Turkey Automotive Market report intro

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A 130 pages detailed report with full of information on Turkey's automotive market

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Turkey Automotive Market report intro

  1. 1. November 15th, 2012Turkey Automotive Market ReportDear Executives of .........,Youll find a detailed collection of data/info in this report to give indepth information regarding Turkey and itsautomotive market structure.Hope you would get maximum benefit of the report on your businesses.Best RegardsPrepared by Kurthan Tarakçıoğlu 1/8
  2. 2. November 15th, 2012IntroductionThis document is produced by Kurthan Tarakcıoğlu on the request of ......... of ........ .The purpose of this report is to give a candid and insight view of the Turkish Automotive market with regards to .................. brands &vehicles initial understanding and assessment of the potential.Please kindly bear in mind that, consequently; key to success has two important elements; 1. To understand the market and to have genuine desire and the capabilities to compete as an OEM, 2. A financially strong prominent local partner ( ie. distributor ) to establish a strong and competent network of dealers.Thus, we shall be at your full disposal to further assess the potential in detail in all phases of this initiative.The statistical contents of this report are sourced from Industry Associations, related Ministiries, professional experience and contacts.Sources;  Automotive Distributors Association, (ODD)  Automotive Autorised Dealers Association, (OYDER)  Automotive Manufacturers Association, (OSD)  The Association of Automotive Parts and Components Manufacturers (TAYSAD),  The Union of Uludag Automotive Parts and the Components Exporters Associations (UTAYSİB),  Research and promotion platforms, including the Automotive Technologies Research and Development Center (OTAM)  Automotive Industry Promotion Committee (OETK)  Turkey Investment Support and Promotion Agency  Turkey Statistical Instıtute, (TUIK)  Organisation Internationale des Constructeurs d’Automobiles, (OICA)  European Automobile Manufacturers Association (ACEA)  Turkey Researchers Association (TÜAD)  Other published articles and professional resources.Prepared by Kurthan Tarakçıoğlu 2/8
  3. 3. Turkey Automotive Market Report November 15th, 2012Turkey Automotive Market Report :Table of ContentsI. Turkey Highlights .................................................................................... ...4II. Automotive Sector Highlights .................................................................... 6III. Economy Overview ...................................................................................12IV. Automotive Market Overview ..................................................................17 a) Market History........................................................................................................................... 17 b) Market Potential ....................................................................................................................... 22 c) Market Forecast ......................................................................................................................... 23 d) Used Vehicle market and its characteristics .............................................................................. 25 e) Role of Financial Institutions (banks, car finance & leasing co.s) .............................................. 27 f) Industry Structure ...................................................................................................................... 30 g) Level of competition & Market Players attitudes .................................................................... 33 h) Geographical Regions of Turkey & the vehicle park ............................................................... 35 i) Market Segment Structure & Analysis ....................................................................................... 40 j) Trends and Drivers ..................................................................................................................... 58V. Legal, Political, Economical & Socio-Cultural Factors .................................59VI. Distribution and Sales Analysis .................................................................69VII. Competitive Analysis ................................................................................73VIII. Consumer/Customer Analysis ...................................................................86IX. Aftersales Responsibilities .......................................................................96X. Why invest in Turkey and its Automotive Sector .......................................98XI. Route to Market .....................................................................................100Back-up Tables Yearly retail sales break down by Brands..............................................104 ..Vehicle car park by Brand & Provinces..................................................112 Passenger Car Ownership by Customer Segments.................................128Prepared by 3/8
