Fleet Leasing Industry in Turkey

1. Operational leasing in Turkey
Extreme competition, stable growth.
İlkay ERSOY
Chairman / TOKKDER & CEO / DRD Fleet Leasing

2. TURKEY a LARGE
and
PROMISING COUNTRY

3. Gross
National
Product
Worlds 16’th & Europe’s 6’th Economy
Taiwan
Saudi Arabia
Iran
Australia
Turkey
Indonesia
Spain
Canada
Korea
Italy
Mexico
France
United Kingdom
Brazil
Russia
Germany
Japan
India
China
United States
Gross National Product – Purchasing Parity - World Bank / data.world.bank
Bulgaria
Slovak Republic
Ireland
Hungary
Denmark
Portugal
Greece
Norway
Romania
Czech Republic
Austria
Sweden
Belgium
Netherlands
Poland
Turkey
Spain
Italy
France
United Kingdom
Germany
16’th
1.2 Trillion
US Dollars
6’th

4. Sustained Growth
0.5
0.7
0.9
1.0
1.2
0.0
0.2
0.4
0.6
0.8
1.0
1.2
1.4
2002 2004 2007 2010 2013
GNP / Trillion USD
36
63
107
114
152
0
20
40
60
80
100
120
140
160
2002 2004 2007 2010 2013
Export / Billions USD
World Bank / data.world.bank & Turkish Statistical Institute / www.turkstat.gov.tr

5. Turkey – Large Country
Turkey’s forest area is 120K sq
km, which is;
As large as Bulgaria,
1.5 times Czech Republic
3.5 times Netherlands,
Total 780 K sq km land area is;
The largest in Europe,
1.4 times France
2.2 times Germany.
Edirne to Hakkari is 2.200 km
Number of cities more than 1M :
Large and equally crowded
22
with total 44M population
Number of cities more than
500K :
42
with total 60M population

6. Sixth economy,
Largest land area,
Biggest but youngest population,
Dynamic and sustained growth,
Risky? Maybe yes, maybe no.
Promising? Certainly

7. AUTOMOTIVE
INDUSTRY

8. Passenger Car Per 1000 people & population
605
531
491 482 482
0
10000000
20000000
30000000
40000000
50000000
60000000
70000000
80000000
90000000
0
100
200
300
400
500
600
700
World Bank / data.world.bank
605
531
491 482 482 470
437
367
231
203
110
0
10000000
20000000
30000000
40000000
50000000
60000000
70000000
80000000
90000000
0
100
200
300
400
500
600
700
605
531
491 482 482 470
437
367
231
203
110
0
10000000
20000000
30000000
40000000
50000000
60000000
70000000
80000000
90000000
0
100
200
300
400
500
600
700

9. Car Sales (thousends)
666
634
527
576
793
911
818
893
373 357
306
370
510
594
556
665
0
100
200
300
400
500
600
700
800
900
1000
2006 2007 2008 2009 2010 2011 2012 2013
Total Passenger
Monthly Automotive Report – Turkey Automotive Manufacturers Association / www.osd.org.tr

10. Taxation 1
• VAT 18% for resale and brand new car
• Special Consumption Tax on Car is function of
CC, (SCT + VAT effect MSRP - TRY)
<1600 CC 100 X 1.45 X 1.18 = 171.1
1600-2000 CC 100 X 1.90 X 1.18 = 224.2
>2000 CC 100 X 2.45 X 1.18 = 289.1

11. Taxation 2
• Motor Vehicle Tax is about life time of vehicle
and is also function of cc (Yearly - TRY)
• Corporate income tax 20%,
<1300cc 537
1301-1600 859
1601-1800 1.514
1801-2000 2.385
2001-2500 3.578
2501-3000 4.987
3001-3500 7.595
3501-4000 11.940
>4001 19.541

12. Sales Behavior of Automotive Industry
• Offers bulk sale and discount at the end of
quarters, that is all
• Unstable discount policy in year,
• Offers more discount rates for short term,
• Does not mind early terminations and resale
market,
• Lack of service quality to all kind of «fleet
customers»

13. OPERATIONAL LEASING
INDUSTRY

14. Operational Leasing / Supliers
Member of
TOKKDER (*)
Main
Suppliers
(*) - Participants of TOKKDER Market Survey
+
Additional
many
member and
non member
/ known and
unknown car
renting
companies
ALD
ARKAS
ARVAL
ATAKO
AUTOLAND
AVIS
BEYAZ
CENTRAL
DRD FLEET
FLEET CORP
GARANTİ FLEET
HEDEF
LEASEPLAN
PREMIUM
TAN OTO

15. Operational Leasing / Basics
>10.000 6
5.000-10.000 1
<5.000 8
Profile of Market Survey
Participants
Estimated number of
cars in operational
leasing market
207.000
Share in Corporate Car
Parc 12% - 15%
Market in 5 years > 500.000

