manufacturing of Parts and Accessories for Motor Vehicles (Brake, Exhaust,
Electrical Parts, Seat etc.)
• Determining the direction of developments regarding the products and services of the
future in the process of providing flexibility and proactive management regarding risks
specific to the automotive industry;
• Determining what the customers' expectations and changing consumption habits might
be and what might be the value suggestions that can be put forward by using the existing
capabilities and strengths in the industry;
• By shaping the future strategies of the industry in line with global trends, it was ensured
to prepare road maps in order to strengthen the competitiveness level of the automotive
industry and to establish sustainable and environmentally friendly systems throughout the
industry.

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 AUTOMOTIVE INDUSTRY ANALYSIS REPORT AND GUIDE
TR41 REGION (Bursa, Eskişehir, Bilecik)

2. METHODOLOGY
The work flow chart used in the studies carried out within the scope of the project is shared in Figure 1

Focus
Group
Meeting

Surveys and Cleaning and

Reports of Current Status
Supplying of the Data Transformation
Umbrella Analysis for
Sets Belonging to the of Data
Organization COVID-19
Automotive Industry of
TR42 Region
Preparing the Conducting Preparing the
Sector based Sectoral Gap Strategy and Evaluation and
Data Sheet of TR42
Statistical Analysis Policy Recom- Reporting
Region
Supporting Analyses mendations
Data
(TURKSTAT;
GIB, TIM etc.)
Sectoral Trends
After COVID-19

Figure 1. Work Flow Chart

The preparation process of the content of the regional automotive industry assessment report
prepared within the scope of the project was carried out under three main activities. These are
respectively as follows;

A. Data Collection
All meetings held in data collection processes were held online due to pandemic conditions,
and the opinions and suggestions of selected large-scale companies, which are the current/
potential customers of many SMEs, who experience the whole of the components in the value
chain specifically for SMEs, which are the focus of the study has been taken. Both primary and
secondary research methods were used in the data collection process.
1. Primary Research Methods

i) Survey Study: With the survey study, up-to-date data were obtained for the industry that could
not be collected from secondary sources. It was ensured that the online survey study prepared for
the "Fragile Industry Analysis" was announced to the relevant industry stakeholders by different
institutions and organizations, especially the Development Agencies. Since the announcements
were made through many channels in order to increase the participation of SMEs in the relevant
industries to the survey, the sample selection of the companies to fill out the survey was not
possible during the implementation phase of the survey. However, after the survey was conducted,
in order to minimize the possible deviations, the answers obtained from the questions were filtered
according to a sample and the details are shared in Section 6.1.1.
ii) Working Group Meetings: One of the most important sources of information for the report to
be prepared was evaluated as the industrial working group established by the Ministry of Industry
and Technology. 4 reports to be prepared for the automotive sector (from Level 2 Regions of
Statistical Region Units Classification: TR42; TR42; TR33 and TR71 Regions) were added to the
working group, their studies were examined by the industry expert and they were supported in
the interpretation and evaluation processes for the validity of the analyzes, inferences and policy/
strategy proposals. During the 14-week working period following the preparation of the inception

3
report, the working group meetings were held every two weeks, six times in total, and the main
agenda items were planned as follows:
• Summarizing the activities carried out in the last two weeks and exchanging ideas
• Timing of focus group meetings and definition of participant profile by taking regional
dynamics into consideration
• Making general evaluations of focus group meetings and making general inferences that can
be added to the industry report
• Collecting regional inputs by sharing the developments in the draft form of the report every
two weeks.
• Gathering general evaluations and suggestions about the process
iii) Focus Group Meeting: One of the important qualitative information sources of the primary
research was considered as focus group meetings. The related focus group meeting was used to
obtain a rich perspective on many issues and a wide perspective by making sure that the industry's
key institutions and organizations (Chambers of Commerce and Industry, Organized Industrial
Zones, Industrial roof Organizations, Industry Organizations, Research Institutions, etc.) and the
Senior officials in the private industry have participated in the meeting (detailed participant lists
are given in Annex-1).
The stakeholders of the industry were made participate in the process at the stages of determining
the direction of the developments regarding the products and services of the future in the process
of providing flexibility and proactive management for risks specific to the automotive industry and
what customers' expectations and changing consumption habits might be and what might be the
value suggestions that can be put forward by using the existing capabilities and strengths in the
industry, and then regional approaches, opinions and suggestions were collected on the following
issues. The topics discussed in the meetings are given below under three main headings:
1. Stage: Evaluation of the effects of the COVID-19 outbreak on the industry and additional
measures taken due to the pandemic
• Product Supply Problems as a Result of Supply Chain Breaks
• Additional Measures Taken Due to the COVID-19 Outbreak
• Continuity of Production
• Synchronization of Suppliers
• Employee Safety and Facility Requirements
• Sales/Marketing Operations
• Problems in Financial Processes (export, investment credits)
• Support Programs of Public Institutions and Local Administrations
2. Stage: Evaluating the developments regarding the products/services of the future and
positioning the region against these developments
• China-based procurement centers of Eastern Europe and/or the possibility of shifting to
Turkey
• Possible effects of electric vehicle market share increase in the near future (TOGG
expectations)
• The effects of the localization efforts of imported products on the sub-industry market in
the region (Joint R&D Studies)
3. Stage: Discussion of the strategies to be implemented in order to increase the competitive level
of the region.
• Ensuring flexibility in supply chain management processes and risk management
• Human resource status
• Technology adaptation and development
• Clustering in automotive supply industry
• Foreign trade and market share developments

4
 AUTOMOTIVE INDUSTRY ANALYSIS REPORT AND GUIDE
TR41 REGION (Bursa, Eskişehir, Bilecik)

The findings obtained from the focus group meeting held in the TR42 Region are shared in detail
in Section 6.1.2.
2. Secondary Research Data

i) Institutional Data Sources: Some of the data sets to be used in the content of the study were
compiled from the databases of alternative institutions such as WorldBank, OECD, UNDP, UNCTAD,
WTO, WEF, TURKSTAT, TOBB, TCMB, TR Ministry of Commerce, OSD, ODD.
ii) Reports Prepared by the Ministry of Industry and Technology and Development Agencies:
Many reports prepared by the Ministry of Industry and Technology and BEBKA on the development
of the automotive industry and examining the effects of COVID-19 have been examined and used
as a reference document.
iii) Other Researches, Publications, Reports: Reports and studies prepared periodically by
professional organizations and umbrella organizations (for example TAYSAD, OSD, ODD, OSS etc.)
for the automotive industry were examined and used. Likewise, Boston Group Consultancy (BCG);
KPMG; Industrial reports prepared by international consultancy firms such as Deloitte were also
used.

B. Data Analysis and Interpretation

In the reports, the current situation analysis of the automotive industry operating in the TR42
Region was carried out using the following analysis methods based on the "Toolkit and Application
Guide for Spatial Value Chain Analysis"* [KAGM, 2020] prepared by the General Directorate of
Development Agencies:
• Simplified Value Chain Analysis
• SWOT Analysis
• PESTLE Analysis
• Michael Porter's Five Forces Analysis
• Gap Analysis
Using the primary and secondary data sources included in the data collection section, short,
medium and long term strategy/action and policy recommendations were prepared in order to
reduce and manage the risks and threats arising in the current situation analysis and to support and
develop opportunities and positive practices. While some of the proposals prepared are macro-
level issues that fall under the jurisdiction/responsibility of different institutions and organizations,
some of them are aimed at the regional level and contribute to the work of the Development
Agency and other regional institutions.
In addition, the horizontal issues (resource efficiency, climate change, gender equality and crisis
management) that cut the automotive industry were examined in detail and shared in the report
in the light of the Sustainable Development Goals declared by the UN in 2015 and aimed to be
achieved by 2030 on a global scale.

C. Evaluation and Reporting

The automotive industry analysis, which was prepared by taking into account the regional dynamics,
after examining the effects of the COVID-19 pandemic on the industry (crisis management) and
other horizontal issues, was shared with the project stakeholders and concluded with reporting
processes.

* https://www.kalkinmakutuphanesi.gov.tr/assets/upload/dosyalar/rev-mekansal-deger-zinciri-analizi-1708.pdf

5
3. Automotive Industry Profile
3.1. General Outlook of the Automotive Industry in the World
The automotive industry is a key industry that plays an important role in the development of
countries with its capital-intensive structure and the volume of employment it creates. The industry,
whose total size in the global economy was approximately 4.5 trillion USD in 2019, accounts for
approximately 5% of the world economy [Statista, 2020], creating employment for approximately
80 million people (for example, the EU-27 Region total it accounts for 6.1% of its employment [EC,
2020]). According to the report prepared by the OECD for the automotive industry [Lejarraga
et al., 2016], the production amounts in the first 20 countries correspond to 90% of the total
production in the world and the industry is regionalized automotive hubs in different continents
according to production volumes. As shown in Figure 2, it is observed that the developed EU
countries are at the center of the world market and have become the balancing point of the world
trade network. Given the industry's major export countries (eg, Germany, France, USA, etc.), is
is seen that many of the potential export capacity operate in the 75-80% level, and the ratio
decreases to 35-40% level in Eastern European countries such as Turkey, Poland, Czech Republic
[Trademap, 2021].

GBR
CAN 79,3% RUS
Germany
78.3% 72.5% POL
NLD
CZE
BEL FRA AUT
USA 71,2%
TUR
China
74.2% ESP ITA 44,5%
JPN

SAU ARE

MEX

Figure 2. Regional Distribution based on Global Automotive Industry Export Capacities [Trademap, 2021]

6
 AUTOMOTIVE INDUSTRY ANALYSIS REPORT AND GUIDE
TR41 REGION (Bursa, Eskişehir, Bilecik)

According to the data of the end of November 2020, the world total vehicle sales volume with
62.6 million vehicles shows a decrease of 14% compared to the same period of 2019 (January-
November) [OICA, 2020a].

100 1.31 1.14 1,23

1.55 1.18

80
43.41 46.86 48.55 47.65 44.00
MILLION PIECES

60

40
25,69 25.55 25.45 25.29 25.31

20
19.04 20.13 20.76 20.81 20.87
0
2015 2016 2017 2018 2019
Europe (EU-28) America Asia / Middle East Africa

Figure 3. World Vehicle Sales Volumes [OICA, 2020a]

In addition, according to the data of the end of the third quarter of 2020, more than half of the
global vehicle production (56.3% - approximately 29.3 million units) was realized in the Asia-
Oceania Region. This region is followed by the European Union (EU-27) with 17.6% and NAFTA
Regions with 18.1%. While developed countries such as Germany, Italy, Spain and France stand out
from the European market, the major markets such as China, USA, Russia, South Korea, Japan and
India stand out in the world [OICA, 2020b].

140,0
120,0
100,0
MİLYON ADET

80,0
60,0
40,0
20,0
0,0
Toplam Toplam Binek Binek Hafif Hafif Kamyon Kamyon Otobüs Otobüs
Araç Araç Ticari Ticari
Araç Araç

2019 2020 2019 2020 2019 2020 2019 2020 2019 2020
Avrupa 32,8 22,9 28,4 19,7 3,9 2,8 0,4 0,3 0,1 0,1
Asya 71,2 55,5 58,3 44,3 7,7 6,1 4,9 4,9 0,4 0,2
Amerika 31,1 21,6 10,9 7,0 19,0 13,9 1,1 0,7 0,0 0,0
Afrika 1,6 1,0 1,2 0,7 0,4 0,3 0,0 0,0 0,0 0,0

Figure 4. World Vehicle Production Volumes [OICA, 2020b]

7
However, by the beginning of 2021, the global automotive industry is under pressure due to
weakening economic balances, commercial quota implementations, legal restrictions, logistical
difficulties in supply/delivery processes and second/third wave concerns of the COVID-19 outbreak.
The COVID-19 outbreak continues to pose a threat to the automotive industry, given the falling
capacity utilization rates and increasing fixed costs, with the contraction in both demand and
production. Due to this impact, there was a 25% contraction in global automotive production in
2020 and a loss of approximately 5.7 billion US dollars in global trade (2.5 billion US dollars for
the EU-27 region only) [ATB, 2020]. While there are pioneering signs that automobile demand
is starting to recover in China, it is observed that production and sales are returning to target
production levels in the second half of 2020. Assuming a similar but delayed recovery process
in Europe and the USA, it is observed that the improvement in sales and production volumes is
unlikely to occur before the second quarter of 2021.
The amount of investment made by automobile main and sub-industry manufacturers in the
European Union (EU-27 Region) in R&D activities increased by 6.1%, reaching an all-time high level
of € 60.9 billion for 2020 [ACEA, 2020].
Company mergers and large-scale acquisitions have started to be seen between the main and
sub-industry companies of the industry, especially in order to create an economy of scale and to
manage the high costs arising in the digital transformation process of the industry and to meet
high customer expectations. For example;
• Merger of Italian Fiat Chrysler Automobiles and French Peugeot-Citroen brands in 2020
• Incorporation of Sweden-based Volvo company into Geely brand of Chinese origin in 2020
• Developments such as the German-origin BMW Group and Daimler companies signing a
partnership agreement for new generation vehicles in 2018 can be considered among the
important collaborations in the global automotive industry.
As a result, the global automotive industry experienced the impact of the COVID-19 pandemic
significantly in 2020, and thanks to the adaptive and flexible supply chain models it developed
as a result of its past experiences, it has managed to overcome the effects of the crisis in the
shortest time possible with minimum damage. However, it continues to make necessary financial
and operational investments for the preliminary preparations against the 2nd and 3rd waves of
the pandemic conditions and to bring the capacity utilization rates to the levels of the end of 2019
quickly.

3.2 Overview of the Automotive Industry in Turkey

With strong links to the owner that the property and export-oriented production strategy, Turkey's
automotive industry has taken a position as one of the leading industries in Turkey's economy
with a large number of low, medium and industries based on high technology (iron and steel,
textiles, plastics, chemicals, rubber, electronics, informatics, etc.). Due to the international nature
of the automotive industry, global dynamics have an increasing importance in the development of
the automotive industry. The automotive industry, which has undergone a very serious structural
change in the last 20 years, has become a industry that gives foreign trade surplus with its high
volume export activities to developed countries. It has also expanded its sustainable production
competitiveness in the field of R&D and reached the ability to design and commission vehicles
from scratch. In addition, Turkey has an important role in terms of export-oriented structure of its
automotive industry and its location which allows it to supply both Europe and the Middle East/
Africa and the fact that national and international companies produce vehicles in different segments.
Almost 80% of its production is exported [Ministry of Development, 2018]and the competitive
international relations, regional problems, rapidly accelerating technological transformation and
rapidly changing consumer expectations play an important role in shaping the sustainable future
of the industry, which is at such a key position. In order for the automotive industry to maintain and
develop its current competitive position, to further develop production and exports, it is necessary
to closely monitor and evaluate trends affecting the global automotive industry, and to implement
changing policies and strategies with agile business management mechanisms.

8
 AUTOMOTIVE INDUSTRY ANALYSIS REPORT AND GUIDE
TR41 REGION (Bursa, Eskişehir, Bilecik)

Despite the decrease in the domestic market demand of the automotive industry, the domestic
market demand started to increase again as the society turned to individual vehicles in 2020 due
to the COVID-19 pandemic and as a result of the banks' car loans to advantageous levels in the
first half of the year.
According to the weights in the consumer price index published by TURKSTAT for 2020, 5.9%
of all expenditures made by households are related to automobile expenses (for example, the
purchase of transportation vehicles (first and second hand), spare parts and accessories, fuel and
lubricants, maintenance and repairs) [TURKSTAT, 2020a].
Passenger cars, buses, trucks, pickup trucks, vans and tractors are produced by 13 major industrial
companies in Turkey. Automobile and light commercial vehicle total market increased by 61.3% in
2020 compared to the end of 2019 and reached 772,788 units (610.109 passenger cars + 162.679
light commercial vehicles) [ODD, 2020]. As shown in Figure 5, total vehicle production by the end
of 2020 was approximately 1.3 million units, approximately 11.2% below the end of 2019 data.

1,8
1,6
1,4
1,2
MILLION PIECES

1
0,8
0,6
0,4
0,2
0

2016 2017 2018 2019 2020

Midibus 3330 3732 3316 2526 2043
Minibus 44415 55036 56934 61629 51464
Bus 8083 8166 8541 9199 7896
Van 461837 462389 429361 386245 358182
Truck 17374 23502 25537 19003 23226
Bus 950888 1142906 1026571 982642 855043

Figure 5. Turkey Vehicle Production Numbers [OSD, 2020]

The automotive sub-industry, which has more than 1,500 companies, is densely located in Marmara
Region (Bursa, Kocaeli and Sakarya). It appears that these companies mainly have experience and
expertise on mechanical parts (engine, injection), accumulator, plastic/rubber parts (inner-outer
tire), in-vehicle safety system (airbag, seat belt), seat, fabric, safety glass, sheet metal processing
and mold.
In the automotive industry, where the total export volume in 2020 is USD 22.6 billion, 42.1% of
this figure is made of passenger cars, 6.2% of buses, midibuses and minibuses and 30.4% of sub-
industry products (For example, 3.3% injector group; 0.9% aluminum wheels; 0.8% piston group;
0.6% lighting/signage devices, etc.). Although the share of the European Region in exports is
quite high, especially Germany (13.4%), France (12.6%), England (9.3%), Italy (8.8%), Spain (5.9%)
) realizes more than 50% of the total exports. Among the top 15 exported countries, there are only
Israel (2.8%); Egypt (1.9%); Morocco (1.85%) and Russia (1.8%) from outside Europe [UİB, 2020].
According to the 2020 year-end report of OSD, the total number of employees working in
companies operating in the automotive main industry is over 50.000 by the end of 2020, likewise,
according to the General Directorate of Industry and Productivity, it is stated that more than
190.000 personnel are employed as of the end of 2017. When the employees in activities such as
sales, marketing, maintenance and repair at the end of the industry's value chain are taken into

9
account, an employment number of approximately 400.000-450.000 people is anticipated in the
industry [STB, 2020b].
When the national capacity utilization rates of the automotive industry are examined, the industry,
which had an average value of approximately 80% in 2019, decreased to 43% in April 2020 and
then completed the year at 76% with a rapid recovery trend as of the end of the year [CBRT,
2020]. It is observed that the competitive level of the industry is highly affected due to the low
production efficiency rates and high input costs brought about by the related low capacity ratios.

3.3 Overview of the Automotive Industry in TR42 Region

TR42 Region has an important leverage effect on state with number of employees employed,
diversity and capacity of the manufacturing industry, with the calculated tax base and foreign
trade volume of Turkey's socio-economic development.
The comparisons of the number of institutions operating in different NACE codes * belonging to
the automotive industry and the total number of employees obtained from the TOBB industry
database [TOBB, 2021] belonging to the provinces in TR42 Region are shared in Table 1. It is
observed that the automotive industry throughout the region has developed under the leadership
of Bursa province and Eskişehir has reached a certain maturity with the main industry companies
(Ford Otosan) located in the province and the surrounding sub-industry companies.

Tablo 1. Companies and Employment Numbers According to TR42 Region Sub-NACE Codes based on Provinces
[TOBB, 2021]
NACE Codes 29.1 29.2 29.3
Number of Registered Producer Companies [unit] 11 40 365
Bursa
Total Employment [person] 24.913 2.170 54.526

Number of Registered Producer Companies [unit] 1 19 19

Eskişehir
Total Employment [person] 756 4.174 3.367
Number of Registered Producer Companies [unit] 0 5 4
Bilecik
Total Employment [person] 0 105 425

However, since since March 2020 when the COVID-19 outbreak has begun, it is observed that there
is fairly serious decline in terms of both foreign trade figures related to the automotive industry firms
operating throughout the region as well as in Turkey. The interruption of production by OEMs and
first-tier sub-industry companies throughout the region significantly affected automotive exports.
In industries such as iron and steel, non-ferrous metals, electricity, textile, machinery, which are the
main suppliers of the automotive industry, slowdowns have occurred in transportation activities,
especially in port management. Although the impact of the pandemic is tried to be reduced with
the measures taken, it is observed that the export and sales figures for NACE 29.1 (manufacture of
motor vehicles and engines) activities, where the main industrial companies are located, remained
well below the last quarter figures compared to 2019.

