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The Automotive Industry in Turkey
Prof. Dr. Ercan TEZER / OSD General Secretary
Otomotiv Sanayii Derneği - OSDAutomotive Manufacturers Association
l Founded in 1974l Main Objectives Are:
ü To Represent MV Sector In Public Authorities, Local and International Organisations
ü To Gather and Publish Various Information on MVI of Turkey
ü To Organize & Conduct Joint Actions in Different Fields
l Is an Active Member of:l OICA l ACEA Liaison Committeel ODETTE l GAID Groupl TAAM
l OSD is a Partner ofl ACEA / EUCAR, EU ERTRAC and EU Motor Vehicle Technical Committeel UN / WP 29
l All Relevant Information is Found in OSD Web-Site:
Automotive Industry
} Global(73 Mio Production / 66 Countries)
} Intensive(10 Companies / % 90 Production)
} Multiple Effects(Value Added / Revenue / Jobs)
} High Competition / Costumer Expectation(Better Safety / Higher Comfort / Rock Bottom Price)
} Product Differentiation(P.Cars-Status / CV-Investment)
} Globally Under Heavy Legislation(Emission / Safety / Climate Change)
} Innovation Oriented
MVI in World – 2007 (x 1.000)
11.59610.781
8.8826.213
4.0863.0192.9712.890
2.5782.350
2.0951.750
1.6601.2841.238
1.099997939
844785
1) JAPAN2) USA
3) CHINA4) GERMANY
5) S.KORE6) FRANCE8) BRAZIL
7) SPAIN9) CANADA
10) INDIA11) MEXICO
12) ENGLAND13) RUSSIA
14) ITALY15) TAILAND16) TURKEY
17) İRAN18) CZECH…
19) BELGIUM20) POLAND
Ranking in EU (27)
Total 6
Buses 1LCV 2H.Trucks 6P.Cars 9
Production 1.300.000Capacity 1.500.000Exports 950.000Market 675.000
2008
World Total Production – 2005/2020(1
.000
Uni
ts)
0
20.000
40.000
60.000
80.000
100.000
120.000
2005 2020
HCV LCV P.Cars
66.700
103.900
Change46%
Increase in Total Production By Regions2005/2020
4,253,28
2,312,21
1,781,56
1,161,111,11
1,031,56
0 1 2 3 4 5
PRC
India
Asia/Pasific
E.Europe
Others
Mercosur
Korea
EU
N.America
Japan
World Total
2020 / 2005
Production Moves From West To East & North To South
X 2,27 Increasein 2012
For 2 MillionProduction
Milestones of Turkish Economy
CLOSEDECONOMY
FREEMARKET
ECONOMY
1980
EU/TR CUSTOMSUNION1996 *
WTOMEMBERSHIP
1995 *
FREECIRCULATION
OF CAPITAL1989
EU FULL MEMBERSHIPPERSPECTIVE
2002
EU ACCESSIONNEGOTIATIONS
DECISION
2005 ANDBEYOND
Changing Political and Business Habits
Towards a New Turkey
Political UncertaintyResulting In
Business Indecision
Turkey Keeps up With Recent GlobalEconomic Trends in the Region
l Longest Practice of Global Market Economyl Emerging Economy Applying the International Rules of Free
Trade Such as Competition Law, Property Rights And Etc.l Liberalized International Capital Movementsl Up to Date Infrastructure for Commercial and Financial
Activities, Telecommunication and Transportationl Competitive Industrial Products for the World Market
Long Term Relation With EU Within The AssociationAgreement Dated 1963
Candidate Country in Negotiation Process For EUMembership
Customs Union/1996 and MVI
Customs Union Was Realized Between Turkey and EU ForThe Free Circulations of Industrial Goods
l New and More Competitive Conditions in the Marketl Better Incentives for the Industry Towards More
Competitiveness to be a Global Playerl More Close Integration of MVI's Between Turkey and EUl More Share in the MVI Market for EU Industry
CU Implementation
l For the Free Movement of Industrial Goods Tariffs and Non-Tariff Measures Were Wholly Abolished
l Turkey Implemented CCT and CTP for Non-EU Countries
l In order to Realize in Full Free Movement of Goods,Adaptation of Series Technical and CommercialLegislations Were Realized Such As:
o All Relevant MVI Technical Directives
o Competition Rules / Block Exemption Legislation in MVI
Development of MVI in Turkey: 1960 / 2012
1960-1970
1970-1980
1980-1990
1990-1995
1995-2000
2000-2012
License
Localization
Modernization
Up-to-dateModel
TransitionPeriod
Free MarketFree Market
GlobalGlobalCompetitionCompetition
ProtectedMarket
Assembly
Development ofComponent ınd.