  4. 4. Turkey Automotive Market Report November 15th, 2012 Official Name of Country Republic of TurkeyI. Turkey Highlights Capital City Ankara Government Parliamentary Democracy Population 75 million (2011) Labor Force (Population) 26.7 million (2011) » In recent years, new terms have emerged to describe the Median Age 29.7 (2011) largest developing countries such as BRIC that stands for Area 783,562.38 km² Brazil, Russia, India, and China, along with BRICET (BRIC + Bulgaria, Greece, Syria, Iraq, Iran, Neighboring Countries Azerbaijan, Armenia, Georgia Eastern Europe and Turkey). These countries do not share Istanbul (13.3 million), Ankara (4.8 million), any common agenda, but some experts believe that they Izmir (3.9 million), Bursa (2.6 million), Adana are enjoying an increasing role in the world economy and on Major Cities (Population) (2.1 million) political platforms. Currency Turkish Lira (TRY) GDP USD 772 billion (2011-Current Prices) GDP Per Capita USD 10,444 (2011) Exports Value USD 135 billion (2011) Imports Value USD 241 billion (2011) Foreign Direct Investment USD 15.9 billion (2011) Number of Companies with Foreign Capital 29,283 (2011) Inflation Rate 10.4% (CPI-2011) Germany (10.3%); Iraq (6.2%); UK (6.0%); Major Exports Markets Italy (5.8%); France (5.0%) (2011) Russia (9.9%); Germany (9.5%); China Major Imports Sources (9.0%); USA (6.7%); Italy (5.6%) (2011) » 216 countries ranked in terms of GDP growth, Turkey Customs Union Agreement with the EU ranked 15th among 216. Correct to say that Turkey is among Free Trade Agreements with Albania, the fastest growing economies. Bosnia Herzegovina, Chile, Croatia, EFTA » 227 countries ranked from largest to smallest GDP, Turkey member countries (Switzerland, Norway, Iceland and Liechtenstein), Egypt, ranks 17th. Accordingly, Turkey is classified among the Georgia, Israel, Jordan, Macedonia, wealthy in the world economy. Montenegro, Morocco, Palestine, Serbia, Trade Agreements Syria, TunisiaPrepared by 4/8
  5. 5. Turkey Automotive Market Report November 15th, 2012 » Turkey is a Muslim but secular and democratic country in the Mid-East (the only real democratic one). » Income per capita is ~10.500U$. 226 countries ranked from highest to lowest in terms of per capita income, ranks Turkey 86th. » 75% of the population live in urban areas. » Revenue distribution: 20% of population holds 83% of wealth. The trend for income distribution is improving at a slow but constant rate. » The population of Turkey stood at 75 million with a growth rate of 1.31% per annum. 238 countries ranked in descending order in the world population and Turkey is the 17th most populous country. » 17,8% of the population is located in İstanbul. » Median age is 29,7. Population is much younger compared with European countries, almost 50% is below age of 25. » The total length of the highways in Turkey is around 62,000 km, whereas railway’s length is only 10.940 km. A significant part of governmental (public) spending is on transportation infrastructures (highways, railroads, airports). » Second largest member of NATO. » Turkeys unemployment rate is ~10% and improving. » Human resources generally good and very hard working. » Growth in real estate is significant. » The present governments political motto is to position Turkey as the 10th largest economy in the world by 2023, which will be the 100th anniversary of the Turkish Republic.Prepared by 5/8
  6. 6. Turkey Automotive Market Report November 15th, 2012II. Automotive Sector Highlights the number of vehicles sold in the domestic market was around 900,000 in 2011. The Turkish automotive industry, consisting of 17 domestic and foreign principal producers supplemented by approximately 4,000 sub-industryTurkey’s automotive industry’s foundations date back to the early companies, directly employs some 300,000 qualified workers.1960s, when the first efforts to develop and produce the firstTurkish-made passenger car were undertaken. During a period of Turkey’s GDP per capita in recent years has exceeded USD 10,000 due to itsrapid industrialization and progress, this key sector transformed growing economy and stable fiscal structure, with capacity increasing in lineitself from assembly-based partnerships to a fully-fledged industry with domestic demand. The number of vehicles per 1,000 persons, whichwith design capability and a massive production capacity. Matching was approximately 149 in 2011 (108 cars per 1,000 people), indicates theand surpassing international