* [29.1 (Manufacture of Motor Vehicles and Engines); 29.2 (Motor Vehicles Body (body); Trailer (trailer) or Semi-Trailer (semi-trailer) Manufacturing); 29.3 (Manufacture of Parts and Accessories
for Motor Vehicles)]

10
 AUTOMOTIVE INDUSTRY ANALYSIS REPORT AND GUIDE
TR41 REGION (Bursa, Eskişehir, Bilecik)

16
14,7
14 13,6
11,9 12,5 12,2
12
10,8
10 9,9
8,2 8,0 8,2
8 7,3
Billion TL

6,1
6 5,0
4,0 3,8 3,6
4
2
0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0

29,1 29,2 29,3 29,1 29,2 29,3

Export Import

2017 2018 2019 2020

Figure 6. TR42 Region Foreign Trade Volumes [TurkStat, 2020c]

As shared in Figure 7, it is observed that the total export amount of TR42 Region closed the
year 2020 with a volume of 22.2 billion TL, decreasing by 15.4% compared to 2019 according to
the foreign trade information obtained from TURKSTAT. There was an increase of approximately
14.2% in the import activities throughout the region. It is observed that this situation continues to
production activities without interrupting the supply of raw materials and intermediate products
in the industry, and the shrinkage in the international market is balanced by the dynamics of the
domestic market as a result of the public's orientation to the use of individual vehicles in the
domestic market and the provision of advantageous vehicle loans. For example, the number of
registered passenger cars in TR42 Region in December 2020 shows an increase of approximately
4.9% compared to the data of December 2019 based on TURKSTAT data [TURKSTAT, 2020b].
In addition, the foreign trade volumes have some relative shortcomings compared to the real life
data since the foreign trade values of the enterprises (especially the sub-industry companies) that
produce in the provinces of the TR42 Region but are registered in other large provinces such as
Istanbul and Ankara in the relevant TURKSTAT data.
Based on the data of Turkish Labor Agency, annual employment rates in TR42 Region decreased
by 37% and unemployment fund applications decreased by approximately 36% compared to the
data of 2019 [IDF, 2020]. In addition, according to the Social Security Institution data, the total
number of actively insured people increased by 6.9% as of October 2020 and the total number
of workplaces increased by 4.1% as of October 2020 [SGK, 2021]. The most important reason for
this situation is thought to be the additional employment numbers created in order to ensure the
continuity of production under pandemic conditions, and the continuation of the dismissal ban
signed by the Ministry of Family, Labor and Social Services.
The summary information of companies that have received investment incentive certificates under
the motor vehicles industry specific to the TR42 Region is shared in Table 2 [STB, 2020c]. In the
region, it is observed that significant investments have been made in the COVID-19 process (in
2020) and a high number of jobs have been created.

11
Tablo 2. Summary Table of Investment Incentive Documents Given in the Field of Motor Vehicles in TR42 Region
2019 2020
Foreign Local Foreign Local Total
Capital Capital Capital Capital
Number of Documents (Pcs.) 9 39 2 72 122

Bursa Fixed Investment (Million TL) 89,02 461,42 29,21 1.207,73 1.787,39

Employment (Person) 143 604 20 1049 1816

Number of Documents (Pcs.) 2 3 2 7

Eskişehir Fixed Investment (Million TL) 13,26 551,38 42,37 607,00
Employment (Person) 20 95 112 227
Number of Documents (Pcs.) 1 1

Bilecik Fixed Investment (Million TL) 41,50 41,50

Employment (Person) 20 20

According to the relevant investment incentive certificates statistics, 10.8% of the incentive
certificates issued in 2019-2020 throughout the region were issued to companies with foreign
capital. Likewise, it is observed that 12 new investments (approximate investment amount of 447.9
million TL) were made in Bursa province; 1 new investment (approximate investment amount 53.8
million TL) in each of Eskişehir and Bilecik provinces especially under pandemic conditions. It is
observed that the remaining documents are predominantly prepared for facility modernization and
expansion investments, and among these, the highest investment made at one time was made for
the purpose of product diversification and expansion of the main industrial company in Eskişehir. 6
out of 130 (4.6%) investment incentive certificates issued in 2019 and 2020 throughout the region
are for the manufacture of motor vehicles; 6 (4.6%) for motor vehicles bodywork manufacturing,
trailer and semi-trailer manufacturing and the remaining 108 (90.8%) for the manufacturing of
motor vehicles and parts and accessories related to engines.

12
 AUTOMOTIVE INDUSTRY ANALYSIS REPORT AND GUIDE
TR41 REGION (Bursa, Eskişehir, Bilecik)

4. Effects of COVID-19 Outbreak on the

Automotive Industry
The negative impact of COVID-19 pandemic had in the global automotive supply chain companies
in Turkey are also felt similarly. In particular, the main raw materials automotive industry/semi-
finished products supplier with operations in Turkey as a result of breakage of starting the supply
chain from China, main and side industries to close the production line between the months of
March-June period of 2020 and/or have had their production capacity having to download to
a minimum. Some preventive actions were activated again for the automotive industry which is
one of the important industries of the industry and exports to Turkey. In many studies and reports
prepared on the subject, the destructive effects of the pandemic were listed and its effects on the
industry were shared. As a result of the synthesis of these studies examined within the scope of
secondary data analysis with the results of the focus group meeting, the short-term positive and
negative effects of the pandemic conditions on the main industrial companies and large/medium-
sized sub-industry companies in the region are presented in Table 3.
Some of the sample applications at the regional level are as follows:
• Ensuring correct fillation in case of need with the data matrix scanning system added to
"TofaşGO" application by placing data matrixes on dining hall tables and services at TOFAŞ.
• Sharing the protective health equipment (visor mask, biological sampling and intubation
cabin) designed and produced by TOFAŞ in the R&D Center in order to support the
availability of medical supplies needed in combating the COVID-19 pandemic with health
institutions in 70 provinces.
• Providing online nutrition and psychological counseling services to employees within the
scope of TOFAŞ's support programs [TOFAŞ, 2020]
• Creating of special areas isolated for the truck drivers coming for domestic and international
loading in the factories within the scope of the measures taken against coronavirus with the
employees of Beyçelik Gestamp company traveling at the seat numbers notified to them
via SMS [BEYCELİK, 2020]

Tablo 3. Short-Term (0-1 Year) Effects of the COVID-19 Outbreak on the Automotive Industry*
Part of the
Positive Effects After COVID-19 Negative Effects After COVID-19
Value Chain
• Potential for the procurement centers to • Slowdown in customs processes due to
move from the Far East countries to Turkey reasons such as diluted overtime practices due
and Eastern European countries which to pandemic conditions, lack of personnel due
offer relatively low input costs to illness, indirectly, significant problems in raw
(Quality standards and industrial material/intermediate product procurement
Supply
knowledge of the local suppliers in the processes of companies
Processes/
TR42 Region, and integration of OEMs and
Logistics
major sub-industry companies into supply
Activities
chains)
• Re-evaluating supplier selection criteria
and emphasizing the financial and
operational stabilization of especially 2nd
and 3rd tier suppliers (Tier 2 & Tier 3)

*- PwC (2020a); BCG (2020a); BCG (2020b); ILO (2020a); Deloitte (2020b); UN (2020); OECD (2020a); OECD (2020b); KPMG (2020); PwC (2020b); PwC (2020c); Deloitte (2020a); EY (2020);
TAYSAD (2020); TOFAS (2020); BEYCELİK (2020)

13
 • In the industry, where the worker safety
and health measures are at a high level,
the mandatory use of new precaution
packages (additional personal protective
equipment such as visors, surgical masks,
etc.) against pandemic conditions, revision
Production
of existing instructions and procedures
Activities
taking into account pandemic conditions,
sterilization activities, periodic fever
measurements, COVID tests, etc.) and
complying with the guidelines of global
institutions such as the World Health
Organization (WHO)
• Making decisions for employees to
use their annual leaves and/or to increase
flexible/remote working practices
• Establishing crisis management teams
for different departments and performing
vulnerability/stress tests for certain period
intervals
Human
Resources
• As of June 2020, there has been
an intense increase in demand due
to the increase in the individual
vehicle preferences instead of public
transportation in the travels of people due
to the risk of transmission of the pandemic,
and the significant reduction in vehicle
loan interest rates by public banks.
Sales/Marketing • Car pooling environments have
Activities decreased considerably and customers'
individual vehicle preferences have
increased.
• The use of online and digital channels in
sales/marketing activities
• The majority of companies benefit from
financial support packages (short-time
Finance working allowance, breathing loans, loan/
tax debt configurations, etc.) provided by
the government
After Sales
Activities
14
• Decrease in production capacities due to
diluted overtime practices due to pandemic
conditions, disease-related personnel
shortages, line closures.
• Loss of productivity as a result of changes
in worker/material layout plans and review of
overtime plans in order to reduce the risk of
contamination of the pandemic in production
areas
• Having production losses due to disruptions
in raw material and intermediate goods inputs
• Suspension and/or cancellation of investment
plans and capacity increase programs
• Reductions in the number of workers due to
the financial shrinkage and decreasing profit
margins due to the shrinkage in the market
volume and/or giving employees compulsory
unpaid leave
• Cost increases and service supply problems,
especially in personnel transportation services,
as a result of the reduction of the number of
people carried per vehicle
• Suspending and/or canceling personnel
training programs, personal development/
manager development programs
• Personnel's anxiety about being sick,
sociological stress, working conditions by
wearing a mask, etc. negative effects of factors
on employee performance
• Dealers postponing the resumption of work
in order to prevent the intensity that will occur
in the sales dealers in order to comply with the
legal requirements of the central institutions/
local administrations in force due to the
pandemic, protecting the health and safety of
the personnel, and continuing their activities
by reducing their working hours today and this
situation negatively affecting the vehicle sales.
• Failure to meet the demand due to decreases
in production capacity and low sales quotas for
local distribution channels of companies with
low profit margins compared to alternative
world markets and/or low stock amounts
• The global financial uncertainty after
COVID-19 prevents people from making large-
scale investments and this has a negative
impact on vehicle sales.
• Experiencing liquidity shortages and
observing financial bottlenecks
• Establishing capital measures to increase the
cash ratio
• Significant reduction in maintenance and
repair activities due to reduced vehicle mobility
as a result of some decisions taken because of
the pandemic (for example, curfews, remote
work, postponement of travel-vacation plans,
etc.)
 AUTOMOTIVE INDUSTRY ANALYSIS REPORT AND GUIDE
TR41 REGION (Bursa, Eskişehir, Bilecik)

Tablo 4. COVID-19 Salgınının Otomotiv Sektörü Üzerine Orta Vadeli (1-3 Yıl) Etkileri*
Part of the
Positive Effects After COVID-19 Negative Effects After COVID-19
Value Chain
• Commissioning risk management systems • Slowdown in customs processes due to
for supply centers and developing advanced reasons such as diluted overtime practices due
forecasting models that can provide to pandemic conditions, lack of personnel due
flexibility on supply chains to illness, indirectly, significant problems in raw
• The procurement centers to move from material/intermediate product procurement
the Far East countries to Turkey and Eastern processes of companies
European countries which offer relatively • Establishing significant cost pressures on
low input costs and integration of the local suppliers and logistics processes due to the
Supply
manufacturer companies to the supply transformation of companies into cost-oriented
Processes/
chains systems in the emerging financial uncertainty
Logistics
environment.
Activities
• Re-evaluating supplier selection criteria and
emphasizing financial and operational stabilization
of especially 2nd and 3rd tier suppliers
• The main industry and large-scale 1st tier
suppliers to request shock protocols with
subcontractors to ensure that they continue
production/shipment for emergency
management when necessary
• Reducing human-dependent operation • Decrease in production capacities due to
rates in production processes by investing in diluted overtime practices due to pandemic
digital and automation technologies conditions, disease-related personnel shortages,
• Pro-active identification and elimination of etc.
production line problems using predictive • Suspension and cancellation of investment
Production
and optimizing maintenance/production plans and capacity increase programs
Activities
solutions • Having production losses due to disruptions in
• Reduction of maintenance, service raw material and intermediate goods inputs
and downtime costs and times with the
automation systems used and advanced
prediction models based on big data
• Establishment of in-house crisis • Reductions in the number of workers due to
management teams in order to be prepared the financial contraction and decreasing profit
for possible risk factors and to ensure the margins due to the shrinkage in market volumes.
Human
durability of supply chains • Reducing the number of personnel due to the
Resources
• Establishing crisis management teams for reduction of human loyalty with new technology
different departments and performing stress investments
tests periodically
• The use of online and digital channels in • Car pooling environments have decreased
sales/marketing activities considerably and customers' individual vehicle
• The emergence of new generation and preferences have increased.
Sales/ creative sales programs (the integration and • Reducing the number of dealers (indirectly
Marketing implementation of Smart Segmentation and in the number of employees) as a result of the
Activities Smart Pricing Algorithms; the use of AR/ active use of new technologies
VR technologies; the active use of online
communication channels in sales activities,
etc.)
• Application of regular liquidity stress tests • Experiencing liquidity shortages and observing
• Ensuring pro-active and dynamic solutions financial bottlenecks
Finance
by integrating new generation financial • Significant decrease in cash conversion rates
solution algorithms into their systems and decline in capital investments
• Spare parts suppliers to produce solutions • Security problems caused by postponed
After Sales
through digital and online platforms and maintenance/repair activities
Activities
increase in e-commerce activities

*- PwC (2020a); BCG (2020a); BCG (2020b); ILO (2020a); Deloitte (2020b); UN (2020); OECD (2020a); OECD (2020b); KPMG (2020); PwC (2020b); PwC (2020c); Deloitte (2020a); EY (2020);
TAYSAD (2020); TOFAS (2020); BEYCELİK (2020)

15
5. Trends Specific to the Automotive Industry
5.1 Special Trends in the Automotive Industry in the World
While the global automotive industry is dealing with reducing the destructive effects of the
COVID-19 pandemic and activating the industry at full capacity again, it is observed that a lot of
time is spent on transformation activities in both technological and organizational areas that will
emerge in parallel to meet the demands of new generation users and in line with some trends
anticipated for the near future of the industry. It is possible to categorize the developments in the
global automotive industry in five main groups:
• Activation of environmentally friendly new generation vehicles (reduction of carbon dioxide
emission and fuel consumption)
• Development of automotive technologies (development of autonomous driving and
connected vehicle technologies)
• Development of in-car information/entertainment and communication systems
• Advanced material technology applications
• Integration of advanced production technologies (smart factories, robotics, 3D applications
etc.)
One of the most important reasons behind these trends can be defined as environmental and
security-oriented expectations changes in the supply side of the industry. As a result of the
transformation of social demand towards the use of renewable energy sources, more sensitive
to the environment, protecting natural resources, automotive manufacturers are forced to offer
innovative, environmentally friendly and more reliable products to meet these expectations. In
addition, additional applications made to create an intense competitive environment and to meet
changing consumer expectations lead companies to take some cost-reducing actions. With the
innovative products they will develop, they plan to stand out in the global competitive environment
and become a leader, as well as to strengthen their brand values by meeting the expectations of
the new generation consumers.
In Figure 8, key activities that may occur in the process of transformation into smart systems
by completing the digital transformation of the automotive industry are shared by taking time
intervals into consideration.

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 AUTOMOTIVE INDUSTRY ANALYSIS REPORT AND GUIDE
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2020 2030 2040 2050

Vehicles with Advanced Material Technology (Lightweight Composite Materials)
Conventional Vehicles (Gasoline Vehicles)
Conventional Vehicles (Diesel Vehicles)
Hybrid Vehicles
Plug-in Hybrid Vehicles
Fuel Cell Vehicles
Electric Vehicles
Autonomous and Connected Vehicles
Risk Management and Development of Flexibility Mechanisms
Next Generation Supply Chain Solutions (Big Data Management and Advanced Forecasting)
Automation, Robotics and Digital Transformation
New Generation Sales Techniques (Online Channels, etc.)
Product Localization Studies
Sectoral Clustering Studies
Sectoral Mergers (Software, Electronics, Automotive, etc.)

Completing Digital Transformation Smart Cities Activation Zero Carbon

Integration of Next Generation Solutions Systems Conversion

Administrative Purposes Environment Oriented Security Oriented Operational Efficiency

Figure 7. . Timeline of Industrial Trends*

The direct impact of these trends on the automotive industry is that more software and electronic
hardware will be used in production processes and digital transformation will be supported.
In such transformation process, it is assumed that companies operating in the software and
electronics industries will be added to the main industry and supplier network we are used to. It is
predicted that this situation will bring along radical changes on the existing value chain (mergers,
new sources of income, etc.). In addition to the existing main and sub-industry companies in the
automotive industry, it is assumed that intermediate forms will enter the system and companies
specialized in different fields such as software/electronics will be included in the value chain and
the share of the companies operating in the software/electronics industries of the automotive
industry in their turnover will increase.
In addition to technological transformations, there are short/medium-term radical transformations
and applications awaiting the automotive industry, as shown in Table 5, whose importance has
increased in the COVID-19 pandemic.

*- Prepared by the author

17
 Tablo 5. Global Trends in the Automotive Industry*
Estimated
Global Trend Explanation Application
Period
20% of vehicles sold worldwide will be in the electric vehicle segment by
E-Mobility/Hybrid- 2025 [ODD, 2018]
1-5 Years
Electric Vehicles Radically supporting this area in the environmental regulations of the states
in order to support green practices in the industry
The Shifting and As result of the Covid-19 pandemic to make the industry clearly experience
Disintegration the procurement based on a single center, and this giving birth to quite
of the Global significant risks to the production activities, moving a part of the supply
Automotive chains of most of the major producers to Turkey, the Middle East and the
1-5 Years
Industry Supply Eastern European countries
Chain Towards (Especially Turkey's advantage to have at this point in terms of logistics and
Central and Eastern supplier network available, competent human resources and knowledge are
Europe considered the most important because as an alternative.)
Development and Using multi-criteria decision support models in risk and flexibility
Integration of New management
Generation Risk Integrating into ERP programs in processes such as inventory management, 1-5 Years
Management and production planning, procurement planning by developing adaptive and
Forecasting Models artificial neural networks-based forecasting models
Fully Autonomous Fully autonomous vehicles to take their place in the market and quickly
1-5 Years
Vehicles gain a significant market share by 2023
Development of vehicle electronics, embedded sensor technologies
Linked Vehicles and communication technologies, which are the basis of technological 5-10 Years
developments
Next Generation
Providing mobility solutions such as automotive vehicle sharing and supply
Supply Chain 5-10 Years
chain logistics with blockchain platforms
Solutions
Sales and Changing the dealership structure and carrying out vehicle sales and
Marketing marketing transactions through online platforms or with augmented reality 1-5 Years
Activities technologies
Creating economies of scale as a result of OEM mergers across the industry
Acquisition and due to financial liquidity problems and high R&D costs.
Merger (M&A) 5-10 Years
Activities Establishment of cooperation initiatives between automotive industry
companies and IT/Electronic companies
With the emergence of digitalization and connected tools, the emergence
of new business areas and the significant change in the value chain
(For example, the emergence of new departments or large-scale technology
companies such as big data management, voice detection and control)
Development of cyber security mechanisms in big data management
New Business
processes, adaptive follow-up of legal regulations for the protection of 5-10 Years
Fields
personal data
Formation of data economy departments as a result of the collection and
processing of big data from connected vehicles and smart transportation
systems, and the sale of the relevant data sets for preventive maintenance
and/or insurance activities.

5.2 Industrial Trends in Turkey

It is observed that the automotive industry in Turkey has been positioned parallel with the global
trends prescribed in Table 5 due to the large number of international companies located in the
main and sub-industry company operating in the automotive industry. Particularly the global
trends are closely monitored, both as stated in the Eleventh Development Plan and because the
current operations of the industry are predominantly based on exports and are directly affected
by changes in global supply chains. Both individual investments with companies as well as
government support programs in Turkey's automotive industry to be among the leading countries
*- UNDRR (2020); G20 (2020); Vaz vd. (2017); MS (2016); EC (2019); PwC (2020c); Deloitte (2020a); EY (2020); TAYSAD (2020)

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 AUTOMOTIVE INDUSTRY ANALYSIS REPORT AND GUIDE
TR41 REGION (Bursa, Eskişehir, Bilecik)

of the world are planned. In this context, the general trends of the automotive industry in Turkey
are summarized in Table 6.