Increase inCapacity
Up-to-dateModel Export
Full integrationManufacturing Base
Research & Development, Design &Technology Management,Intellectual & Industrial Property
TARGET FOR 2012 : CENTER of EXCELLENCE
MV Manufacturers in Turkey
Izmir
Adapazarıı
Ankara
Istanbul
Gölcük
Aksaray
Izmit
Bursa
Eskişehir
Adana
85 % ofComponents
Manufacturers
Motor Vehicle Manufacturers (2008)
TOFAŞ/FIAT JV FIAT 400.000O.RENAULT JV RENAULT 360.000TOYOTA FDI TOYOTA 150.000HYUNDAI ASSAN JV HYUNDAI 100.000HONDA FDI HONDA 50.000
1.060.000FORD OTOSAN JV FORD 350.000HYUNDAI ASSAN JV HYUNDAI 25.000KARSAN Local PEUGEOT 25.000B.M.C. Local Local 20.000M.BENZ TÜRK JV M.BENZ 20.000ANADOLU ISUZU JV ISUZU 13.000TEMSA Local Local 14.000OTOKAR Local LAND ROVER 8.000M.A.N. FDI MAN 5.000
480.0001.540.000
CapacityVehicle/Year
CV
Ownership
TotalCV Total
P.Cars
Companies Partner
P.Cars Total
Product
MVI Integration
Number of Manufacturers 14Link With Non-EU 5 (26 % of 2007 production)
* JV 4* License 1
Link With EU 7 (72 % of 2007 production)* JV 6* License 1
Local 2 (2 % of 2007 production)
Link With EU ManufacturersFiat Group JV
Ford JV
MAN FDI
M. Benz JV
Renault JV
Rover Group L
Peugeot L
Link With Non-EU ManufacturersIsuzu JV
Toyota FDI
Mitsubishi L
Honda FDI
Hyundai JV
Automotive Component Industry In Turkey
l Around 1.000 Component Suppliers: 350 Of Them Are Global Supplier
l International Accreditation:Quality – ISO 16949, Environment - ISO 14001
l Well Trained Work Force: Around 250.000
l Cost Advantage: High Productivity and Relatively Less Labor Wage
l Significant Experience In Their Field
l Able To Meet Global Standards
l Able To Compete In Global Markets
l Experience In Export Activities
History of the Production (x 1.000)
0
200
400
600
800
1.000
1.2001
96
31
96
41
96
51
96
61
96
71
96
81
96
91
97
01
97
11
97
21
97
31
97
41
97
51
97
61
97
71
97
81
97
91
98
01
98
11
98
21
98
31
98
41
98
51
98
61
98
71
98
81
98
91
99
01
99
11
99
21
99
31
99
41
99
51
99
61
99
71
99
81
99
92
00
02
00
12
00
22
00
32
00
42
00
52
00
62
00
7
Passenger Cars Total
11047
421348
431297
1.100
3 243213
271175
High Fluctuations In the Past Have Had A Particularly Negative Effect On TheDevelopment And Competitiveness Of The Industry
Total Production:3,000 in 1963
1,100,000 in 2007
Changes in Last 6 Years (x 1.000)
347
534
823 879988
1.100
0
200
400
600
800
1.000
1.200
1.400
2002 2003 2004 2005 2006 2007
262359
519 561
706
830
0
200
400
600
800
1.000
2002 2003 2004 2005 2006 2007
175
401
746 763670 640
0
200
400
600
800
1.000
2002 2003 2004 2005 2006 2007
4.3446.518
10.02011.540
14.560
20.500
0
5.000
10.000
15.000
20.000
25.000
2002 2003 2004 2005 2006 2007
Production
Total Market Exports / Million $
Exports
X 3.17 X 3.17
X 4.72X 3.65
Exports Share in Total Production is Over 75%
3 2 512 13
8 9
7164 62 62
717573
22
30
0
200
400
600
800
1.000
1.200
1.400
1.600
0
10
20
30
40
50
60
70
80
90
100
Exports 10 8 15 37 42 31 37 91 104 202 262 359 508 552 697 820
Production 345 453 269 326 329 400 405 326 468 286 357 562 823 879 988 1.100
Exports (%) 3 2 5 12 13 8 9 30 22 71 73 64 62 62 71 75
1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007
Rate of Exports inProduction
Total Production 75%P. Cars 80%
%
The Automotive Market is an Unsaturated One
604510 493
391 343 361
144 138
0
200
400
600
800G
erm
any
Gre
ece
Spai
n
Pola
nd
Hun
gary
Bul
garia
WO
RLD
Turk
ey
SMMT / Vehicle/1.000 Inhabitants in 2006
Approximately 15 million vehicles are to be sold in Turkeyto reach to the level of Bulgaria in 10 years
(whose GDP per capita are rather similar)
The Assets & Potential of MVI of Turkey