quality and safety standards, today’s strong potential of the sector.Turkish automotive industry is highly efficient and competitive withits value-added production. In addition to the professional associations and unions, such as the Automotive Manufacturers Association (OSD), the Association of AutomotiveThe sector’s export and R&D capacity is supported by high Distributors (ODD), the Association of Automotive Parts and Componentsproductivity levels, thanks to cooperation between the key Manufacturers (TAYSAD), the Union of Uludag Automotive Parts and thecomponents of the industry, with its subdivisions, positive Components Exporters Associations (UTAYSİB), research and promotioninteraction created in the joint university-industry projects and platforms, including the Automotive Technologies Research andadvanced logistics facilities. The Turkish automotive industry fully Development Center (OTAM), Automotive Industry Promotion Committeecomplies with EU environmental and technical standards, as well as (OETK) and Automotive Autorised Dealers (OYDER), actively guide the sector.other international legislations. A production capacity that easily International relations and the representation power of these institutionsmeets customer expectations is one of the industry’s strong points. contribute to the global strength of the Turkish automotive sector.Improving in a way that preserves its innovative and flexible Ambitious targets for the near future have been set for the Turkishstructure in the intensely competitive environment, the Turkish automotive industry, including achieving two million units in vehicleautomotive industry has elevated the country to a prestigious production, an export volume amounting to USD 50 billion, the realization ofglobal position, ranking 16th among automotive manufacturing various R&D and P&D operations worth billions of US dollars and thecountries in 2010, producing more than 1 million vehicles, while it formation of an "automotive production hub" that employs 600,000 workersis the largest commercial vehicle producer in Europe. Around 70 and manufactures globally recognized quality and value-added products.percent of the domestic production is being exported. Meanwhile,Prepared by 6/8
  7. 7. Turkey Automotive Market Report November 15th, 2012 European Passenger Car Market (2011) European Light Commercial Vehicle Market (2011) GERMANY 3.173.634 FRANCE 426.655 TURKEY 270.920 FRANCE 2.204.229 UNITED KINGDOM 260.153 UNITED KINGDOM 1.941.253 GERMANY 233.422 ITALY 1.748.143 ITALY 170.634 SPAIN 808.059 SPAIN 104.372 TURKEY 593.519 BELGIUM 61.428 NETHERLANDS 58.654 BELGIUM 572.211 SWEDEN 46.337 NETHERLANDS 556.123 POLAND 42.692 AUSTRIA 356.145 PORTUGAL 34.881 SWEDEN 304.984 AUSTRIA 32.531 POLAND 277.430 DENMARK 24.327 FINLAND 14.491 CZECH REPUBLIC 173.282 CZECH REPUBLIC 13.269 DENMARK 168.707 HUNGARY 11.433 PORTUGAL 153.433 IRELAND 11.346 FINLAND 126.123 ROMANIA 9.458 GREECE 97.682 SLOVENIA 6.482 IRELAND 89.896 GREECE 6.357 SLOVAKIA 5.735 ROMANIA 81.719 LUXEMBURG 3.423 SLOVAKIA 68.203 BULGARIA 2.927 SLOVENIA 58.417 ESTONIA 1.968 LUXEMBURG 49.881 LITHUANIA 1.824 HUNGARY 45.097 LATVIA 1.456 BULGARIA 19.136 ESTONIA 15.350 LITHUANIA 13.223 LATVIA 8.849Prepared by 7/8
  8. 8. Turkey Automotive Market Report November 15th, 2012 » Major players have been established in Turkey for 30-40 » Automotive market is mostly effected sector from negative economic years and have comparably stronger dealer net-works. developments. » 47 brands are competing in the passenger car market. » Diesel penetration of the passenger car market is 62%. » ~1000 exclusive dealers exist in the market. » Diesel market consumer demand is shifting to diesel A/T models. » Tough competition and decreasing profitability especially in » Sedan models preferred. the retail business will be changing the business » Consumer credit monthly rates of ~1% is convenient ground for car environment. (consolidation at dealer level, emergence of purchase. group dealers, increase in the appetite of importers » Operational fleet rental business will continue to expand. investing in the retail side. » 66% of households does not have a car (GfK) » BER (Block Exemption Regulation) is a strong corner stone. » Government applies high purchasing taxation policy. » Market driven by price, consumers incredibly price sensitive. Automotive Total Vehicle Park as of 2011: P.Car Truck Pick-up Minibus Bus Total » High potential but volatile unsaturated market with 8.113.111 728.458 2.611.104 389.435 219.906 12.062.014 postponed demand. 1000 900 800 700 600 500 400 864 762 817 300 695 717 607 622 594 557 200 507 477 436 494 361 379 364 100 263 271 258 267 304 192 161 0 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 Total Market (PC+LCV) x 1000Prepared by 8/8
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