Tablo 6. Turkey Automotive Industry Trends *

Estimated
National Trend Explanation Application
Period
TOGG (Turkey Automobile Enterprise Group) to complete the domestic electric
cars in the design in the IT Valley in Gebze, start of mass production in TR42
Region (Gemlik, Bursa) and electric vehicles to take an important position on
market as of 2023
Supporting this area in the state's environmental regulations and private
consumption tax structures in order to gain importance and support green
practices in the industry.
Supporting the electric vehicle sales of other companies in the industry, and
expanding the electric vehicle fast charging station network throughout the
E-Mobility/
country.
Hybrid-Electric 3-5 Years
Electric vehicle market maturation, and as a result of the termination of the
Vehicles
diesel vehicle production under compliance with EU regulations, especially
OEMs operating in Turkey on all sides significantly to be affected industry and
government to support the production systems in a radical way to allow changes
(It is foreseen that some of the existing production infrastructure will be
exported to regions such as Africa and the Middle East, which are expected to
be unable to complete the transformation of electric vehicles simultaneously
with developed countries in the near future, but investments in new generation
vehicles are also expected to meet the demands of their existing customers in
EU countries.)
As result of the Covid-19 pandemic to make the industry clearly experience the
procurement based on a single center, and this giving birth to quite significant
Shifting of risks to the production activities, moving a part of the supply chains of most
the Global of the major producers to Turkey, the Middle East and the Eastern European
Automotive countries
Industry Supply (Turkey is particularly considered as the most important alternative with its 1-5 Years
Chain Towards advantages in logistics.)
Central and Increase in the promotional and marketing activities of the regional advantages
Eastern Europe carried out by the Investment Incentive Programs and TR Presidential Investment
and Development Agency Investment Support Office in order to attract large-
scale investments and manufacturers in the industry
Supporting these areas by defining the areas (for example input raw materials)
that should be taken into consideration as a priority in efforts to increase
Localization
localization and provide the highest added value.
of Imported 5-10 Years
(For example, R&D activities for new generation sheets, engineering plastics,
Products
composite parts and reinforced aluminum parts that stand out in the field of raw
materials)
Using the multi-criteria decision support models and new generation planning
Development
models/algorithms in 157 R&D Center in Turkey, which are mainly focused on the
and Integration
automotive industry, with the support of University-Industry Cooperations and
of New
the Ministry of Industry and Technology Ministry in Turkey [STB, 2020] in risk
Generation Risk 1-5 Years
and resilience management
Management
Integrating into ERP programs in processes such as inventory management,
and Forecasting
production planning, procurement planning by developing adaptive and artificial
Models
neural networks-based forecasting models
New Generation
Designing and implementing regional programs that support SMEs through
Fully
the development and implementation of new technologies (sensors, batteries,
Autonomous 5-10 Years
powertrains, etc.) and increasing digitalization through TUBITAK, KOSGEB,
and Linked
Development Agencies
Vehicles
Sales and
Changing the dealership structure and carrying out vehicle sales and marketing
Marketing 1-5 Years
transactions through online platforms or with augmented reality technologies
Activities

*- OSD (2019); PROTEMA (2016); SETA (2019); TAYSAD (2020); PwC (2020c); Deloitte (2020a); EY (2020)

19
5.3 Industrial Trends in TR42 Region
The automotive industry, which has an important place in the economic volume of the TR42
Region, includes the main industry and developed sub-industry companies come to the forefront
with their modern, planned and environmentally friendly production in the Organized Industrial
Zones as one of the pioneers in directing Turkey's automotive industry. In line with the internal
dynamics of the industry (for example, cooperation with foreign OEMs, intensive export activities
to developed countries in the USA and EU, high density of medium/large companies that have
completed their institutional transformation, etc.), it is observed that global trends are closely
followed, especially in the region, and roadmaps and development programs are prepared for
these trends through the OEMs. In addition, considering the industrial composition and logistics
infrastructure advantages of the region, it is highly likely that it will become a production base for
new products that will emerge in line with global trends and/or become a potential application
area thanks to cluster collaborations.
When the annual reports of the large-scale sub-industry companies in the region, especially the
main industry companies in the automotive industry, in 2020 were examined, the following results
were obtained regarding the innovative practices and trends in the region:
• Conducting technical evaluation and bidding studies for TOFAŞ to procure an average of
75% of the parts from domestic suppliers during its procurement processes by working
with over 2,500 suppliers from 14 different cities, excluding engine and transmission
product groups, and establishing a bridge between domestic suppliers and Fiat Chrysler,
purchasing the parts to be used in Fiat Chrysler's different factories from Turkish suppliers
in order to create additional export opportunities for the economy.
• Continuation of design and test infrastructure investments in the fields of "vehicle concept,
style, body, interior design, suspension, engine, emission, vibration and acoustic" in TOFAŞ's
R&D Center
• Presenting the designs of the equipment as open source for the use of different
stakeholders by creating an online platform in TOFAŞ where the demands are collected
and the production and shipment functions are monitored.
• Fiat and BiTaksi: realizing the first "Cabinet Taxi" project in order to protect the public
health against the coronavirus outbreak in Turkey
• Realization of sales on the website of "Fiat Online", which offers customers the opportunity
to purchase vehicles in a hygienic, comfortable, reliable, fast and practical way, taking into
account the new consumer needs of TOFAŞ.
• Designing online products and services and making them available to customers (for
example, "Fiat Online", which offers the opportunity to purchase vehicles; spare parts online
disinfectant sales, video call and "My Fiat Companion Contactless Payment”) in order to
meet the new needs and customer expectations arising from the Pandemic in TOFAŞ
• Productivity studies in TOFAŞ company to give priority mainly to digital optimization of
processes and low-cost automation studies in all areas.
• Electrification, vehicle lightening and vehicle energy consumption reduction becoming the
basis of environmental sustainability-oriented studies at TOFAŞ.
• As a fundamental part of the TOFAŞ digital transformation program, while improving
the qualifications of existing databases, continuing investments to improve information
technologies such as remote working, 5G, cloud, cyber security, and data management
infrastructure.
• Expanding the data scientist capacity of TOFAŞ's Data Science Program in 2019 and
supporting it with online training and full-time consultancy activities (for example, Fiat My
Friend Connect application) [TOFAS, 2020]
• •Oyak Renault to cooperate with Google Cloud to accelerate the digitalization of production
facilities and supply chain (machine learning and artificial intelligence applications),
increasing supply chain and production efficiency and production quality, reducing
environmental impact through energy savings

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 AUTOMOTIVE INDUSTRY ANALYSIS REPORT AND GUIDE
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• Development of "Leader - Follower" program for supplier management and development

in Oyak Renault's supply chain management [OYAK, 2020]
• Carrying out R&D activities related to electric minibus, midibus and bus projects, postal
delivery vehicle project (in cooperation with the US Postal Service) and autonomous
midibus project by KARSAN [KARSAN, 2020]
• Starting 2244 Industry Doctorate Programs to improve University-Industry cooperation
between Bursa Uludağ University, Güleryüz Karoseri Otomotiv San. ve Tic. A.Ş.
• Establishment of the Digitalization Committee to coordinate and implement the digital
transformation efforts of Beyçelik Gestamp within the scope of its business plan and
practices [BEYCELİK, 2020]
• BOSCH's focus on its activities in the field of "Artificial Internet of Things", which is a
combination of artificial intelligence and the Internet of Things (IoT), by investing in
important areas of the future such as sustainable mobility, internet of things and artificial
intelligence [BOSCH, 2020]
• Using and developing one of the main strategic focal points of Valeo company, the electric
small city vehicles, electric motorcycles and scooters, the last [m"il] autonomous delivery
droids and the technological platforms we have developed for the automotive industry for
electric bicycles (both for ADAS (advanced driver assistance systems) and low-voltage
electrification (48V))
• Development of the world's most powerful air sterilization system for bus cabs by Valeo
company, which destroys more than 95% of viruses including COVID-19 [Valeo, 2020]
• Opening of the "Electric Vehicle Production" department at the Automotive Industry
Exporters Association Vocational and Technical Anatolian High School for the technical
staff requirement for the domestic automobile TOGG to be produced in Bursa.
Considering the global trends and the 2020 applications of large-scale companies in the region,
Table 7 summarizes the trends in the automotive industry in TR42 Region.

Tablo 7. TR42 Region Automotive Industry Trends*

Estimated
Regional Trend Explanation Applica-
tion Period
TOGG (Turkey Automobile Enterprise Group) to start serial domestic
production of the electric car in Bursa Gemlik and to take an important
position in the market by 2023
While the electric vehicle projects of other main industrial companies in
the region (Oyak Renault, TOFAŞ, KARSAN, Güleryüz, Ford Otosan) are
actively continuing, acceleration of the activities of inclusion in TR42 Region
with help of the preparation of the sub-industry companies in the region
for this transformation process and the production processes of high value-
Transformation added product groups and attraction of companies to the region and/or the
of Sub-Industry transformation of existing companies in the region.
Companies As a result of the maturation of the electric vehicle market and the termination
3-5 Years
for E-Mobility/ of diesel vehicle production within the scope of compliance with EU
Hybrid-Electric regulations, the entire supplier industry, especially OEMs operating in the
Vehicles region, to be significantly affected and production systems to change radically
by benefiting from government incentives/supports
Acceleration of initiative processes to make feasibility studies and to produce
the transformation maps necessary for the establishment of new export
channels to countries such as Africa and the Middle East, which are expected
to be unable to complete the electric vehicle transformation simultaneously
with the developed countries in the near future, and to make investments in
new generation vehicles in order to meet the demands of existing customers
in EU countries

*- OSD (2019); PROTEMA (2016); SETA (2019); TAYSAD (2020); PwC (2020c); Deloitte (2020a); EY (2020)

21
 Developing adaptive and artificial neural network-based forecasting models
in 55 R&D Centers supported under the coordination of University-Industry
Collaborations and the Ministry of Industry and Technology [STB, 2020a] and
using them in processes such as inventory management, production planning,
procurement planning, in risk and flexibility management, and directing the
SMEs to use of ERP programs and the acceleration of the integration of the
relevant advanced systems into their existing structures
Automotive International collaborations, funding mechanisms, etc. concentration of
Supply Industry activities related to the preparation and development of the industry for 1-3 Years
Cluster Studies global trends by using resources
Acceleration of promotion activities of regional advantages through
Investment Incentive Programs, Chambers of Commerce and Industry,
Organized Industrial Zones, BEBKA Investment Support Offices
Due to the investment incentive advantages of Eskişehir and Bilecik provinces
and relatively cheap investment costs, increasing the planning studies to
create a production base for the automotive industry by attracting new
investors from neighboring provinces, especially Kocaeli and Sakarya.
Acceleration of feasibility studies for the development of railway + marine
Combined
systems, which provide a more environmentally friendly and less costly
Transport
transportation alternative, to be used in both import and export channels by 3-5 Years
Infrastructure
analyzing the lines used extensively by the automotive industry, especially the
Studies
ports in Bursa Gemlik Region.
Providing support mechanisms for R&D and production activities by
determining the areas that should be considered as a priority in efforts to
Localization
increase localization and will have the highest added value.
of Imported 5-10 Years
Continuing feasibility studies to bring high value-added products to the
Products
regional economy by encouraging the localization of metal or plastic fasteners
imported from the Far East.
Designing, implementing and implementing regional programs that support
SMEs through TUBITAK, KOSGEB, BEBKA Financial Support Programs for the
R&D Activities development and implementation of new technologies (sensors, batteries,
for New transmission organs, etc.)
3-10 Years
Generation Concentrating R&D activities, collaborations and funding mechanisms on
Vehicles the mentioned issues by using public-university-industry collaborations and
foreign funded funding mechanisms to support the development of new
generation composite materials and sheet metal products.
Increasing the number of programs designed according to the technological
and hardware needs of the industry that will arise in line with the global trends
at the vocational high school, and associate, undergraduate and graduate
levels of universities in TR42 Region and the development of practice-oriented
professional development systems and programs
Human Focusing on the efforts to increase the number of students enrolled in the
Resources programs by improving the technical infrastructure of the programs currently
Competence continuing their education. 1-3 Years
and Capacity More effective use of BEBKA support programs by determining joint training
Development and consultancy needs by private or public institutions operating in the
automotive industry or related fields that will support the industry (for
example, Basic and Advanced CAD/CAM Trainings for Mold and Machine
Manufacturing, Process Management Training in Automotive, Cable Assembly
Worker Training, Measurement Systems Analysis, CNC Lathe Operator Training
etc.)
Actively cooperating with the industrial umbrella organizations in the region
and helping companies with foreign trade consultancy or market researches
with foreign trade centers that can be established in the umbrella institutions
and organizations, especially the development of the export capacities of the
Foreign Market
companies in the industry and the maturation of new/alternative markets 1-3 Years
Development
Increasing studies and consultancy for obtaining certificates for use in export
activities of industry companies (especially SMEs) that produce throughout
the region but do not engage in foreign trade activities and to improve their
quality processes

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 AUTOMOTIVE INDUSTRY ANALYSIS REPORT AND GUIDE
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6. The Current State of the Automotive

Industry
6.1. Primary Research Results
6.1.1 Survey Studyı

Within the scope of the survey study, the distribution of the surveys obtained specifically for the
TR42 Region according to their industrial sub-breakdown is given in Table 8. The data entries
within the scope of the survey are planned to be open to participation from all over Turkey. Since
the number of questionnaires obtained from the TR42 Region under research is insufficient for
analyzing the industrial sub-breakdowns separately on the provincial basis, the survey analyzes
were handled in a holistic manner for the TR42 Region and interpretations were made.

Tablo 8. Distribution of TR42 Region Surveys Based on NACE Code

Percentage
Sub-Industrial Breakdown TR42 Region Turkey
Rate
Manufacture of Motor Land Vehicles and Engines (Automobile,
Light Commercial, Heavy Vehicle etc.) 1 12 %8,3
(NACE 29.1)
Motor Land Vehicles Bodywork (bodywork); Trailer (trailer) or Semi
Trailer (semi-trailer) Manufacturing 2 13 %15,4
(NACE 29.2)
Manufacture of Parts and Accessories for Motor Vehicles
16 68 %23,5
(NACE 29.3)
Total 19 93 %20,4

As shown in Figure 9, when detailed according to the NACE (v2) activity codes of the companies
participating in the survey, approximately 89.5% of them operate in the production of parts and
accessories for motor vehicles. In addition, approximately 95% of the companies participating in
the survey from the region actively continue their export activities, and they are predominantly
(approximately 47.4%) in the medium-sized company category (with a turnover of 25-125 million
TL).

10
9
1
8
7 8

6
5
4
1
3
3
2
4
1
1 1
0
Medium Scale Small Scale Micro Scale Large Scale Micro Scale

Exporting Not Exporting

29,1 29.2 29.3

Figure 8. Export Status and Company Structure of the Companies Participating in the Survey

23
Approximately 33% of the companies that filled out the survey increased according to their turnover
in 2019 and 38% compared to the export volumes in 2019. However, at the same time, it was stated
that approximately 33% of them had a decrease in their turnover by up to 50% compared to the
previous year and 28% in export volumes up to 50% compared to the previous year.
When the participating companies are asked to prioritize the problems they experienced during
the COVID-19 outbreak in the range of 1 to 6 (1: high priority, 6: low priority), it is observed that the
main problems of the participating companies are related to the decrease in sales, profitability and
production volumes. Cost increases related to logistics and inventory management take the last
place in this ranking.

Decrease in Prouction 2,4

Decrease in Sales 2,6

Decrease in Profitability 2,7

Problems in Labour Force Supply 3,9

Increase in Stock Costs 4,7

Problems in Logistics 4,8

1,0 2,0 3,0 4,0 5,0 6,0

Figure 9. Problems Encountered During the COVID-19 Outbreak

When the main obstacles and bottlenecks that affect the operational processes of the companies
are investigated, it is observed that the most frequently recurring problem is related to the access
to qualified workforce. This obstacle is followed by ensuring the sustainability of production, raw
material supply and financing problems.

Access to Qualified Labour Force 13

Production 9

Raw Material Supply 8

Access to Financing 8

Situation and Cost of Infrastructure 6

Sales and Marketing 5

Export 4

Suppliers Making High Quality Production 4

Packaging and Logistics 2

Frequent Changes in Regulations 2

0 2 4 6 8 10 12 14

Figure 10. Major Barriers and Bottlenecks Affecting Business the Most

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 AUTOMOTIVE INDUSTRY ANALYSIS REPORT AND GUIDE
TR41 REGION (Bursa, Eskişehir, Bilecik)

During the COVID-19 outbreak, it is observed that the most basic problems experienced in raw
material procurement processes are the delays in logistics systems, especially the excessive
increases in product raw material unit prices and customs clearance problems due to the increasing
demand due to the capacity reduction and/or production halts of the supplier companies.

Increasing Raw Material Prices 19

Prolongation of Raw Material Supply Times 17

Decreasing Prdictability of Raw Material Supply Times 15

Supplying of Raw Material from Alternative Sources 8

Lack of Raw Material with Desired Quality 6

Decreasing Stock Levels 6

0 5 10 15 20

Figure 11. Problems in Raw Material Supply Processes

It has been stated that as a result of the COVID-19 outbreak, approximately 66.7% of the
participating companies had their logistics costs increased, and within this ratio, approximately
19% had an increase in the logistics costs over 25%.
When the recent or future expectations of the companies are investigated, it is predicted that
especially the market share will decrease as a result of the global financial shrinkage and raw
material supply problems will arise. In addition, it is expected to make use of financial support
mechanisms and to reduce costs in order to be competitive in liquidity problems and sales/
marketing channels.

Decreasing Domestic/Foreign Demand 14

Utilizing Financial Support Packaes 12

Saving Planning/Implementation 11

Problems in Raw Material Supply 11

Integration of Risk Management Machanism 11

Loan Repayment Restructuring 8

Team Restructuring 6

Utilizing Remote Working Options Actively 6

Problems in Accessing Logistics Services 5

Tendency toward Alternative Product Sets 2

0 2 4 6 8 10 12 14 16

Figure 12. Short-Term Actions/Expectations of Companies

25
When other risk factors affecting the sustainable growth and competition levels of companies are
questioned, it is predicted that the risks originating from COVID-19 will have a very high impact in
the near future, as shared in Figure 14, but especially the introduction of new generation vehicles
and the technologies they will bring into the system will affect the industry at a moderate level.

Demand Fluctuations Caused by Covid-19

Temporary Factory Shutdowns Caused by Covid-19

Excahnge Rate Fluctuations

Key Labor Loss Caused by Covid-19

Import / Export Customs Quota Practies

Lack of Faunding

Raw Material Interruptions in the Supply Chain

Financial Liquidity Problems

New Big Player Entering the Market

Activation of Online Sales Channels

Spreading of Technologies that can Communicate With Each Other

Big Players Exiting the Market

Active use of Autonomous Vehicle Technologies

Electric Vehicles Taking an Important Position in the Market

0 5 10 15 20
Very High High Medium Low Very Low Not Applicable

Figure 13. Risk Factors Affecting Sustainability

When the factors that will affect the competitive levels of the companies in the industry are
questioned, it is observed that the intense competitive environment in the industry and the low
profit margins it brings with it come to the fore. In this parameter, it is observed that the labor-
based production systems in the industry, especially the pandemic-induced key personnel losses
and technological transformation deficiencies, have a high impact on competitiveness.

Level/Intensity of Competition in the Sector

Additional Security Measures Caused by COVID-19
State Support not Sufficient / Effective
Low Productivity
Difficulty Accessing Finance for New Investments
Dependence on a Limited Number of Buyers
Existence of Equivalent / Substitute Products
Prohibitions, Rules and Regulations
Difficulty of Companies to Access Appropriate Technologies
Lack of Domestic Technical Skills
Dependence on a Limited Number of Suppliers
Anew Company's Entry intı your Market
Expansion of Remote Working Opprtunities
0 5 10 15 20
Very High High Medium Low Very Low Not Applicable

Figure 14. Factors Affecting the Level of Competition

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 AUTOMOTIVE INDUSTRY ANALYSIS REPORT AND GUIDE
TR41 REGION (Bursa, Eskişehir, Bilecik)

When the transformation practices taken by firms in the face of the factors affecting their
competitiveness are questioned, it is observed that the manufacturers tend to mainly increase
efficiency in production systems. However, it is understood that they remain passive especially
against energy management, environmental practices and social responsibility issues, and for the
majority of companies, even if such applications are not applicable or implemented, their potential
effects will have a very low impact on the competitive platform.
High-Tech Efficient Machinery / Equipment Procurement

Productivity Based In-House / Outside Training

Productivity Based Organizational Structure

Lean Manufacturing Techniques

Resource Efficiency

Socislly Responsible Product Manufacturing

Calculating Carbon Footprint

Production of Products with Energy Label

Green Product Manufacturing

0 5 10 15 20
Very High High Medium Low Very Low Not Applicable

Figure 15. Transformation Activities of Companies

When the strategies to be implemented by companies to maintain their sustainability and

competitiveness in the face of global trends and developing new technologies are questioned,
investments for digital transformation such as industry 4.0, modernization of production systems
such as robotic systems and big data management come to the fore. However, it is observed
that investment approaches against special product groups with high added value and requiring
intensive R&D activities are quite low in the future strategies of the companies.