16. Charactertics of Market
• Strong competition
based on pricing
• Full service operational
leasing, fleet
management, S&L Back,
• Undefinite «product and
service»
• Product is «car»
• Car is passenger car
• Strictly protective rules
on LCVs
• No regulation and no
limit for market entry
• Always new entries to
market
• Under strong FX risk
• Intensive technology
investments
• Large selection of
suppliers from
multinationals to
strong and extensive
locals,

17. Operational Leasing / Growth
117,517
142,036
170,031
207,221
0
50,000
100,000
150,000
200,000
250,000
2010 2011 2012 2013
Number of Vehicles
9,675
11,990
17,285
26,189
0
5,000
10,000
15,000
20,000
25,000
30,000
2010 2011 2012 2013
Number of Customers
11,1
7,3
21%
20%
22%
TOKKDER - Turkish Auto Leasing and Car Rental Association / www.tokkder.org

18. Car Parc / Brands
25.9%
18.1%
16.0%
12.4%
5.8% 4.9%
3.4% 2.7% 2.2%
8.5%
RENAULT VW FORD FIAT OPEL CITROEN AUDI PEUGEOT BMW OTHER
TOKKDER - Turkish Auto Leasing and Car Rental Association / www.tokkder.org

19. Car Parc / Fuel and Transmission
DIESEL,
92.2%
GASOLINE,
7.6%
OTHER,
0.2%
CAR PARC / FUEL TYPE
MANUAL,
70.3%
AUTOMATIC,
29.7%
CAR PARC / TRANSMISSON
TOKKDER - Turkish Auto Leasing and Car Rental Association / www.tokkder.org

20. Car Parc / Segments
31.7%
49.2%
12.9%
3.1% 3.1%
B C D E-F LCV
Symbol,
Fiesta etc
Focus,
Corolla,
Jetta etc
TOKKDER - Turkish Auto Leasing and Car Rental Association / www.tokkder.org
A4, 3.20,
Passat, C5
etc
A6, A8,
5.20,
Luxury
SUVs etc

21. Car Parc / Contracts
<18
Months,
8.4%
18-30
Months,
18.2%
30-42
Months,
61.0%
>43
Months,
12.4%
CAR PARC / CONTRACT MATURITY
EUR,
80.4%
USD,
5.2% TRY,
14.4%
CAR PARC / CONTRACT FX
TOKKDER - Turkish Auto Leasing and Car Rental Association / www.tokkder.org

22. TIPS
for
FLEET MANAGER

23. Who uses what? – Samples for Segments
CEO of Major Banks and
multinational companies
VP of Major Banks
multinational companies
Director, Coordinator and
Executives
Managers, Regional
Managers, Executives
Sales People
AUDI A8L, BMW 7 Series, Mercedes S
Class
Fully equipped AUDI A6, BMW 525,
Mercedes E Class
AUDI A4, BMW 3.20, C5, VW Passat,
Mercedes C Class
AUDI A4, BMW 320, VW Jetta, Corolla,
Focus,
Citroen C4, Fiat Liena, Citroen Elyse,
Clio Symbol, VW Polo
Selected Positions Sample Make and Models

24. Wise Fleet Manager in Turkey....
• Segmented milage for fleet. Calculate it for segments and positions.
• Turkey is large country, you do not need to have winter tires in most
cities. Try to estimate your winter tire needs. If you are wrong, it is
always possible to buy with good discounts,
• Winter tires for higher segment cars are extreemly expensive, be careful.
• Always question your supplier for service structure.
– Ask main service stations,
– Ask call-center structure,
– See sample fleet reports and ask online reporting, try
– Ask damage management and insurance system, fix insurance or based on
customer claim ratio?
– Ask to visit customer relations departments and some service stations,
– Is there internet service base?
– Is there IOS, Android, W8, BB based apps?

25. Wise Fleet Manager in Turkey....
• Do not focus just pricing, be sure supplier is understood
the service package and capable to ensure it,
• Check and force multinational as well as locals, never be
sure for your supplier’s service structure just because of
«the name»,
• Check if they have a control and audit system on their
third party suppliers,
• Check their ERP,
• Ask fair wear and tear conditions,
• Never forget Turkey is large country and your cars will be
thousends of kms far from you!,
• If your milage projections results high milages have an
optimization team with finance and sales departments,

26. Car is an asset
• Saving is important,
• And productivity is more important,
• In the end car is an asset, an equipment which
must create value,
• That value depends on your supplier,
• Delivery of cars is not the end, it is the begining,
• Force for KPIs to your supplier and understand if
«internal customer» is happy for your service,
– 80% of damages are under 500 USD,
– Repair time is under 1 day! Supplier do not provide a
courtesy car under one day,

27. Association is also for customers
• As a wise fleet manager, never forget
that TOKKDER is always ready to
assist!!!
Note www.tokkder.org

28. THANK YOU