Implementing Industry 4.0 Applications

Increasing Digital Tranformation Activities

Integration of Big Data management Mechanisms

Invenstment in Sencor Technologies

Providing Sectoral Oartners (Merge&Acquisition)

Shifting the Supply Chain from East to West

Investment in Elelctronic Components

Investing in Strong Powertrains

Investing in Battery Techonologies

0 5 10 15 20
Very High High Medium Low Very Low Not Applicable

Figure 16. Future Strategies of the Companies

27
6.1.2 Focus Group Meeting

Within the scope of the focus group meeting held in Bursa, Eskişehir and Bilecik provinces between
06/01/2021 10:15 - 12:30;
A. As a result of the current situation assessment of the industry, the following findings have been
reached;
• Although the sub-industry companies operating throughout the region experienced partial
production losses due to the COVID-19 pandemic, there were no significant sales/turnover
losses since they mainly carried out export activities. It was stated that the production
losses of the Far East and Europe-based competitors during this period were partially
compensated by the companies in the region and this situation was reflected positively on
the sales, albeit relatively, and/or the losses experienced as a result of partial closure were
tolerated by this means.
• Due to the COVID-19 pandemic, it has been observed that all companies have taken labor
and workplace measures at a high level. For example;
• With the new plans made taking into account the social distance rules in the areas such
as production areas, common social areas, transportation services, it has been ensured
that the risk of in-plant contamination is kept at minimum levels.
• It was ensured that the meetings were conducted predominantly through online
channels by providing remote working options to white-collar employees.
• Instead of employees who moved away from the workplace due to the pandemic, alternative
employment was provided when necessary, allowing production to continue without
interruption. (On average, the number of employees increased by 10-15% compared to the
production conditions before the pandemic.) It was stated that the number of additional
employment was supported by the incentive packages (short work allowance etc.) provided
by the state.
• Due to the COVID-19 outbreak, serious supply difficulties were experienced especially due
to the capacity reductions of Far Eastern raw material/intermediate product suppliers and
the decisions to stop production. Due to the deterioration in the supply-demand balance,
the raw material input costs have increased significantly and in this case, it significantly
affects the financial sustainability of the companies.
• It has been observed that the sub-industry companies, especially large-scale companies,
prevent productivity losses due to demand and worker losses by conducting line balancing
and cost analysis studies, especially in their production systems, and also increase their
safety stock quantities specific to raw materials and intermediate products by revising their
stock management systems.
• It was observed that medium/large-scale companies that invested in automation/
digitalization areas prior to the COVID-19 pandemic and were able to implement flexible
production strategies and make rapid supply chain revisions during the pandemic process
were minimally affected by the process.
• It was observed that they had significant problems regarding the sustainability of production
as a result of labor-intensive production companies, especially in the production systems,
key personnel losses, long quarantine periods, etc.
• It has been observed that the logistics costs and lead times of the industry companies in the
region have increased significantly due to the difficulties in logistics processes (excessive
waiting times in ports, road customs, container/trailer supply problems, etc.) and therefore
operational costs have increased.
• It was observed that the turnover/customer losses remained at a minimum level due to
the long-term sales contracts of medium/large-scale companies with OEMs or 1st tier sub-
industry companies and the slow and difficult supplier transitions throughout the industry.
• It was observed that especially 2nd and 3rd tier suppliers had difficulties in finding new
customers and developing market share due to the fact that the individual methods

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 AUTOMOTIVE INDUSTRY ANALYSIS REPORT AND GUIDE
TR41 REGION (Bursa, Eskişehir, Bilecik)

(physical customer visits, business dinners, etc.) they used in sales and marketing channels
before the pandemic could not be used under online working conditions.
• It has been observed that companies operating within the OIZs have reviewed their
investment options and some investments have been postponed during this period.
However, it has been observed that some companies are working on the transformation
from worker-intensive systems to automation systems.
• It has been observed that firms mainly benefit from financial support programs provided
by the state (breathing loan, partial working allowance, loan structuring, etc.) and that firms
tolerate liquidity deficiencies by their own means, and this situation increases the financing
costs of companies.
B. The following findings have been reached by analyzing the positioning of the industry
against global trends and current actions;
• It is foreseen that the representatives have low expectations for the supply centers in the
Far Eastern countries to move to the Eastern Europe and/or to Turkey, as a major candidate,
and that the Far East based manufacturing operations and procurement of raw materials,
especially where recovery quickly with trade support of the Chinese Government, have
increased and will continue to increase. Alternatively, it was mentioned that some the Far
East/Europe originating companies intend to acquire some of the key companies in Turkey
market and/or to create partnerships.
• It has been mentioned that electric vehicle options will take an important share in the
market in the near future and that some R&D activities are carried out throughout the
industry in order not to fall behind the competitors in this market, and the necessary studies
are carried out in parallel with the sub-industry companies to be prepared for the demands
from the main industry.
• It was emphasized that a know-how should be created for the electric vehicle segment
at the regional level. In addition, it is anticipated that the development of sub-industry
companies in the face of significant effects (for example, on engine, exhaust, plastic parts,
etc.) on the existing conventional vehicle value chain as a result of the electrification
transformation, and their preparation for the transformation process will play an important
role in the successful management of the process.
• It has been mentioned that the companies are highly participatory in the nationalization
of imported products and some industry companies have some practices representing
the region in this regard. However, it has been observed that companies throughout the
region expect the main industry to guide the development of high value-added products
or localization of imported products and do not take a pro-active approach to projects that
will lead the industry.
• It is foreseen that it will be supported by capacity building and corporate transformation
programs for global trends (digital transformation, automation, electrification, informatics,
etc.) through the industrial cluster located throughout the region and leading research
centers based in Istanbul.
• In particular, they foresee that the "Carbon-Neutral" policies of the European Union will
be implemented earlier than the envisaged dates. It was emphasized that the value chain
of the industry should be changed radically and environmentally sensitive technology-
oriented studies should be started immediately within the scope of this transformation
process. In this regard, it has been stated that studies have started to establish an "Artificial
Intelligence Center" in Bursa.
• It has been observed that the export activities of the companies towards developed
markets such as Europe and America will continue, but especially the development speed
of the electric vehicle market is thought to be relatively slow, alternative export strategies
have started to be developed for the markets of Africa, South America and the Middle East.
• Companies and umbrella organizations develop new concepts (e.g. Green OIZ) for global
changes (e.g. EU environment, climate legislative changes, Paris agreement, etc.) and bring
innovative products to the region by collaborating with research institutions/R&D centers
on such horizontal issues is planned.

29
 C. Finally, the following findings were obtained by analyzing the basic deficiencies and
development channels observed in order to improve the competitive level of the automotive
industry in the region;
• It has been observed that the most basic need emerging throughout the region is the lack
of blue-collar personnel and qualification deficiencies (language skills, lack of industrial
experience, etc.). However, it has been observed that companies are negatively affected
in terms of sustainable production and personnel development programs due to the high
level of blue-collar mobility (between industries and/or between companies) in the region.
In addition, it has been stated that there are no difficulties in the processes of attracting/
keeping the talented workforce to the region for the white-collar personnel.
• As a result of the need for additional workforce emerging during the pandemic and the
limitations of layoffs applied in parallel, the sector-wide deficiencies were experienced in
the number of personnel; however, it is foreseen that there will be negative changes in the
number of employees regionally when the related limitation and support mechanisms end
in consideration of the increasing employee costs and the estimated sales figures for the
future years.
• It is anticipated that the credit supports provided by Eximbank to exporting companies
could not be applied to the sales channels of the same firm belonging to group companies
residing abroad and VAT refund receivables were significantly reserved within the scope
of loan transactions and as a result of this situation, the financial sustainability of the
companies was negatively affected.
• In consideration of the competing markets that produce for the industry (Eastern European
countries, Far Eastern countries), it was emphasized that both the high energy input
costs and the extreme fluctuations in macroeconomic parameters significantly affect the
competitive level of the industry and the need to develop support mechanisms in these
areas.
• It is foreseen that the export target of US$ 30 billion for the year 2021 specific to the
industry cannot be achieved, especially due to the increase in input costs (raw material,
energy, labor, etc.) and supply chain breaks (raw material supply problems, transportation
system capacity problems, etc.).
• It has been observed that there are effective, sustainable and product-oriented collaborations
between public institutions-private industry-university. However, it was stated that the
important umbrella organizations of the industry such as OSD/TAYSAD should be more
active and participatory in increasing the industrial added value, encouraging R&D activities
and creating an image in foreign markets.
• It is observed that products with low added value (USD/kg) and large volumes are met
by the sub-industry throughout the region. It was emphasized that it is very important to
create an industrial awareness in the light of global trends and to shape corporate cultures
in a way to offer solutions (data analysis, digital systems, etc.) for new generation products.
• It is predicted that the region can become a global production center with R&D studies to
be carried out with external funds by considering that sub-industry companies are mature
enough to meet the quality expectations of OEMs and that an industrial knowledge has
been formed.
• It was emphasized that it is important to support logistics infrastructure systems and
combined transportation activities in order to increase the competitiveness of the
manufacturers in the region. For example, the producers in the region have to use the
land transportation for bringing the products they have brought into Turkey via rail or
marina transportation, however, production and transportation costs in import and export
activities and their times could be reduced significantly with the applications of special line
carried out on the railways in Turkey.

6.2 Industrial Analysis

It is positioned as one of the potential production bases of Eurasia considering the factors such
as that the automotive industry value chain of TR42 Region is the main industry and sub-industry

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 AUTOMOTIVE INDUSTRY ANALYSIS REPORT AND GUIDE
TR41 REGION (Bursa, Eskişehir, Bilecik)

companies that have developed especially in passenger and light commercial vehicle production
and assembly activities; logistics infrastructure advantages of the region, cooperation with other
industrial areas of the industry; and qualified workforce. The opportunities of the automotive
industry in the TR42 Region against this vision and the threats to its development were examined
in detail, and detailed analyzes were made to prepare the basis for the definition of medium/long
term strategic goals that can be set for the region to become the leading automotive production
base in the world.
6.2.1 Value Chain Analysis for the Automotive Industry in TR42 Region

Sub Tier Suppliers Main Prıoducers Dealers

Parts Raw Material

Design Supply
Intermediate After
Production Product Assembly marketing Sales Recycle
Sales
Technology Technology Supply
Design Supply
Insurance Service
Maintenance&Repair
Finance Services

Logistic Services

R &D Production Marketing Service

Figure 17. General Value Chain Flow of the Automotive Industry*

As shown in Figure 18, the raw materials (plastic, rubber, chemicals, iron, steel, etc.) and intermediate
products that companies will need in their production processes (textile, chemical, rubber, plastic
components, electronics, batteries, brakes, gearboxes, etc.) continue to be procured through local
and/or imported suppliers based on long-term and strong relationships starting with the R&D/
design ** processes made by considering the future projections of the automotive industry value
chain companies. Parts supplied through sub-industry companies and import channels (an average
of 6,000 pieces per vehicle [TSKB, 2018]) are assembled and presented to the end user through
sales channels. Activities such as vehicle maintenance/repair in after sales operations; insurance;
recycling take their place in the process as the last links of the chain. In addition, activities such as
logistics services (supply logistics, operations, shipping logistics, etc.); financial services; human
resources and business management are determined as support providing activities.
The export volumes of the companies in the automotive industry in TR42 Region to the developed
markets are among the globally competitive regions in the fields of automobile and light commercial
vehicle production with mature production infrastructures and trained human resources that will
meet the quality and operational expectations of international large-scale main and sub-industry
companies. However, it operates in high volume but low value-added product groups due to
the capacity utilization rates of the industry, existing technology and R&D infrastructures, and
the lack of digitalization and data management mechanisms on the supply chains. Due to the
technology-based production structure and high input costs, industry companies that continue
their activities at a very critical threshold in terms of profitability face the risk of losing their current
competitiveness, especially due to foreign dependency on raw materials and fluctuations on input
costs.

*- Prepared by the author

** As of 2020, 55 of 157 R&D centers, which were created specially for the automotive industry in Turkey, were located in TR42 region [STB, 2020].

31
6.2.2 TR42 Region Automotive Industry PESTLE Analysis

It has been used as an important input source in identifying opportunities and threats for short,
medium and long term strategies to be created specifically for the automotive industry by evaluating
the impact of macro developments occurring on political, economic, sociocultural, technological,
legal and environmental scales on the automotive industry in TR42 Region. As a result of the
focus group meeting, the survey study and the secondary data analysis processes, the shared
outputs in Table 9 were obtained. It is observed that the main and sub-industry manufacturer
composition with the TR42 region has a very similar structure to the automotive industry in the
TR42 Region in consideration of macro indicators such as the position of supporting industries,
logistics advantages, foreign trade volume.
It is observed that the main threats to the automotive industry in TR42 Region will emerge especially
at the political and economic level. It is foreseen that the environmental, climate, security-related
regulation changes that occur in EU countries where the majority of the industry companies in the
regional ecosystem carry out their export activities, and the adaptation problems and additional costs
that will occur in the adaptation process to the industry will significantly affect the competitive level of
the industry. In addition, it is known that uncertainties in macroeconomic parameters have significant
effects on the national market volume of the industry, and it is predicted that the industry's domestic
market activities will be significantly affected if there is no stagnation on the relevant parameters.
However, considering the constraints such as the current industrial infrastructure, the number of
qualified personnel, and the quality approach, especially in the transformation process that will occur
as a result of global trends, it is observed that there are important opportunities in the processes of
technological transformation and bringing value-added products to the regional economy. Thanks to
the geographical advantages of the region in terms of logistics and supply chain, it is predicted that the
socio-cultural, technological and environmental expectations of the industry can be met quickly and in
a value-added manner with the State's interest in this matter, financial and legal support mechanisms;
high numbers of staff generating innovative ideas that will quickly adapt to the transformation process
of universities and the industry.
Table 9. PESTLE Matrix of TR42 Region

Political Economical Sociocultural

• Regulations on security and
data management
• Emission protocols /
regulations Customs taxation /
quotas
• Special consumption tax rates
• State's supporting the high
value-added production and
nationalization processes
intensively and actively under
different funds.
Technological
• Autonomous vehicle
technologies
• The presence of hybrid /
electric vehicles in the market
• The development of sensor
technologies
• Development of big data
management mechanisms
• Emergence of new research
areas in sound management and
precision
• Application of digital
transformation strategies
• Regulations on security and
data management
• Emission protocols / regulations
Customs taxation / quotas
• Special consumption tax rates
• State's supporting the high
value-added production and
nationalization processes
intensively and actively under
different funds.
Environmental
• Carbon emission rates
(carbon neutral)
• Cessation of diesel vehicle
production
• Using environmentally friendly
fuel technologies
• Green themed certificates
becoming widespread
• Scrap incentive programs
• Increasing the use of recycled
products in vehicle production
• Environmentally conscious generations
using electric vehicles or alternative
means of transportation (scooter, bicycle,
etc.).
• Vehicle use being an indicator of
prestige
• People turning from mass transport
to individual vehicle alternatives after
COVID-19.
• Supporting of safe driving with
developing in-vehicle / outside sensor
technologies and reducing of the injury /
death rates in accidents
Legal
• Protection of Intellectual Property
Rights
• Protection of personal data, driving/
vehicle data
• Lack of certainty in regulations for M&A
or JV activities

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 AUTOMOTIVE INDUSTRY ANALYSIS REPORT AND GUIDE
TR41 REGION (Bursa, Eskişehir, Bilecik)

6.2.3 SWOT Analysis for the Automotive Industry in TR42 Region

With the aim of improving the position of the automotive industry, one of the leading industries
of TR42 Region, increasing the sustainable global competitiveness and transforming it into
a structure with high added value, where the use of advanced technology is predominant, the
industry's stakeholders' surveys and focus group meetings, and its shortcomings are discussed
and summarized in Table 10.

Tablo 10. SWOT Matrix of TR42 Region

STRENGTHS
• Rich logistics infrastructure facilities (Gemlik Ports,
Highway Connection Axes etc.)
• Well-rooted industrial infrastructure and leading
companies in the field (sectoral knowledge and experience
+ intensive foreign trade activities)
• Finding international automotive sub-industry companies
and having a wide range of products
• Wide opportunities for university-industry cooperation +
55 Automotive R&D Centers
• Active performance of the automotive supplier industry
cluster
• Active/integrated working environment with local
governments and umbrella organizations (TAYSAD, etc.)
• Attracting qualified workforce to the region
Fırsatlar
• The strategy of the main industry to direct local supplier
companies that offer low cost-high quality alternatives in
new projects containing high value-added parts produced in
Far Eastern countries.
• Supporting the infrastructure that will respond quickly
and adaptively to the rapid prototyping needs of OEMs and
industrial transformation processes
• Potential cooperation opportunities in the Electronics,
Automotive and Informatics sectors Turkey's potential of
being a global logistics center and new players entering the
market
• Increasing of localization efforts with Parts Equivalent
Certification system, etc. incentives and supporting supply
industries
• Production of TOGG in the Region and the investment and
cooperation network it will create in the future
WEAKNESSES
• SMEs not allocating funds to corporate
transformations such as R&D and Innovation
• Production of low value-added and volumetric
products (kg/$)
• SMEs not providing qualified workforce and
qualified employees’ preferring large-scale
companies in the region
• Lack of partnership and co-business culture in
SMEs
THREATS
• Increased energy, taxes, etc. input costs
• Sudden exchange rate fluctuations
• Policy instabilities (SCT revisions,
environmental regulations for carbon emission,
ADR regulations, EURO 6 engine use, diesel
consumption, etc.)
• Increasing labor costs due to COVID-19
• Financial contraction and liquidity problems
caused by COVID-19

6.2.4 Five Power Analysis for the Automotive Industry in TR42 Region

The “Five Forces Model” proposed by Michael Porter is used for defining the risks and threats that
will occur for new companies entering the industry in the process of determining the severity and
impact of strategic competition in the automotive industry; defining the competitive environment
between existing competitors and the substitutes in the industry; and making general evaluations
about the bargaining power and preferences of buyers and suppliers. In this context;
A. In terms of New Enterprises to the Industry (Weak)

The automotive industry is not a industry with a high profit margin that can be invested quickly due
to intellectual property rights, patent maturity, quality expectations, economies of scale created by
current global companies and high investment capital requirements. However, there are potential
market opportunities for companies that will enter the industry, especially for new product groups
that will emerge for new generation electric/hybrid vehicles. The relevant companies can find

33
place in the value chain of the automotive industry by taking advantage of the incentive programs
provided by the government in the still immature market for innovative and high value-added
product groups (sensors, electronic components, software, etc.).
B. Bargaining Power of Customers (High)

It is observed that the bargaining power of individual and corporate customers, who are at the
end of the value chain of the automotive industry, is quite high. It is observed that, as a result of
presence of many alternative vehicle options in the price-quality index and the high customer
satisfaction expectations, customers' sense of belonging to brands decreases and they tend to
alternative brands where they can get better service with lower cost and higher quality. In addition,
the new generation vehicle segment creates a risk for companies that produce conventional
vehicles due to the increasing safety expectations of end customers and their environmentally
sensitive approach.
C. Bargaining Power of Suppliers (Weak)

It is observed that the bargaining power of the sub-industry companies serving the main industry
of the automotive industry is weak. Although the supplier switching costs of OEMs or 1st tier
large sub-industry companies are high, it is expected to offer high quality with low profit margins
due to the high number of alternative suppliers in the market. In addition, high costs arise due to
the control mechanisms on the supplier companies, high stock expectations, worker training, and
certification expectations. However, it is observed that their bargaining power is at a moderate
level due to the lack of an alternative producer pool for suppliers involved in the production of
key components of new generation vehicles and the advantages provided by intellectual property
rights.
D. Similar Product Threats (Moderate)

It is observed that similar product threat is at a medium level in the final product groups belonging
to the main industry. It is intermediate, as hardware packages that meet customer expectations
are standardized and the advantageous services provided by companies during and after sales.
However, due to the environmental approach of new generation users, alternative product groups
such as electric scooters and bicycles show an increasing trend in individual transportation
activities. Again, the electric vehicle segment seems to be a serious risk factor for conventional
vehicles. Considering the sub-industry, the vehicle change rates are not found to be very high in the
industry due to the length of quality approval processes and increasing cost pressures. Therefore,
the risk of alternative product groups appears to be low/medium. However, it is predicted that
conventional vehicle-oriented product groups such as engines, plastic parts and exhaust will be at
high risk with the activation of the electric vehicle segment.
E. Risks Created by Existing Competitors (High)

There are financial and operational risks created by global companies with high brand values.
In particular, innovative solutions to be brought by companies with high R&D budgets; financial
support they will provide in sales processes; after-sales service network; supplier transfers etc.
may cause significant changes in the current market distribution. Likewise, the adoption of the
domestic TOGG vehicle by the society and the relative support of the special consumption taxes
on vehicles with new generation fuel technologies compared to the vehicles using petroleum-
derived fuel (applying relatively low special consumption tax rates) may create tax, cost and market
advantages in the coming years. This situation poses a high risk for companies that mainly operate
in conventional vehicle production in the region. Also, TR42 Region has a similar composition
industrial scale of Turkey as a potential competitor on the market come to the fore. The companies
in the IT Valley located in TR42 Region create a potential market by taking an active role in the
design and informatics activities of the industry.

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 AUTOMOTIVE INDUSTRY ANALYSIS REPORT AND GUIDE
TR41 REGION (Bursa, Eskişehir, Bilecik)

(-) Low Cost, High Quality Expectation

(-) Existence of High Competition Conditions with Alternative Product Providers
(-) Expectations for Fast Response Times
(-) Low-Rate, High-Term Financing Expectations
(-) High Private Consumption Taxation System of the Government
(-) High Exchange Rates
(+) High Demand for New Generation Green and Safe Vehicles (+) Increase in the
Number of Individual Vehicle Use as a result of the COVID-19 Outbreak
(+) Use of New Generation Sales / Marketing Methods

Automotive Producers (Main and Supply Industry)

Automotive Dealers
Auto Service and Spare Parts Operations
Insurance Companies
Logistics Companies
Finance Institutions

Bargaining Power of Buyers

New Companies Entering the Sector Substitute Products and Services

(-) High Investment Capital / Know-how requirements
(-) Existence of High Brand Value Players
(-) High Quality / Finance / Design Reference Expectations
(-) High Supplier Switching Costs
(-) High Product Diversity
(-) Lack of Economies of Scale in Purchasing / Sales
Processes
(+) Government's Investment Incentive Programs
(+) Industry's being open to Innovative Products
(+) The Sector's tendency for Radical Transformation
(Development of Electric, Autonomous, Connected New
Generation Vehicles, New Product Groups / Systems)
Competitors
(-) Existence of a Large Number of Players with
High Brand Value
(-) Government Support for TOGG automobile
(-) Low Price, High Quality Expectations
(+) Availability of Innovative Solutions for New
Generation Vehicles
(+) Integration of New Generation Production
Systems
(+) High Investment Capital / Know-how requirements
(-) Existence of High Brand Value Players
(+) High Quality / Finance / Design Reference
Expectations
(+) High Supplier Switching Costs
(+) Immature Market / Small Number of Suppliers for
New Generation Vehicles
(-) Cost-Oriented Purchasing Processes
(-) Increase in Vehicle Sharing Tendency
(-) Alternative Transportation Opportunities Brought
Together by the Environmental Approach (Electric
Scooters, Motorcycles, Bicycle etc.)

Bargaining Power of Suppliers

Individual Customers
Public / Private Enterprises

(-) Low Profit Margins

(-) High Quality / Finance / Design Reference Expectations
(-) Expectations for Fast Cycle Times
(-) High Stock Expectations.
(-) Existence of a Large Number of Small / Medium Sized Firms
(-) High Number of Alternative Suppliers in Conventional Vehicles
(+) Low Number of Alternatives in High Value Added Products of New
Generation Vehicles
(+) High Profit Margins in Key Product Groups in New Generation Vehicles

Figure 18. Porter 5G Relation Matrix

35
6.3 Gap Analysis for the Automotive Industry in TR42 Region
Based on the data obtained as a result of the survey study and focus group meeting conducted
specifically for the TR42 Region, the operational and technological deficiencies/risks that arise at
different stages of the value chain of the automotive industry are shared in Table 11, and it is aimed
to form the basis for the strategies to be developed specific to the region.

Tablo 11. Gap Analysis of TR42 Region

Foreign Trade and Sales
• Small/medium-sized sub-industry companies remain ineffective and passive in developing
foreign trade activities
• Failure to carry out foreign market analyzes against product groups that do not have high
volumetric burden but high added value (USD/kg) and to create alternative markets (South
America, Africa, Middle East, etc.)
• Inadequacy of the infrastructure and combined transport operations in order to increase
manufacturers' competitiveness levels in the area of logistics (for example, the producers in
the region have to use the land transportation for bringing the products they have brought
into Turkey via rail or marina transportation, however, production and transportation costs
in import and export activities and their times could be reduced significantly with the
applications of special line carried out on the railways in Turkey)
• Failure to simultaneously adapt to rapidly changing technology and equipment demands,
despite meeting the high customer satisfaction expectations of new generation vehicle users
Human Resources

• Existence of high number of personnel turnover due to lack of qualified blue-collar personnel
and lack of ownership
• High employment costs of white-collar personnel with sufficient experience and competencies
in the automotive industry and inability to employ the relevant personnel due to the fact that
they do not prefer SMEs with relatively low brand value
• Program and industrial application deficiencies for new generation vehicles in vocational
high schools and vocational schools
• Low number of female employment, especially at management levels
• The fact that small/medium sized companies operating under the sub-industry have not
completed their corporate transformation and are still following sustainable professional
development because they are still being run as family companies.
• Having significant problems regarding the sustainability of production as a result of labor-
intensive production companies, especially in the production systems, key personnel losses,
long quarantine periods, etc.
• Global crises such as the COVID-19 pandemic and/or lack of crisis management teams to
evaluate the risks that will have a breaking effect on the supply chain that will occur at
the local level and to create adaptive action plans (although the automotive industry has
developed risk management processes in the face of global crises, lack of professional crisis/
risk management departments or teams within the companies (especially SME scale))

36
 AUTOMOTIVE INDUSTRY ANALYSIS REPORT AND GUIDE
TR41 REGION (Bursa, Eskişehir, Bilecik)

Business Processes and Technology

• Production systems of SMEs operating under sub-industry are not adapted to flexible
production systems (MES, VMI software, etc.) and robotic technology/IT investments remain
incomplete
• The fact that new product development, testing and approval processes take a very long
time throughout the industry and their distance from new entrepreneur companies that can
serve in technology and product supply processes to large companies in the industry
• SMEs operating under the sub-industry do not use end-to-end integrated software such
as ERP, CRM due to high cost and technology adaptation problems in their supply chain
management and planning processes and/or only use modular systems for key operations
instead of integrated systems.
• Failure to fully implement lean and agile transformation methods, resulting in high operational,
stock and waste costs and environmental impacts.
• SMEs delaying or canceling investments related to the improvement of production
capacities and technological modernization, which are especially necessary to increase their
competitiveness, due to high capital requirements and liquidity problems.
• Significant increase in logistics costs and supply times due to the difficulties in the logistics
processes experienced by the companies in the region, especially during the COVID-19
outbreak (excessive waiting times outbreak in port and road customs, and container/trailer
supply difficulties, etc. due to the COVID-19)
• It is observed that a large volume of products with low added value ($/kg) in the automotive
value chain throughout the region are met by the sub-industry. Creating industrial awareness
especially in the light of global trends, shaping company cultures to offer solutions (data
analysis, digital systems, etc.) for new generation products.
Financial and Administrative Processes

• Considering the competitors of the sub-industry producers operating in the region in

Eastern Europe and Far East countries, both the high energy input costs and the extreme
fluctuations in macroeconomic parameters significantly affect the competitive level of the
industry and the lack of financial support mechanisms in these areas.
• Lack of the common working culture of the sub-industry companies in the region and the
deficiencies experienced in the processes of joint development and production of high
value-added products or products
• Difficulties in finding new customers due to the long-term sales contracts of medium/large-
scale companies with OEMs or 1st tier sub-industry companies and the slow and difficult
supplier transitions throughout the industry.
• Credit supports provided by Eximbank to exporting companies could not be applied to the
sales channels of the same firm belonging to group companies residing abroad and VAT
refund receivables were significantly reserved within the scope of loan transactions and as a
result of this situation, the financial sustainability of the companies was negatively affected.
• Failure to sufficiently follow product and process standards and CE/ISO certifications
• Lack of infrastructure and manpower to follow the process regarding what kind of additional
sanctions/measures should be taken by the small/medium-sized companies in the region
against the regulation changes such as environment, security and data management in the
EU and American markets where the majority of foreign trade activities are carried out, and
Adaptation difficulties to be experienced in the transformation process
• The fact that the parking age of the industry is much higher than the EU average and the
difficulties that it will bring especially in safety and environmental issues (for example, the
scrap vehicle regulation and government incentives in this regard are insufficient)

37
TR42 Region is compared with other automotive production-intensive regions in Figure 20. It was
observed that the TR42 Region;
• The is one of the regions with the most advanced production, logistics infrastructure and
technology development of Turkey in the automotive industry;
• Has a producer company in a leading position together with TR42 Region especially in
terms of financing opportunities, company scales and foreign trade volumes;
• Has companies which show a quite close performance in terms of capacity building, human
resources access to university-industry collaborations, clustering activities and R&D centers
in criteria such as maturity in comparison to Istanbul/Eastern Marmara-based companies
and they have an important position in Turkey's ecosystem.
R&D activities carried out in the general of TR42 Region, public-university-industry cooperation,
training programs, industry infrastructure support, quality management mechanisms, with the
patent and trademark numbers for Turkey to create role models for the automotive industry by
including good practices, make a positive contribution to increase the level of competition within
the global market of automotive industry.

Foreign Trade

R&D Human
Infrastructure Resource

Production Supply chain

Infrastructure management

Technological Level Financing Condştşons

Logistics
Infrastructure
TR42 (MARKA) TR42 (BEBKA) TR33 (ZAFER) TR71 (AHIKA)

Figure 19. Regional Gap Analysis

38
 AUTOMOTIVE INDUSTRY ANALYSIS REPORT AND GUIDE
TR41 REGION (Bursa, Eskişehir, Bilecik)

7. Horizontal Issues
It is observed that most of the Sustainable Development Goals (SDG) defined by the United
Nations under the universal call for action in order to eliminate poverty, ensure sustainable
growth and development, while ensuring the peace and prosperity of all people at the global
level, coincide with the current transformation strategies of the automotive industry. Some issues
that cut regional development and development on a horizontal axis and support sustainable
production activities specific to the automotive industry (for example, crisis management, energy
efficiency and circular economy, climate change, gender equality) were evaluated considering the
sustainable development objectives defined by the UN.

7.1. Crisis Management

The strong negative impact of the COVID-19 outbreak on the global automotive supply chain was
felt similarly for companies in the TR42 Region. In particular, the main and sub-industry companies
operating in the region had to close their production lines between March and June 2020 as a result of
the breakdown of the supply chain starting from China, which is the main raw material/semi-finished
product supplier of the automotive industry. In this process, most of the companies have benefited
from the financial support packages of the state (short-time working allowance, breathing loans,
loan configurations, etc.) and made decisions for their employees to use their annual leaves and/or
to increase their flexible/distance working practices. As of June 2020, there is an intense increase in
demand in the domestic market, as people prefer individual vehicles instead of public transportation
and banks make significant reductions on vehicle loan interest rates. Most of the dealers have postponed
their resumption dates in order to comply with the requirements of the local governments in force due
to the pandemic, to protect the health and safety of the personnel and to prevent the congestion in
the sales points. The dealers continue to serve by reducing their working hours as of June 2020. This
situation had a particularly negative impact on new vehicle sales. The slowdown in customs processes
due to diluted overtime practices due to pandemic conditions, disease-related personnel shortages,
indirectly leads to significant problems in the raw material/intermediate product procurement
processes of companies. As a natural consequence of this process, all producer stakeholders in the
automotive industry are in the 9. They invest or plan in robotic systems that will minimize human-
based risks by modernizing their production systems in line with the purpose (Industry, Innovation
and Infrastructure). In addition, the companies conduct technology-based scientific research to find
solutions to economic and environmental problems, improve them and increase operational efficiency.
Majority of the main industry and large-scale sub-industry companies across the region have been
awarded the COVID-19 Safe Production Certificate issued by the Turkish Standards Institute (TSE) (for
example, Renault, TOFAŞ, Ford Otosan).

7.2 Resource Efficiency

It has become a pioneer in the industry with the transition to fully automatic production systems
(digital transformation), integration of lean/flexible conversion systems, high R&D investments
and sensitivity to environmental factors (circular economy) as a result of the sustainability studies
in the automotive industry in recent years. This situation is in parallel with the outputs obtained
from the survey conducted for the automotive industry in TR42 Region (see. Figure 16).
It is observed that the companies operating in the industry closely follow both national and
international (especially EU) regulations, continue their supply chain activities and take important
actions in the following areas by showing proactive approaches:
i. Elimination of wastes generated in production processes and reduction of wastes on site;

In addition to the full-time production mechanisms of both the main industry and sub-industry
companies throughout the region, minimization of cost and environmental impacts are among the
main targets. Particularly it is ensured that waste products (atmospheric emissions, wastewater,
solid and hazardous wastes) that may arise in production and storage processes are reduced and/
or disposed of in accordance with the defined regulations with lean conversion systems, quality
standardization and advanced prediction models within the system.

39
In addition, the industrial symbiosis mechanism, which has come to the fore in recent years, has
been tested as a pilot application in some organized industrial zones. It was planned to allow the
waste to be reused by another company without disposal by providing waste exchange between
companies (for example, collecting waste metal parts generated as a result of cutting metal
materials in sheet metal processing plants and utilizing them in other metal processing companies
after melting operations). In this way, both environmental impacts (carbon footprint) will be
reduced, and waste management costs of the regional companies will be reduced by creating
economic value.
ii. Use of recyclable raw materials;

With help of the sensitive approaches and policies of consumers and governments on
environmental issues, manufacturing companies operating in the industry have also begun
to shape their own company policies in line with this perspective, and the automotive
industry stands out as a leading industry in the field of environmental impact assessment and
environmental protection. In particular, the European Union's strategies that support the use of
recycled materials at certain rates in vehicles in recent years are actively followed by the main
and sub-industry companies in our country. Plans are made taking into account the principles
regarding reuse and recycling rates in new vehicle production and new vehicle designs. The
most important area in this regard is to produce both environmental and economic added
value by using recyclable, recyclable and reusable materials that can be obtained from end-of-
life (scrap) vehicles. For example, in TOFAŞ company “100% of the industrial wastes generated
in production processes are used in material recovery and as raw materials and energy sources
in the cement industry, thus it achieves “Zero Waste Disposal” target. In addition to the direct
environmental impact it creates, it also conducts studies to control and improve the indirect
environmental impacts throughout the value chain and is committed to continuously reducing
the negative environmental impact” [TOFAŞ, 2020]. In addition, under the leadership of R&D
team of TOFAŞ, some projects have been developed to increase the rate of recycling and the rate
of environmentally friendly materials in vehicles (for example, "OCEAN FABRIC - Production of
seat covers with fabric produced from plastic bottle waste in the sea; MULTICYCLE - Recycling
of plastic raw material with original properties and use of the same raw material for infinite
times with a method developed for biobased polymer in vehicle parts”).
iii. Energy efficiency studies

In order to present the “green” concept, which has become an important part of the sales and
marketing strategies of companies in the automotive industry, energy efficiency studies have
begun to take place in the daily performance indicator sets of the companies. Advantages
such as efficiency, energy and time savings, detailed measurement and reporting are provided
with the digital transformation and automation technologies occurring in the automotive
industry. In addition, in line with the "SDG 7, Accessible and Clean Energy", the manufacturers
try to meet some of their energy needs with renewable clean energy sources, especially by
using solar panels.

7.3 Climate Change

In the recent years, the increase in the awareness of consumers to buy environmentally friendly
products has also affected the automotive industry in addition to the increase in environmental
problems in the world. Aware of this impact, automotive companies have started to focus on
products that are environmentally friendly as well as reduce energy costs and minimize climatic
damage, with an understanding of environmental awareness and sustainability. Particularly after
the implementation of Kyoto Protocol, less carbon emissions have been targeted in the automotive
industry and as a result, the need for new engine and vehicle technologies has grown. In addition,
the automotive industry has serious studies on environmental factors in order to set a "zero
emission" target by 2030 and adopt new carbon dioxide emission standards for vehicles with the
"Green Consent" agreement that the EU has recently accepted. Considering that approximately
80% of our country's automotive exports are directed to EU countries, it is important to take steps
in the automotive industry in line with the new climate management targets defined by the EU.

40
 AUTOMOTIVE INDUSTRY ANALYSIS REPORT AND GUIDE
TR41 REGION (Bursa, Eskişehir, Bilecik)

Automotive industry companies operating in TR42 Region support the production of an

environmentally friendly, economical, low fuel consumption but high performance TOGG
vehicle. In addition, the activities/practices carried out by the companies in the region regarding
environmental and climate issues are summarized below:
• It is observed that the producers in the TR42 Region deem beneficial the studies on green
certified product production, measuring and monitoring the carbon footprint, converting
energy systems into renewable systems or supporting energy efficiency studies in
production lines, but they postpone their investments in the fields and shift their priorities
to increasing their financial and production efficiency due to the uncertainty created by the
COVID-19 pandemic and fluctuations in macroeconomic parameters.
• The environmental impacts caused by the use of motor vehicles are tried to be minimized
by changing the industry within the scope of international protocols. For example, the
obligation to use EURO 6 standards, which significantly reduce carbon emissions in heavy
vehicles, has been introduced.
• Prohibition of the use of diesel engines, which provide 10 times more harmful gas emissions
than gasoline-powered vehicles in passenger cars in Europe's leading countries, is also one
of the important actions to reduce carbon emissions. Likewise, the stratification algorithms
on the special consumption taxes regulated by the Ministry of Treasury and Finance
encourage consumers to prefer conventional and electric vehicles with low engine volume,
which allow low carbon emission.
• It is thought that the transformation of oil-derived fuel sources into hybrid energy in the
short term and into electrical energy in the medium term will also significantly reduce
the environmental impact of the industry. In this context, it is important for our existing
manufacturers to turn to alternative energy vehicles and to attract new alternative energy
vehicle investments that will make a difference in the new automotive eco system in our
country. In line with the EU's “zero emission” target by 2030, electric vehicles will be
significantly encouraged and it is planned to establish 1 million public charging points
across Europe by 2025 [EC, 2019].
• An important majority of the companies, especially large-scale companies such as TOFAŞ,
Beycelik Gestamp, BOSCH, were awarded the "Zero Waste Certificate" by the Ministry of
Environment and Urbanization in line with their Zero Waste Management Systems they
have created by understanding of sustainable environmental management, preventing
pollution at its source, preventing waste with responsible and efficient use of resources,
separating and recycling the wastes at the source.

7.4 Gender Equality

Based on the World Economic Forum's Global Gender Gap Report, published in 2020 [WEF, 2020],
Turkey ranks 135 among 153 countries on labor participation. According to the same report the
number of professional and technical workers in terms of the ratio of the number of men working
in Turkey, the number of female employees is approximately at the level of 67%. According to
the survey study conducted by OSD in 2018, the rate of white-collar female employees working
in the automotive industry was found to be 25%, which is above the rate of white-collar female
employees working in the industry (23%). Increasing women's employment is seen as one of the
most important steps to be taken to overcome the “talent crisis” in the automotive main and
supplier industry. The reason for this situation is that 95% of white-collar female personnel
working in the industry have a university or higher education. Women managers are supported by
mentoring and development programs, especially in order to balance the composition of men and
women at management levels [Siyahhan, 2018].
In the well-attended survey study conducted by Deloitte in 2018 [Siyahhan, 2018], the industry-
related evaluations of 1.143 white-collar women employed in the automotive industry were obtained
and the results were compared with Deloitte's results in previous years, with the participation
of 200 European and 330 American women. As a result of this study, the automotive industry
shows a male-dominated profile. Besides, when its internal dynamics are examined, it is seen that
the industry is fair. In the evaluations made, the rate of those who think equal performance is

41
expected from women and men during the operations is 44%, and the rate of those who think
higher performance is expected from women is 31%. The proportion of those who think higher
performance is expected from women is 55% and 92% for Europe and the USA, respectively. It is
observed that there is a fair distribution to a large extent in the automotive industry in terms of
remuneration of white-collar female employees.
In addition, based on the survey study carried out in TR42 Region, the rate of the female employees
was found to be approximately 27.3% in the total number of employees in the automotive industry
and it is approximately 6% more than the average of Turkey. Considering only the number of white-
collar personnel, the rate of female employees has increased to 35.3% and this situation shows that
the industry attaches importance to gender equality at the management level. However, according
to the data of the 2020 annual report of TOFAŞ, which is one of the important main industrial
companies of the region, the rate of white-collar female employees is 23%, but the rate among
hourly paid blue-collar personnel has decreased to 6% [TOFAS, 2020].
Equal Opportunity Model Certificate, which is given by the Association of Women Entrepreneurs
of Turkey to the companies that implement the gender equality approach in the process of
recruitment, education, career planning, is given importance by the automotive industry's main
and 1st stage industry companies.
BOSCH company organizes "On-the-Job Training for Women" programs in cooperation with Bursa
Provincial Directorate of Labor and Employment Agency at certain periods in order to increase
women's employment.
In addition, it is encouraged specialization International Labor Organization which provider and
Turkey Automotive Care Association of female workers employed in the automotive industry by
making gender inequality assessments by the Federation and more active participation of women
in their management positions related to the work of the United Nations world.

42
 AUTOMOTIVE INDUSTRY ANALYSIS REPORT AND GUIDE
TR41 REGION (Bursa, Eskişehir, Bilecik)

8. Short, Medium and Long Term Strategies

and Action Plans
The industrial strategies were defined under 5 main headings with the purposes of: The automotive
industry, which is one the most important industries with its employment, production and foreign
trade volumes in Turkey and TR42 Region to;
• Have increased level of competition by catching up with global trends;
• To include design, development, production and/or rapid integration of new products that
will emerge on a global scale into the regional ecosystem;
• To exhibit more flexible and adaptive approaches in the face of fluctuations and breakages
that may occur in supply chains.
industrial strategies were defined under 5 main headings.
Both primary data sources (survey results and focus group meetings) and secondary data sources
were used in the design and development of relevant strategies, sub-strategies and action plans.
Especially the upper-scale strategy documents prepared for the industry (11th Development Plan
Automotive Working Group Report [Ministry of Development, 2018], Turkey Automobile Industry
Strategy Document and Action Plan (2016-2019) [STB 2016] and TR42 Coast Plan (2014-2023)
[BEBKA 2015] etc.) have been used.

Developing Dynamic Pricing

Integration of New Products Transformation into Flexible
Mechanisms
into the Market Business Models
Sales/Marketing

Developing Customer
Use of New Generation
Oriented Sales Strategies
Sales Methods Developing Business Integration of Innovation
Processes with Artificial Mergers & Acquisitions Management and Design
Intelligence Algorithms (M&A) Oriented Thinking Methods
Infrastructure

Developing Charging
Revision of Existing Transforming the Transpor-
Station Network for Integration of ITS systems Creation of
Logistics Systems tation Infrastructure into a
Alternative Fuel Vehicles Smart Cities
suitable form for combined
transport

Implementing New
Developing Supplier Risk
Adjustments for Capacity/ Generation Supply Chain Transformation into Ensuring Digital Transfor-
Management Mechanisms
Production

Stocks/Workers Management Optimization Productive Lean Flexible mation

Models Production

Taking Cost-Reducing Developing Supporting Revision / Postponement / Transition to Sharing

Precautions in Production Mechanisms for Imported Switching of Investments Economy (Performing
Finans

Financial and Liquidity

and Supply Processes Substitutes and New
Stabilization
Generation Technologies IT, Electronic Production
Services with Same
Companies)

Short Term (0-1 Year Mid Term (1-3 Years) Long-Term 3-10 Years

Figure 20. Positioning Actions in Different Spaces and Time Intervals*

*-Prepared by the author

43
 Strategy 1. Developing Training and Consultancy Increasing Industrial Design and Branding Forming and Developing Sectoral Clusters
Skills and Capacity Programs

• Vocational Training Programs • Designs for imports • Increasing the number of clusters in supply
• Internship and Application Intensive • TOGG branding industry
License Programs • Supply Industry Transformation Programs • Developing the competencies and capacities
• Personnel Competency Programs of existing

Strategy 2. Dissemination of Test and Perfection Developing University – Industry

R&D Infrastructure Centers Developing New Generation Technologies
Cooperation

• Vocational Training Programs
• Internship and Application Intensive License
Programs
• Personnel Competency Programs
• Developing light and durable materials
• Technologies related to autonomous and
connected vehicles
• Technologies in the field of electronics and
software
• Developing University / Vocational High School
Research Infrastructure
• Funding of joint national / international R&D
projects

Strategy 3. Integration of Value Added Improving Operational Improving Infrastructure for New
Physical Systems Infrastructure Generation Markets
Infrastructure
• Industrial Robotics in Manufacturing Systems • Increasing the number of automotive OIZs
• Flexibility and Risk Management Software in • Increasing the number of Auto-Ports • Developing Charging Station Network for
Supply Chains • Transforming the Transportation Infra- Alternative Fuel Vehicles
• Environmentally Friendly New Generation structure into a suitable form for combined • Integration of ITS systems
Technologies transport

Strategy 4. Adaptation to International

Revising National Regulations
Legal Regulations Regulations

• Tax and Foreign Trade Regulations for

• Climate Change Adaptation Packages Vehicles using Environmentally Friendly Fuel
• Type Test and Inspection Certificates Technologies
• Regulations for Recycling and Scraps • Regulations for technology, innovation and
human resources

Strategy 5. Supporting of Foreign Trade Activities Supporting of Industrial Development Improving Industrial Productivity
Financial Arrangements

• Loan Support for Digital Transformation

• Use of electric vehicles in public
procurements and leasing
• Supporting of fairs in Iran, Africa and
• Regional Incentive Packages
Middle East
• Providing supporting loans
• Support for procuring import substitutes
• Incentives for energy, labor and input costs
• R&D support for New Generation Techno-
logical Products

44
 AUTOMOTIVE INDUSTRY ANALYSIS REPORT AND GUIDE
TR41 REGION (Bursa, Eskişehir, Bilecik)

Tablo 12. TR41 Region Automotive Industry Strategy and Action Table

Sub Estimated Application

Strategy Actions Explanation
Strategy Budget Term
• Supporting blue-collar intermediate staff/
employee qualifications with vocational
training
• Some training programs carried out under
the BEBKA Technical Support Program
(For example, Sheet Metal Mold Training,
Style-to-Vehicle Plastic Injection Mold
Process Training, Automotive Part Com-
missioning/Project Management System
Training, CNC Lathe Operator Training,
etc.)
• Designing and delivering practice-orient-
ed vocational training programs to meet
the expectations of the industry within
Action 1.1.1 Eskişehir Chamber of Industry Vocational
Designing and Training Center (ESO-MEM), which was Micro In- 1-3 Years
Implementing realized in Eskişehir with BEBKA Guided vestment (Medium
Vocational Project Support. (<100 Term)
Training Pro- • Identifying and monitoring measurable Million TL)
grams performance criteria (for example, the
internship period of automotive graduates
Skill and Capacity Building

of vocational high schools, the number of

Strategy 1.1 industrial applications in vocational high
Develop- school programs, etc.) with workshops
Strategy 1

ment of where the stakeholders of the industry take

Training part for the training contents/quality and
and Con- the quality ofthe graduates
sultancy • Increasing the competencies of the electric,
Programs hybrid vehicle, technology and design
development programs that have been
established or are in the process of being
established in the eyes of both instructors
and students and supporting the promotion
of the programs
• Enriching training and mentoring activi-
ties in order to prepare especially for the
new generation trends in the automo-
tive industry in order to adapt qualified
white-collar personnel to the international
competition process and bring them to
Aksiyon 1.1.2*
the industry.(For example, training in
Designing and Micro In- 1-3 Years
areas such as new generation purchasing,
Implementing vestment (Medium
sales-marketing techniques; data manage-
Professional (<100 Term)
ment; in-house hacklathon/entrepreneur-
Development Million TL)
ship competitions; digital transformation
Programs
applications, etc.)
• Designing cloud platforms for institution-
al capacity development and personnel
competence development and promoting
online applied training programs for the
development of the industry

*-It is the action plan in which the strategy to be designed on a national scale can be customized in line with the dynamics of the region.

45
 Sub Estimated Application
Strategy Actions Explanation
Strategy Budget Term
• Designing consultancy and training pro-
Action 1.1.3* grams in the fields and sharing application
Designing and examples in cooperation with model/pilot
Implementing factories in the region and digital transfor-
Micro In-
Consultancy mation, flexible transformation, sustain- 1-3 Years
vestment
Programs Re- able lean manufacturing in areas such (Medium
(<100
lated to Digital as green SME, especially for SME-scale Term)
Million TL)
and Flexible companies, to maintain flexible and adap-
Transformation tive supply chain management, which is
Strategy 1.1 Systems one of the important implications of the
Develop- COVID-19 crisis
ment of
Training • Supporting women-oriented human re-
and Con- sources planning aimed at tackling gender
sultancy Action 1.1.4** inequality across the industry
Programs Designing and • Increasing practical internship programs
Implementing and promoting industrial advantages, es-
Micro In- 1-3 Years
Mentoring and pecially in vocational high school and high
vestment (Medium
Development school periods, in order to attract female
(<100 Term)
Programs for employees to the automotive industry at
Million TL)
the Employment an early age.Designing and promoting
of Disadvan- special programs for the employment
Skill and Capacity Building

taged Groups of disadvantaged groups (especially

disabled, young groups) in SME-scale
companies throughout the industry.
Strategy 1

• Performing localization studies of metal

and plastic fasteners imported from Far
Eastern countries in the TR42 Region,
where quality problems are encountered
a lot.
• Bringing the components (especially
Action 1.2.1 Mezo In-
software and electronic parts) to be im- 1-3 Years
Supporting De- vestment
ported from abroad for the TOGG vehicle (Medium
signs for Import (> 100
to the country's economy as a result of Term)
Substitution Million & <1
R&D activities by using the region's wide
Billion TL)
Strategy 1.2 production network.
Increasing • Conducting local supplier assessment and
Industrial development programs in order to accel-
Design and erate the process of involving domestic
Branding suppliers of the TOGG tool and to manage
them in a healthy way.
• Supporting works such as participation in
fairs, B2B meetings, related products for
Action 1.2.2 the promotion of the intellectual property
Mezo In-
Supporting rights of the sub-industry companies that 1-3 Years
vestment
Branding Activi- carry out production activities for both (Medium
(> 100
ties of Domestic TOGG and conventional vehicles in their Term)
Million & <1
and National own R&D centers and/or in cooperation
Billion TL)
Products with the university-industry launch events
with the participation of key companies
from the market

*-It is the action plan that can be applied for the region in line with global trends.
**- It is the action plan in which the strategy to be designed on a national scale can be customized in line with the dynamics of the region.
46
 AUTOMOTIVE INDUSTRY ANALYSIS REPORT AND GUIDE
TR41 REGION (Bursa, Eskişehir, Bilecik)

Sub Estimated Application

Strategy Actions Explanation
Strategy Budget Term
• Identifying and making an inventory of
Action 1.2.3 products that can be produced through-
Skill and Capacity

Strategy 1.2 Supporting out the region, add value to the industry
Increasing Consultancy and import substitutes, and develop the Micro In-
Strategy 1

Building

1-3 Years
Industrial and Training patenting and branding processes of vestment
(Medium
Design and Programs on these products (<100
Term)
Branding Intellectual and • Conducting institutional capacity building Million TL)
Industrial Prop- programs for R&D studies of SMEs with
erty Rights Chambers of Commerce and Industry and
Cluster Organization
Action 1.3.1*
• Establishing sub-clusters and supporting
Increasing
their activities, especially in sub-industry
Clustering Sup-
production areas where the TR42 Region
port Program Micro In-
is strong, with the aim of developing the 1-3 Years
Applications vestment
clustering approach, expanding R&D, (Medium
for Increasing (<100
innovation and industrial design applica- Term)
the Number of Million TL)
tions in the automotive industry (for ex-
Clusters in the
ample, textile materials, safety equipment,
Sub-Industry
glass, automotive plastic parts)
Area
• Enriching cluster activities by taking into
Action 1.3.2 account the automotive industry compa-
Establish- nies and IT/Electronic companies cooper-
ing Support ation initiatives Micro In-
1-3 Years
Mechanisms for • • In the process of localizing TOGG, vestment
(Medium
Current Clusters' supporting partnerships such as clusters/ (<100
Skill and Capacity Building

Term)
Competence joint ventures for the purpose of both Million TL)
Strategy 1.3 and Capacity developing a culture of joint cooperation
Creat- Development between suppliers and developing com-
Strategy 1

ing and mon know-how.

Developing Action 1.3.3
Industrial Micro In-
Supporting SEIC • Sharing successful partnership examples 1-3 Years
Clusters vestment
Activities Spe- and models, raising awareness about part- (Medium
(<100
cific to Sub-In- nership culture Term)
Million TL)
dustry Activities
• Adding innovation and research methods
to existing high school and higher educa-
tion curricula in the region
• Increasing the implementation of financial
Action 1.3.4
support programs that will increase the
Creating En-
access of entrepreneurs to information,
trepreneurial Micro In- 1-3 Years
financial resources and entrepreneurship
Ecosystem and vestment (Medium
networks
Ensuring Their (<100 Term)
• Increasing the basic business establish-
Integration with Million TL)
ment and management skills of potential
Industry
entrepreneurs in the region through train-
ing/certificate programs
• Developing the necessary infrastructure
for the development of innovation-orient-
ed entrepreneurship

*- It is the action plan that can be applied for the region in line with global trends.

47
 Sub Estimated Application
Strategy Actions Explanation
Strategy Budget Term
• Implementation of integrated facilities
Action 2.1.1* that will allow the performance/life/per-
Strategy 2.1 TYPE Approval, formance tests (hydraulic, mechanical,
Dissemi- Quality Control, electronic, climatic, etc.) of motor vehicles
Micro In-
nation of Certification and their parts and components to be car- 1-3 Years
vestment
Testing and etc. Establishing ried out and certified in accordance with (Medium
(<100
Excellence and Expanding international regulations and standards. Term)
Million TL)
Centers Facilities Where • Carrying out the necessary promotional
Processes Can and advertising activities for the use of
Be Integrated the integrated facility to be established by
companies operating abroad
• Developing strategic products by defining
the necessary R&D supports to support
localization in efforts to increase it and
to produce the relevant products in the
region. For example;
Action 2.2.1**
• In the field of raw materials, where the Mezo In-
Development of 1-3 Years
added value will be the highest vestment
Light and Dura- (Medium
• New generation sheets, engineering (> 100
ble (nano-level) Term)
plastic; Fuel savings and reduction of Million & <1
Materials
accident and damage rates with light Billion TL)
but robust materials (carbon fiber,
enhanced aluminum, etc.)
Supporting R&D Infrastructure

• Development of reinforced steel,

ceramic products, aluminum alloys for
conventional tools
• Creating prototypes of new generation
Strategy 2

technologies and products in the fields

of electricity, electronics, mechatronics,
software, and supporting their commer-
Strategy 2.2 cialization potential
Devel- • Electrical domestic brand vehicle (TOGG)
opment sensor, electronic parts, transmission
of New organs and so on. producing prototypes
Generation of high value added products
Technolo- • Supporting R&D activities for key tech-
gies nologies such as battery technologies,
Action 2.2.2* new generation gearbox, and providing
For New Gen- necessary collaborations
eration Vehicles • Development of holistic technologies that Mezo In-
(autonomous, can simultaneously integrate the intelli- vestment 1-3 Years
connected, gent transportation systems infrastructure (> 100 (Medium
electric, etc.) of new autonomous and connected vehi- Million & <1 Term)
Supporting Do- cle technologies and driver behaviors Billion TL
mestic Technol- • Supporting research and test applications
ogy Studies for new generation fuel technologies
(such as hydrogen fuel cells)
• Researching alternative environmentally
friendly ways of using new technologies,
materials and software developed and
designed for the automotive industry and
supporting their use in the creation of
smart cities
• 5G and V2X technologies; remote sensing
(sensor like radar/lidar) systems; Support-
ing research studies such as optimization
of 5G network structures

*- It is the action plan in which the strategy to be designed on a national scale can be customized in line with the dynamics of the region.
**It is the action plan that can be applied for the region in line with global trends.

48
 AUTOMOTIVE INDUSTRY ANALYSIS REPORT AND GUIDE
TR41 REGION (Bursa, Eskişehir, Bilecik)

Sub Estimated Application

Strategy Actions Explanation
Strategy Budget Term
• Making high value-added products that
Action 2.3.1 will be developed by using funding op-
Micro In-
Supporting R&D Infrastructure

Supporting R&D portunities such as Horizon Europe, IPA, 1-3 Years

vestment
Projects Using World Bank etc., and also ensuring that (Medium
Strategy 2.3 (<100
Overseas Funds the pilot applications of high value added Term)
Develop- Million TL)
products in the regional ecosystem are
Strategy 2

ment of carried out

University &
Industry Action 2.3.2*
• Developing and supporting the labora-
Collabora- Supporting
tory infrastructures of universities and
tions Research Micro In-
vocational high schools that train qualified
Infrastructure vestment 3-10 Years
personnel for the automotive industry,
in Universities/ (<100 (Long Term)
where they can conduct practice-oriented
High Schools Million TL)
research, within the framework of pub-
and Vocational
lic-university-industry cooperation.
High Schools

• Supporting the use of flexible and chang-

Action 3.1.1*
ing production lines by using Industry
Supporting the Mezo In-
4.0 applications and fully autonomous
Integration of vestment
robotic systems, creating a technology 3-10 Years
Industrial Ro- (> 100
pool of production systems that can be (Long Term)
botic Systems Million & <1
an example in this regard, and supporting
Strategy 3.1 in Production Billion TL)
simulation studies that can reflect their
Integration Systems
gains to the industry in a concrete way
of High
Technology
Systems Action 3.1.2*
Encouraging
Physical Infrastructure Development

• Encouraging the integration of ERP and Mezo In-

Green-Themed
CRM modules to be developed using new vestment
Software That 3-10 Years
generation solution algorithms, and sup- (> 100
Provides Flex- (Long Term)
porting their potential gains with simula- Million & <1
ibility and Risk
tion studies. Billion TL)
Management in
Strategy 3

Supply Chains

• In the TR42 Region, the automotive indus-

try and supporting industries (electronics,
informatics, etc.) are predominantly inte-
grated with manufacturing companies, as
well as other components of the cluster,
educational institutions, service providers,
Aksiyon 3.2.1*
entrepreneurs, R&D centers, which offer
Strateji 3.2 Designing and Mezo In-
advanced technological and logistics
Improving Implementing vestment
infrastructure services. design and imple- 3-10 Years
Operational New Genera- (> 100
mentation of areas (campuses) (Long Term)
Infrastruc- tion Integrated Million & <1
• (For example, Bursa Teknoloji OIZ (TE-
ture Production Billion TL)
KNOSAB) located in the TR42 Region is
Campuses
being built as a good example of such an
integrated campus. Providing financial
and organizational support to support
and enrich the investment related to both
BEBKA Financial Support Programs and
the resources of the Ministry)

*- It is the action plan that can be applied for the region in line with global trends.

49
 Sub Estimated Application
Strategy Actions Explanation
Strategy Budget Term
• Providing an advanced and integrated
transportation network that will enable
combined transportation by developing
Action 3.2.2*
the port infrastructures (both digital and
Strateji 3.2 Increasing Au-
operational capacity) in Gemlik Region, Macro In-
Improving to-Port Quali-
completing the railway integration vestment 3-10 Years
Operational fied Ports and
• Manufacturing companies carry out their (> 1 Billion (Long Term)
Infrastruc- Enriching Com-
activities in their foreign trade activities by TL)
ture bined Transport
using direct railway-seaway options inde-
Activities
pendently of road transport by enriching
the railway connection lines throughout
the region
Physical Infrastructure Development

• Disseminating network design and ca-

pacity management models to the whole
region by starting from the pilot districts
Action 3.3.1* by supporting the physical infrastructure
Development (charging stations, electricity generation, Macro In-
Strategy 3

of Charging grid, etc.) with advanced forecast models vestment 3-10 Years
Station Network in order for electric vehicles to become (> 1 Billion (Long Term)
for Alternative widespread TL)
Fuel Vehicles • Feasibility studies of lithium battery
Strateji 3.3 production facilities, hydrogen fuel cell
Develop- and recycling facilities are carried out and
ment of In- included among investment priority facilities
frastructure • Designing smart city concepts in the
for New process of widespread use of autonomous
Generation and connected vehicles, and designing
Markets and developing cloud-based data man-
agement systems where integrated data
Macro In-
Aksiyon 3.3.2* management can be provided by munici-
vestment 3-10 Years
Integration of palities or participating institutions
(> 1 Billion (Long Term)
ITS Systems • Establishing multidisciplinary research
TL)
teams that will actively use big data
analysis methods and build and manage
real-time planning and management
mechanisms, and start pilot studies for the
near future
• Considering that the region's automotive
exports are in the range of 75% to 80%
towards EU countries, it is important to
Legal and Administrative Regulations

take steps in the automotive industry in

line with the EU's targets. Considering
the Green Consensus and Paris Climate
Aksiyon 4.1.1* Agreements, additional actions to be tak-
Strategy 4.1
Accelerating en for export companies/process chang-
Strategy 4

Compli- Micro In-

Compliance es/tax burdens result in additional costs 1-3 Years
ance with vestment
with EU Climate and risks such as loss of market share for (Medium
Foreign (<100
Change and companies experiencing adaptation diffi- Term)
Regulations Million TL)
Environmental culties. For this reason, establishing special
Legislation teams against the legislative changes that
will significantly affect the dynamics of
the industry in the near future, sharing the
transformation process with the industrial-
ists and creating checklists for the things to
be done to ensure the general adaptation
of the industry.

*- Ulusal ölçekte tasarlanılacak stratejinin bölge dinamikleri doğrultusunda özelleşebileceği eylem planıdır.

50
 AUTOMOTIVE INDUSTRY ANALYSIS REPORT AND GUIDE
TR41 REGION (Bursa, Eskişehir, Bilecik)

Sub Estimated Application

Strategy Actions Explanation
Strategy Budget Term
• Design and implementation of systems
Action 4.1.2*
that will allow the type approval, testing
Type Approval, Micro
and certification processes of vehicles to 1-3 Years
Regulation of Investment
be carried out from a single center (Medium
Test and Inspec- (<100 Mil-
• Supporting local accredited institutions to Term)
tion Certifica- lion TL)
stop foreign dependency in testing and
tions
certification processes
• Carrying out a detailed feasibility study
for the recycling process by determining
the number of vehicles that are scrapped
Strategy 4.1 in the market due to the very old age of
Compli- the vehicle parks in Turkey and the re-
ance with gion's ecosystem in comparison to the EU
Foreign standards and particularly due to safety
Regulations and environmental issues
Action 4.1.3* Micro
• In the EU harmonization process, within 1-3 Years
Regulation of Investment
the scope of sustainable environmental (Medium
Recycling and (<100 Mil-
protection strategies of the industry, it is Term)
Scrap Vehicles lion TL)
foreseen that plastic and metal products
used in the production of vehicles contain
Legal and Administrative Regulations

recycled materials in certain proportions.

In this context, designing financial support
programs and designing potential recy-
cling strategies specific to the region by
bringing industry companies together in
Strategy 4

order to carry out relevant R&D studies.

Action 4.2.1*
Regulation • Under the EU climate management
of Tax and legislative amendment obligations, the
Micro
Foreign Trade reduction of SCT and Customs Duties 1-3 Years
Investment
Regulations for electric/hybrid vehicles that use new (Medium
(<100 Mil-
for Vehicles generation fuels with low carbon emis- Term)
lion TL)
Using Environ- sion emissions, in a more advantageous
ment-Friendly format.
Fuel Technology
• Revising the legislation on incentive
mechanisms for technological invest-
ments to improve regional competition
Strateji 4.2
Action4.2.2 for University - Industry collaborations,
Revision of
Regulation of especially in the production processes Micro
Domestic 1-3 Years
Technology, of high value-added product groups for Investment
Regulations (Medium
Innovation and import substitution and/or electronic and (<100 Mil-
Term)
Human Resourc- software development processes for new lion TL)
es Regulations generation vehicles (especially for TOGG
subcomponents); R&D activities; tax bur-
dens on new employment; and develop-
ing new regulations
Action 4.2.3 • Developing a support mechanism where-
Arrangement of by the number of patents, utility models, Micro
1-3 Years
Regulations for designs and registrations will be increased Investment
(Medium
the Protection rapidly by implementing the Regulations (<100 Mil-
Term)
of Intellectual on the Protection of Intellectual Property lion TL)
Property Rights Rights at a significant level.

*- It is the action plan that can be applied for the region in line with global trends.

51
 Sub Estimated Application
Strategy Actions Explanation
Strategy Budget Term

• Cooperating with institutions such as TSE,

Administrative

Action 4.2.4
Regulations
Strategy 4

Strategy 4.2 TURKAK, and supporting the standardiza- Micro

Legal and

Supporting 1-3 Years

Revision of tion of products and services and the pro- Investment
Quality and (Medium
Domestic cesses of obtaining international quality (<100 Mil-
Standardization Term)
Regulations certificates and ensuring that they comply lion TL)
Studies
with the new EU regulations.

• Developing technical trips, fairs, B2B

meeting platforms for new markets which
Action 5.1.1
*
have not reached sufficient maturity
Improving the
although a significant part of the current
Opportunities of
export activities continues increasingly
Sub-Industry to
towards the EU and American countries
Foreign Markets
in order to prevent the production and Micro
and Support- 1-3 Years
turnover loss in the relevant crisis envi- Investment
ing Fairs and (Medium
ronments by creating alternative market (<100 Mil-
Export Activities Term)
opportunities for the manufacturers in the lion TL)
for Alternative
region as a result of any political crisis that
Markets (African
may arise with the relevant countries and
and Middle
providing information and guidance for
Eastern coun-
the companies (especially SMEs) to use
tries
the incentive mechanisms offered within
the Ministries
Establishing Financial Support Mechanisms

Strategy 5.1 • Improving this process, which creates a

Supporting significant financial burden on the finan-
Foreign cial systems of manufacturing compa-
Trade Ac- nies, by providing improvements in VAT
tivities receivables that are blocked in the system
Strategy 5

against export credits provided through

Eximbank.
• Evaluating the activity of export sales
volumes realized in centers based over-
Mezo In-
seas of the Turkey-originated producer 1-3 Years
Action 5.1.2 vestment
companies and making them benefit from (Medium
Increasing Ex- (> 100
Eximbank loans Term)
port Support Million & <1
• Revising the customs tax rates on the
Billion TL
product groups that will create added
value for the country and supporting the
nationalization processes of the relevant
products
• •Encouraging applications to Global
Supply Chain (KTZ) Competency Projects
carried out by the Ministry of Trade to
support exports and ensuring that the
relevant support mechanisms are used.
• Organizing support campaigns, compe-
titions and special promotional activities
Strateji 5.2
Action 5.2.1 for the advantages of electric vehicles in Micro
Supporting
Encouraging the order to use domestic electric vehicles Investment 3-10 Years
Industrial
Use of Domestic (TOGG) by the society and to create (<100 Mil- (Long Term)
Develop-
Electric Vehicles an economy of scale in the process of lion TL)
ment
transformation of the industry into new
generation vehicles

* -It is the action plan in which the strategy to be designed on a national scale can be customized in line with the dynamics of the region.

52
 AUTOMOTIVE INDUSTRY ANALYSIS REPORT AND GUIDE
TR41 REGION (Bursa, Eskişehir, Bilecik)

Sub Estimated Application

Strategy Actions Explanation
Strategy Budget Term
• Developing simulation-based dynamic
analysis mechanisms in order to attract
new investments, especially in Eastern
European countries, to the regional eco-
system by preparing a special promotion
and marketing strategy in order to attract
new generation vehicle investments to our
country.
• Identifying partnerships and/or M&As to
be formed by different stakeholders from
Establishing Financial Support Mechanisms

Action 5.2.2 the electronics, software and automotive Micro

3-5 Years
Creating Re- industries in order to create an economy Investment
(Long Term)
gional Incentive of scale and to support the processes of (<100 Mil-
Packages creating national brands and completing lion TL)
their financial analysis
• Designing inter-industrial transformation
Strategy 5.2 programs and supporting entrepreneur-
Strategy 5

Supporting ship in thematic areas in order to evaluate

Industrial the know-how gained in the automotive
Develop- industry in other industries or application
ment areas related to the automotive industry
(For example, a sub-industry company
operating in the sheet-metal cutting in-
dustry in Bursa to produce for the field)
• Shaping financial support (incentive
packages for energy, labor input costs) for
key areas where technology development
is provided and value-added production is
made for the automotive industry, which Macro In-
Action 5.2.3 1-3 Years
will minimize the effects of the COVID-19 vestment
Provision of (Medium
pandemic and increase the competitive- (> 1 Billion
Support Loans Term)
ness of the region. TL)
• Developing financial support mechanisms
for increasing logistics cost burdens that
negatively affect especially a large part of
the companies in the region.

53
 Sub Estimated Application
Strategy Actions Explanation
Strategy Budget Term
• Encouraging new entrepreneurs in
close relations with technology transfer
offices, technology development zones
Action 5.2.4*
Strategy 5.2 and universities for the development Mezo In-
Designing and 1-3 Years
Supporting of innovative ideas, projects, processes vestment
Implementing (Medium
Industrial and products, designing new generation (> 100
Entrepreneur Term)
Develop- automotive-themed entrepreneur support Million & <1
Support Pro-
ment mechanisms Billion TL)
grams
Establishing Financial Support Mechanisms

• Enriching financial resources for the com-

mercialization of products or services with
high added value through tools such

Action 5.3.1**
• Preparing projects for industry-specific Mezo In-
Dijital
product groups defined under the Tech- vestment 1-3 Years
Dönüşümün
Strategy 5

nology Oriented Industry Action program (> 100 (Medium

Desteklenmesi
and supporting the industry for transfor- Million & <1 Term)
için Kredi Pa-
mation Billion TL)
ketleri

• Designing R&D grant programs to develop

Strategy 5.3 embedded sensor technologies (IR, radar,
Action 5.3.2
Improving lidar etc.); adaptive software that provides
İthal İkamenin
Industrial big data management; Sensor technolo-
Sağlanmasına ve
Efficiency gies providing V2V or V2I type data shar- Mezo In-
Yeni Nesil Tekno-
ing; New generation materials with nano vestment 1-3 Years
lojik Ürünlerin
technology support (aluminum sheets, (> 100 (Medium
Geliştirilmesine
carbon fiber, etc.); alternative fuel technol- Million & <1 Term)
Yönelik AR-GE
ogies; advanced planning and forecasting Billion TL)
Destek Program-
models; encouraging industry-university
larının Oluşturul-
cooperation; providing access to research
ması
funds/centers abroad and ensuring that
they are attracted to the region

*- It is the action plan in which the strategy to be designed on a national scale can be customized in line with the dynamics of the region
**-It is the action plan that can be applied for the region in line with global trends.

54
 AUTOMOTIVE INDUSTRY ANALYSIS REPORT AND GUIDE
TR41 REGION (Bursa, Eskişehir, Bilecik)

9. Policy Recommendations
Considering the strategies and action plans defined for the automotive industry operating in
the TR42 Region, the following policy recommendations are recommended to be evaluated and
implemented.

Human Resources and Capacity Development

Application
Policy Recommendation
Term
Designing vocational training programs for human resources and capacity development Short Term
in line with practice-oriented and industrial expectations (0-1 Year
Completing educational activities through real applications in the industrial environment
in line with the input structure/needs of the industry by making an investment
Short Term
partnership with the automotive industry in the process of improving the capacity and
(0-1 Year
infrastructure opportunities of students studying in vocational high schools located in the
Organized Industrial Zones.
Considering the changes that will arise as a result of global trends, new technology
needs, modernized and related process design needs between the institutions that Medium Term
produce educational services and the institutions that demand this service, modernizing (1-3 Years)
the infrastructures and ensuring the adaptation of the applications.
Designing a transition process for the continuity of production during COVID-19
pandemic, the number of unemployment that may arise in the industry as a result of the
Medium Term
cost pressures after the dismissal bans ended, and perhaps below the previous levels with
(1-3 Years)
technological modernization investments, determining the number of unemployment
that may arise in the industry, taking into account socio-economic balances
Making legal arrangements to determine standards and criteria for new generation
Short Term
management styles such as prolonged work, use of online management alternatives
(0-1 Year)
which come to the fore with the COVID-19 outbreak
Following and supporting regular development profiles with talent matching programs,
Medium Term
potential personnel who may be at the management level in the transformation process
(1-3 Years)
of the automotive industry are included in the system in high school
encouraging mentoring and support mechanisms to increase the number of women
Medium Term
employees to above the average of Turkey in order to establish gender equality in the
(1-3 Years)
industry
Finance
Application
Policy Recommendation
Term
Continuation or expansion of financial support packages that protect employees such as 0-1 Years
unemployment insurance, short-time work allowance (Short Term)
Supporting the industry with incentive packages for the options to create new
investments and employment by eliminating the risks in front of both domestic and 1-3 Years
foreign market volumes by ensuring the stability on macroeconomic indicators and (Medium
evaluating the burden of the tax system (for example, high special consumption taxes) Term)
and high interest rates on financial resources
Supporting the consultancy and support mechanisms that will enable the industry
companies (SMEs) to access funds from abroad such as development programs 1-3 Years
that support their competitiveness, and to bring them to the regional ecosystem by (Medium
supporting them with tools such as angel investment, regional venture capital fund, Term)
supporting
Continuing the additional measures taken to reduce the spread rate of the virus as 1-3 Years
a result of the COVID-19 pandemic in the post-pandemic period and supporting the (Medium
additional cost burden of these measures with incentives Term)

55
Conducting promotional activities for new investments in cooperation with TR
1-3 Years
Presidency Investment Office and BEBKA Investment Support Offices, multinational
(Medium
companies and upper umbrella organizations operating in the automotive industry in the
Term)
TR42 Region
Supporting research activities for alternative markets (South America, Africa, the
Middle East, etc.) that are still immature and with high service expectations in order to 1-3 Years
prevent the fragility of the industry in case of any political crisis as an alternative to the (Medium
EU market, which is the main market throughout the industry, and to create incentive Term)
mechanisms
Infrastructure
Application
Policy Recommendation
Term
Organizing TYPE approval, certification and testing processes on a single system, Medium Term
reducing the bureaucratic burden on the system and accelerating the processes (1-3 Years)
Making an optimal network structure and resource planning by analyzing the new
Long Term
infrastructure requirements (electricity generation capacities, charging station
(3-10 Years)
distribution, locations, parking spaces, etc.) that will be needed for new generation
vehicles (electric, hybrid).
Planning and establishing new combined transport network structures that will increase
Long Term
the competition level of the region (taking time, cost, environmental objectives into
(3-10 Years)
consideration) by analyzing the transportation networks used in foreign trade activities
Developing prototypes of new generation product groups that will emerge as a result of
the global trends of the industry (based on the GEAR 2030 analysis published by the EU Long Term
[GEAR, 2017]) and the manufacturing companies and supporting industries in the region (3-10 Years)
(software, electronics, materials, etc.)
Supporting the export of the relevant products to the foreign market by designing and
developing domestic and national technological components specific to the TOGG Long Term
vehicle in the immature market by organizing special R&D programs especially for new (3-10 Years)
generation vehicles
Ensuring creation of regional know-how through supplier evaluation, supplier
development programs by ensuring close cooperation between domestic components to Long Term
be developed for the TOGG vehicle and domestic suppliers to be included in the vehicle (3-10 Years)
supply chain
Supporting the commercialization processes of the relevant start-up companies under
the leadership of technology transfer offices and technology development zones by
designing innovation and entrepreneurship programs for the technological/organizational
Long Term
transformations that the industry envisages in the medium/long term as a result of global
(3-10 Years)
trends (for example, VR/AR technologies foreseen to be used in sales and marketing
channels; big data management to be used in supply chain systems, machine learning;
data security, etc.)
Creating information and support mechanisms through the relevant industry
stakeholders by analyzing the industry's additional regulation changes that will come in
Medium Term
parallel with the EU green consensus and Paris agreement (for example, carbon footprint
(1-3 Years)
tracking, carbon emission reduction, green certificate requirements, etc.) and potential
cost items.
Continuing training activities by establishing training centers for the development of the
Medium Term
industry related to new generation sales and marketing techniques, digital transformation
(1-3 Years)
in production systems and design-oriented thinking methods.
Supporting the transformation processes of companies with financial support
Medium Term
mechanisms by supporting mentoring and consultancy activities during the digital
(1-3 Years)
transformation of the industries and transition to industry 4.0 systems
Reducing the age of vehicle parking and making analyzes against the new environmental,
Long Term
safety and climate related regulations put into effect by the EU, and making incentive
(3-10 Years)
packages and regulation changes in line with the needs

56
 AUTOMOTIVE INDUSTRY ANALYSIS REPORT AND GUIDE
TR41 REGION (Bursa, Eskişehir, Bilecik)

10. TR42 Region Automotive Industry Analysis

Summary

SUMMARY OF THE AUTOMOTIVE INDUSTRY ANALYSIS OF TR42 REGION

THE MOST IMPORTANT STRENGTHS OF TR42 REGION
• Ownership of mature main and sub-industry infrastructure in the fields of passenger car and commercial
vehicle production and presence of leading companies in their fields (industrial knowledge and
experience + intensive foreign trade activities)
• Finding international automotive sub-industry companies and having a wide range of products
• Wide opportunities for university-industry cooperation + 55 Automotive R&D Centers
• Active operation of BOSB Bursa automotive cluster
• Having an active/integrated working environment with local governments and umbrella organizations
(TAYSAD, UİB, OSD)
• Rich logistics infrastructure facilities (Gemlik Ports, Highway Connection Axes etc.)
• The production facilities of TOGG vehicle to be established in the region
• Having strong, innovative and domestic production opportunities in the supply of products or product
groups (especially textile, electronics, machinery and sheet metal molding industries) belonging to
main and large-scale sub-industry companies
• Having Advanced Composite Materials Research and Excellence Center located in Bursa, and crating
opportunities to develop and manufacture composite materials/products that will play an important
role in the future of the automotive industry
• Designing and delivering application-oriented vocational training programs to meet the expectations
of the automotive industry within the Eskişehir Chamber of Industry Vocational Training Center (ESO-
MEM)
• Establishing Bursa Teknoloji OIZ (TEKNOSAB) in the region and supporting an integrated (R&D,
production, service, etc.) infrastructure for the industry
MAIN STRATEGIES FOR ENHANCING INTERNATIONAL COMPETITIVENESS FOR TR42 REGION
• Designing and applying vocational training programs (e.g. electric vehicle programs) for new
generation vehicles
• Supporting integration of industrial robotic systems for SME-scale labor-intensive production
companies
• Transforming some ports in Gemlik region into auto-port form and enriching the combined
transportation activities
• Developing and supporting infrastructure for alternative fuel vehicles (e.g. charging station network)
• Accelerating Compliance with EU Climate Change and Environmental Legislation
• Development of Light and Durable (nano-level) Materials
• Supporting domestic technology studies for new generation vehicles (autonomous, connected,
electric, etc.)
• Encouraging the development and use of green-themed software that provides flexibility and risk
management in supply chains in the face of high-impact risks such as regulation changes and the
COVID pandemic
• Establishing R&D Support Programs for Imported Substitution and Development of New Generation
Technological Products
• Improving the access opportunities of the supplier industry (especially SMEs) to foreign markets and
supporting fairs and export activities for alternative markets (African and Middle Eastern countries)
• Establishing support mechanisms for the competence and capacity development of existing clusters

57
RECOMMENDED ACTIONS FOR REGION TR42
• Taking an inventory for the domestic production of potential components that will be needed for the
electric vehicle transformation of the TR42 Region and for the new generation vehicles (electric, hybrid)
and supporting it within the scope of the Technology Focused Industry Action program of the Ministry
of Industry and Technology with the start of production of TOGG vehicle in Gemlik Region
• Conducting local supplier assessment and development programs in order to accelerate the process of
involving domestic suppliers of the TOGG vehicle and to manage them in a healthy way.
• Supporting digital transformation and transformation to design-oriented production systems in order
to adapt SME-level companies that have just started foreign trade to the change process by listing the
changes in the regulations that occurred/will occur in the US and EU regions in the fields of environment,
climate, security, etc.
• Using some of the existing production infrastructures by exporting to conventional vehicle markets
in countries such as Africa and the Middle East, which are predicted to be unable to complete the
transformation of electric vehicles simultaneously with developed countries in the near future.
• Bringing product groups with high added value to the region through the development of composite
materials that will play a critical role in the industrial transformation with the R&D studies to be carried
out in the Advanced Composite Materials Research and Excellence Center established in Bursa, in
cooperation with the textile-chemistry-automotive industries.
• Establishment of auto-port hubs by integrating the ports in Gemlik Region to advanced combined
transportation activities
• Developing and implementing professional development systems and programs for application-oriented
and new generation vehicles, taking into account new technological requirements in line with the needs
of the industry
• Developing the green OIZ concept and spreading circular economy practices in order to meet the EU
environment, climate legislative changes and consumer expectations (low energy use, low carbon
emission, etc.) under the leadership of Bursa OIZ management
• Designing cloud platforms for institutional capacity development and personnel competence
development and promoting online applied training programs for the development of the industry
• Organizing training and consultancy activities in the fields such as digital transformation, flexible
transformation, sustainable lean manufacturing, green SME in cooperation with pilot/model factories
in the region
• Designing and promoting special programs for the employment of disadvantaged groups (especially
disabled, youth and women groups) in SME-scale companies throughout the industry.
• Supporting the use of flexible and changing production lines by using Industry 4.0 applications and
fully autonomous robotic systems, creating a technology pool of production systems that can be an
example in this regard, and supporting simulation studies that can reflect their gains to the industry in
a concrete way.
• Designing inter-industrial transformation programs and supporting entrepreneurship in thematic
areas in order to evaluate the know-how gained in the automotive industry in other industries (textile,
machinery) or application areas related to the automotive industry
• Carrying out feasibility studies to reduce the age of vehicle parking and evaluate the recyclable materials
that can be used in the production of vehicles, taking into account the new environmental, safety and
climate-related regulations put into effect by the EU.

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 AUTOMOTIVE INDUSTRY ANALYSIS REPORT AND GUIDE
TR41 REGION (Bursa, Eskişehir, Bilecik)

11. Conclusion and Evaluation

The studies carried out are discussed under three main headings as follows within the scope of this
report which was prepared specifically for TR42 Region for the automotive industry, one of the 5
fragile industries defined within the scope of the "Response and Resilience to the COVID-19 Crisis
Project", financed by the Japanese Government and carried out in cooperation with the United
Nations Development Program (UNDP) and the Ministry of Industry and Technology:

A. Assessment of the Industry During the COVID-19 Outbreak

The following findings were reached and observed in the light of the data obtained as a result of
the survey study and focus group meeting, which was organized to obtain a rich perspective and
a broad participant perspective on critical issues specific to the industry:
• Main and sub-industry companies operating throughout the region have partial production
losses due to the COVID-19 outbreak, but do not experience significant turnover losses due
to mainly export activities.
• Due to the COVID-19 outbreak, the companies have taken labor and workplace precautions
at high level.
• Due to the COVID-19 outbreak, serious supply difficulties were experienced, especially due
to the capacity reduction of Far Eastern raw material/intermediate product suppliers and
the decision to stop production.
• Due to the deterioration in the supply-demand balance, the raw material input costs have
increased significantly and in this case, it significantly affects the financial sustainability of
the companies.
• Due to reasons such as labor-intensive production companies, especially in the production
systems, key personnel losses, long quarantine periods, there are significant problems in
the sustainability of production, but these problems are ineffective in companies that use
automation technologies intensively in their production lines.
• Due to the fact that the companies mainly benefit from the financial support programs
provided by the state (breathing loan, partial work allowance, loan structuring, etc.) but
these supports are not sufficient to cover the losses in the industry.
• Due to the fact that the companies tolerate liquidity deficiencies on their own, and this
situation increases the financing costs of companies.
• Due to the fact that the companies throughout the industry have turned to investments to
increase production efficiency instead of investing in areas related to environment, energy
and green systems.

B. Positioning the Region Against Industrial Trends

It has been observed that the companies in the region follow the trends of the region closely due
to reasons such as close cooperation with foreign OEMs and 1st level sub-industry companies in
the region, intensive export activities to developed countries such as the EU and America, the high
density of medium/large-scale companies that have completed their institutional transformation.
Considering the industrial composition and logistics infrastructure advantages of the region, it is
highly probable that the new products that will emerge in line with the global trends will be the
production base and the application area of the systems. In this context, the predicted changes in
the region in line with global trends have been observed as follows:
• The fact that TOGG initiative will create a know-how for the electric vehicle segment at
the regional level and will play an important role in the development, preparation for the
transformation process and integration processes of the sub-industry companies in the
face of this trend of change.
• Focusing on the nationalization of high value-added product groups of new generation
vehicles to be offered to the market by OEMs in the region, especially the TOGG vehicle,
and the production processes throughout the region.

59
 • Designing capacity building and institutional transformation programs that will emerge
in line with global trends through the industrial cluster located throughout the region
and strong research centers based in Istanbul for areas such as digital transformation,
automation, electrification
• Providing import substitution for new generation vehicles by establishing close cooperation
with industries that support the automotive industry (chemistry, textile, metal, etc.)
throughout the region.
• Radically changing the industry's value chain against the policy changes (such as the
"Carbon-Neutral" policies of the European Union) occurring in the European market, which
constitutes a significant part of the export share of the whole industry, especially the
main industrial companies; starting environmentally sensitive technology-oriented studies
urgently and encouraging feasibility studies for related areas (environment, climate, energy,
security, data management, etc.)

C. Suggested Action Plans and Policies for the Development of the

Region's Competition Level
The recommended action plans and policy recommendations for the development of the
automotive industry, which has a significant impact on the socioeconomic development of the
region, and for the region to become a production base on a global scale, as a result of both the
survey study and focus group meeting conducted and the detailed research of secondary data
sources, are summarized as follows:
• It has been observed that the main problem in front of the automotive industry in the
region is the lack of qualified personnel (language skills, lack of industrial experience,
etc.). Developing and implementing professional development systems and programs for
application-oriented and new generation vehicles, taking into account new technological
requirements in line with the needs of the industry
• Designing cloud platforms for institutional capacity development and staff competence
development and promoting online applied training programs for industry development
• Supporting logistics infrastructure systems and combined transportation activities in order
to increase the competitiveness of the manufacturers in the region
• (For example, transforming some of the ports in Gemlik Region into auto-ports and
supporting their operational and technological transformations in line with this strategy;
supporting combined transportation activities between Gemlik ports and production areas)
• It is predicted that the region will take a leading position in the electric vehicle transformation
with the start TOGG production in Gemlik Region. Identifying the products that can be
produced throughout the region, provide added value to the industry and can be imported
substitutes and turn them into an inventories in this direction; improving the patenting
and branding processes of these products; and making an optimal network structure and
resource planning by analyzing new infrastructure requirements (electricity generation
capacities, charging station distribution, locations, parking spaces, etc.)
• Conducting local supplier assessment and development programs in order to accelerate
the process of involving domestic suppliers of the TOGG vehicle and to manage them in a
healthy way.
• Supporting the transformation of digital transformation and design-oriented production
systems with financial support programs and mentoring activities in order to adapt the
manufacturing companies in the region to the change process as a result of the maturation
of the electric vehicle market and the termination of diesel vehicle production in the near
future within the scope of compliance with EU regulations
• Using some of the existing production infrastructures by exporting to conventional vehicle
markets in countries such as Africa and the Middle East, which are predicted to be unable to
complete the transformation of electric vehicles simultaneously with developed countries
in the near future.

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TR41 REGION (Bursa, Eskişehir, Bilecik)

• Bringing product groups with high added value to the region through the development of
composite materials that will play a critical role in the industrial transformation with the R&D
studies to be carried out in the Advanced Composite Materials Research and Excellence
Center established in Bursa, in cooperation with the textile-chemistry-automotive industries.
• Making the region a center of attraction by creating project-based privatizations in
investment incentive programs and bringing global manufacturers operating in the
production of high value-added product groups to the regional ecosystem with BEBKA
Investment Support Office promotional activities
• Design and implementation of integrated areas (campuses) with advanced technological
and logistics infrastructure services that will include the automotive industry and supporting
industries (electronics, informatics, etc.), manufacturing companies, educational institutions,
service providers, entrepreneurs and R&D centers serving the industry within the the OIZs
to be established
• Developing and spreading the green OIZ concept in order to meet the EU environment,
climate legislative changes and consumer expectations under the leadership of Bursa OIZ
management
It has been observed that the current transformation strategies of the majority of the main and
sub-industry companies operating under the automotive industry throughout the region are similar
to or overlap with the global action plans defined by the United Nations' sustainable growth and
development goal. The industry stands out as one of the leading industries in Turkey, especially
with its practices in the fields of environment, climate and energy management. It has a structure
that can establish adaptive and flexible structures and prevent cost increases based on the high-
impact risks such as the COVID-19 pandemic, thanks to the efficiency and crisis management
mechanisms it has put forward in each part of the value chain. In addition, it has been observed
that it is above the average of Turkey particularly in the number of female white-collar workers in
terms of gender equality in the industry.

61
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TR41 REGION (Bursa, Eskişehir, Bilecik)

Annexes
Annex 1. TR42 Region Focus Group Meeting Participant List
Participant List
• UNDP Turkey - Arzu Karaarslan Azizoğlu (Project Coordinator)
• TR Ministry of Industry and Technology - Ahmet Buyer (Expert)
• Bursa, Eskişehir, Bilecik Development Agency - Erhan Öztürk (Bursa Investment Support
Office Coordinator)
• Bursa, Eskişehir, Bilecik Development Agency - Yasin Dalgıç (Expert)
• Bursa, Eskişehir, Bilecik Development Agency - Burak Canbulat (Expert)
• Bozüyük Chamber of Commerce and Industry - Bedri Öztürk (Secretary General)
• Nilüfer Organized Industrial Zone - Mehmet Koçer (Regional Manager)
• Şahince Otomotiv - Özgür Şahin (General Manager)
• Aktaş Hava Süspansiyon Sistemleri AŞ. - İskender Ulusay (General Manager)
• Arıkan Otomotiv - Ahmet Arıkan (General Manager)
• Uludağ Automotive Industry Exporters Association - Ayşe Mehtap EKİNCİ (Deputy
Secretary General)
• Eskişehir Chamber of Industry - İsmail Öztürk (Deputy Secretary General)
• Bursa Organized Industrial Zone - Zafer Pehlivan (Customer Relations Manager)
• Uludağ Automotive Industry Exporters Association - Nihal Sinağ - (Branch Manager)
• Bursa Chamber of Commerce and Industry (İsmail Oto) - Ömer Eşer (Council Member)
• TOFAŞ - Ahmet Altekin (Consultant)
• Bursa Serbest Bölge Kurucu ve İşleticisi A.Ş (BUSEB) - Recep Şen (Data Preparation and
Control Operator)

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Annex-2. TR42 Region Automotive Industry R&D Centers List
Sıra BELGE
AR-GE MERKEZİNİN ADI İL SEKTÖR
No TARİHİ
Automotive
1 Tofaş Türk Otomobil Fabrikası A.Ş. Bursa 05/11/2008
Main Industry
Automotive
2 Bosch Sanayi Ve Ticaret A.Ş. Bursa 26/05/2009
Sub-Industry
Automotive
3 Marelli Mako Turkey Elektrik Sanayi Ve Ticaret A.Ş. Bursa 17/09/2009
Sub-Industry
Automotive
4 Beyçelik Gestamp Teknoloji Ve Kalıp Sanayi A.Ş. Bursa 24/12/2009
Sub-Industry
Automotive
5 Oyak - Renault Otomobil Fabrikaları A. Ş. Bursa 22/04/2010
Main Industry
Automotive
6 Coşkunöz Kalıp Makine Sanayi Ve Ticaret A.Ş. Bursa 07/07/2010
Sub-Industry
Automotive
7 Grammer Koltuk Sistemleri Sanayi Ve Ticaret A.Ş. Bursa 29/11/2010
Sub-Industry
Automotive
8 Martur Sünger Ve Koltuk Tesisleri Tic.ve San. A.Ş. Bursa 17/12/2010
Sub-Industry
Automotive
9 Toksan Yedek Parça İmalat Ticaret Ve Sanayi A.Ş. Bursa 16/06/2011
Sub-Industry
Automotive
10 Valeo Otomotiv Sanayi Ve Ticaret A.Ş. Bursa 16/06/2011
Sub-Industry
Automotive
11 Ermetal Otomotiv Ve Eşya Sanayi Tic. A.Ş. Bursa 21/11/2011
Sub-Industry
B-plas Bursa Plastik, Metal, İnşaat, Enerji, Madencilik, Jeotermal, Automotive
12 Bursa 12/12/2011
Turizm, Sivil Havacılık Ve Tarım Sanayi Ve Ticaret A.Ş. Sub-Industry
Automotive
13 Odelo Otomotiv Aydınlatma Anonim Şirketi Bursa 07/02/2012
Sub-Industry
Automotive
14 Feka Otomotiv Sanayi Ve Ticaret A.Ş. Bursa 04/05/2012
Sub-Industry
Automotive
15 Maysan Mando Otomotiv Parçaları Sanayi Ve Ticaret A.Ş. Bursa 07/05/2012
Sub-Industry
Automotive
16 Aka Otomotiv Sanayi Ve Ticaret A.Ş. Bursa 10/07/2012
Sub-Industry
Automotive
17 Rollmech Automotive San. ve Tic. A.Ş. Bursa 29/08/2012
Sub-Industry
Automotive
18 Diniz Adient Oto Donanım Sanayi Ve Ticaret A.Ş. Bursa 18/08/2014
Sub-Industry
Automotive
19 Orau Orhan Otomotiv Kontrol Sistemleri Sanayi A.Ş. Bursa 30/09/2014
Sub-Industry
Automotive
20 Fompak Ambalaj Ve Poliüretan Sanayi Ve Ticaret A.Ş. Bursa 21/01/2015
Sub-Industry
Automotive
21 Skt Yedek Parça Ve Makine Sanayi Ve Ticaret A.Ş. Bursa 23/01/2015
Sub-Industry
Automotive
22 Uzman Kataforez Yüzey Kaplama San. Tic. A. Ş. Bursa 07/10/2015
Sub-Industry
Automotive
23 Bosch Sanayi Ve Ticaret A.Ş. Benzinli Sistemler Bursa 19/11/2015
Sub-Industry
Automotive
24 Teknik Malzeme A.Ş. Bursa 07/01/2016
Sub-Industry

66
 AUTOMOTIVE INDUSTRY ANALYSIS REPORT AND GUIDE
TR41 REGION (Bursa, Eskişehir, Bilecik)

Sıra BELGE
AR-GE MERKEZİNİN ADI İL SEKTÖR
No TARİHİ
Automotive
25 Angst Pfister Gelişmiş Teknik Çözümler A.Ş. Bursa 12/01/2016
Main Industry
Automotive
26 Ford Otomotiv Sanayi A.Ş. (inönü) Eskişehir 28/01/2016
Sub-Industry
Automotive
27 Meklas Otomotiv Sanayi Ve Ticaret Anonim Şirketi Bursa 25/10/2016
Sub-Industry
Yamas Yaşar Makine Kalıp Oto Yedek Parça Sanayi Ve Ticaret Automotive
28 Bursa 24/05/2017
Anonim Şirketi Sub-Industry
Automotive
29 Ünver Grup Otomotiv Sanayi Ve Ticaret A.Ş. Bursa 19/06/2017
Sub-Industry
Automotive
30 Elatek Kauçuk Sanayi Ve Ticaret A.Ş. Bursa 07/07/2017
Sub-Industry
Automotive
31 Kırpart Otomotiv Parçaları San. Ve Tic. A.Ş. Bursa 24/08/2017
Sub-Industry
Automotive
32 T.K.G Otomotiv Sanayi Ve Ticaret Anonim Şirketi Bursa 08/11/2017
Sub-Industry
Automotive
33 Ferkan Yedek Parça Ve Makine Sanayii Ve Ticaret A.Ş. Bursa 13/11/2017
Sub-Industry
Automotive
34 Aktaş Hava Süspansiyon Sistemleri Sanayi Ve Ticaret A.Ş. Bursa 27/11/2017
Sub-Industry
Automotive
35 Plus Kalıp San. Ve Tic. A.Ş. Bursa 09/01/2018
Sub-Industry
Automotive
36 Selsa Özel Makine İmalatı Ve Yan San. Ltd. Şti. Bursa 12/01/2018
Sub-Industry
Pe-ga Otomotiv Süspansiyon, enerji, inşaat, gıda, tarım Ve Automotive
37 Bursa 24/01/2018
Hayvancılık San. Ve Tic.A.Ş. Main Industry
Automotive
38 Güleryüz Karoseri Otomotiv Sanayi Ve Ticaret Anonim Şirketi Bursa 25/04/2018
Sub-Industry
Demircioğlu Şase Endüstriyel Yağ Otomotiv Tekstil Gıda İnşaat Automotive
39 Bursa 12/10/2018
San. Ve Tic. A.Ş. Main Industry
Automotive
40 Akia Hess Otomotiv Kar. İml. San. Tic. Ltd. Şti. Bursa 08/11/2018
Sub-Industry
Automotive
41 Haksan Otomotiv Mamülleri San. Ve Tic. A.Ş. Bursa 06/12/2018
Sub-Industry
Automotive
42 Şahinkul Makine Ve Yedek Parça San. Tic. A.Ş. Bursa 27/12/2018
Sub-Industry
Automotive
43 Pilot Taşıt Koltukları Sanayi Ve Ticaret A.Ş. Bursa 18/01/2019
Sub-Industry
Automotive
44 A-plas Genel Otomotiv Mamülleri San. Ve Tic. A.Ş. Bursa 14/02/2019
Sub-Industry
Automotive
45 Fkt Koltuk Sistemleri A.Ş. Bursa 14/02/2019
Sub-Industry
Automotive
46 İnsu Teknik Makine Sanayi Ve Ticaret Anonim Şirketi Bursa 14/02/2019
Sub-Industry
Automotive
47 Şem Lastik Sanayi Ve Ticaret A.Ş. Bursa 14/02/2019
Sub-Industry
Automotive
48 Sazcılar Otomotiv A.Ş. Bursa 12/04/2019
Sub-Industry

67
Sıra BELGE
AR-GE MERKEZİNİN ADI İL SEKTÖR
No TARİHİ
Automotive
49 Arıkan Kriko Ve Makine Sanayi Ticaret Anonim Şirketi Eskişehir 14/06/2019
Sub-Industry
Automotive
50 Msk Çelik Dövme Sanayi Ticaret Ltd.şti. Bursa 14/06/2019
Main Industry
Automotive
51 Karsan Otomotiv Sanayi Ve Ticaret A.Ş. Bursa 22/07/2019
Sub-Industry
Automotive
52 Çelikform Gestamp A.Ş. Bursa 24/07/2019
Sub-Industry
Doğu Pres Otomotiv Ve Teknik Sanayi Ve Ticaret Anonim Automotive
53 Bursa 24/07/2019
Şirketi Sub-Industry
Automotive
54 F.S.S. Fren Sistemleri Sanayi Ve Ticaret Ltd. Şti Bursa 24/07/2019
Sub-Industry
Otomotiv
55 Formfleks Otomotiv Yan Sanayi Ve Ticaret A.Ş. Bursa 20/11/2019
Yan Sanayi

68
COVID-19 Crisis Response and
Resilience Project
AUTOMOTIVE
INDUSTRY ANALYSIS
REPORT and GUIDE
TR41 REGION