} Automotive Culture 50 years of production tradition} High Sense of Quality TQM, Lean Production, 6 Sigma} Labor Peace Unionized work force / collective bargaining since 1963} Qualified, Well-Educated, Motivated Labor Force at Competitive Cost} Flexible Working Hours 7.5 hours / shift - 3 shifts / day - 6 days / week;
Rate of Absenteeism < 1.5 %} Entrepreneurship $ 15 billion worth of Investment} Partnership With World-Leading Manufacturers} Experienced Local Component Industry / Supplier Base} Unsaturated Domestic Market With High Potential of Demand} More Incentives on R & D and New Investments} Developed Infrastructure & Services in the Region
Logistics, Energy, Transport, Banking, Communication} Manufacturing Facilities With State-of-the-Art Technology
Prospects of the Turkish Automotive Industry
} In The Short TermProduction: Over 1,0 MillionExports: Over 0,8 Million Already Realized
} In The Medium TermProduction: 2,0 MillionExports: 1,5 Million Can be Achieved
Which Corresponds To An Employment Of 600,000 PersonsAnd Exports Of $ 50 Billion
This Requires An Additional Investment Of At Least $ 5 Billion
The Strategy and Action Plan
} Optimizing Capacity Utilization} Increasing The Size Of The Domestic Market} Continuation Of Exports
} Increasing The Competitiveness} Cost Reduction By Means Of Productivity Improvements} Encouraging More Innovation In The Industry} Better Supply Chain Management
} Developing Vehicle And Component Industries Concurrently} Establishing And Building On Strategic Partnerships} Effective Cooperation On “Pre-competitive” Level
Recent Developments on R&D Activities
l A New Incentive Scheme is Now Covering R&D Activities in Companies tobe Effective This Year Such As:
ü 100 % Deduction of R&D Expenses From Corporate Tax Came intoOperation in 2008
ü Tax and Social Security Funds Payment Exemption for These Working inR&D Activities
l Government Assigned Yearly $ 300 Million to TUBİTAK in Order to SupportR&D Activities and Targeted to Increase R&D Expenses up to 2 % ofGNDP in 5 Years
l Automotive Technology and R&D Center – OTAM(*) was Established inIstanbul Technical University-ITU with $ 12 Million to Start off
l TUBİTAK-MAM is Providing Large Scale of Basic Services for R&D
(*) OSD, ITU (Istanbul Technical University) , TAYSAD (Assoc. of Component Manufacturers),UIB (Union of Vehicle & Component Exporters) are the Partners of OTAM
Offices
(1445 m2) VehicleLaboratory (1640
m2)
IC EnginesLaboratory (1640
m2)
l OTAM was Established by (OSD), The Scientific and Technical Research Council ofTurkey (TÜBİTAK) and Istanbul Technical University (İTÜ) in 2004
l OTAM is Formed as an A&D Company in 2007 to carry out of R&D and TypeApproval Tests in Cooperation with ITU
l OTAM is Mainly Specialized in the Areas of Engine, Emission, Vibration, Noise andChassis / Body Analysis
Automotive Technology / R&D Center OTAM
Seat Crash Test System
IST Instron Hydropuls
Current International Trophies● Ford OTOSAN, Among European Ford Factories, Has Been Selected As The Best Motor Vehicle Manufacturer In The Last
Five Years.● Toyota Factory In AdapazarıWas Selected The Best Worldwide Toyota Manufacturing Plant In 2006.
Ford Connect“VAN of the year” in 2003Production: İzmit
FIAT Doblo“VAN of the year” in 2006Production: Bursa
Renault Clio III“Car of the year” in 2006Production: Bursa
Ford Transit“ VAN of the year” in 2007Production: Kocaeli
FIAT LINEA“Autobest 2008”Production: Bursa
TEMSA DIAMOND“Busbuilder of the year 2007”Production: Adana
FIAT FIORINO“Van of the year” in 2009Production: Bursa
TURKEY IS A CENTER OFTURKEY IS A CENTER OF
GLOBAL AUTOMOTIVE PRODUCTIONGLOBAL AUTOMOTIVE PRODUCTION
AndAnd
IS TO BE A “CENTER of EXCELLENCE”IS TO BE A “CENTER of EXCELLENCE”
TEMSATEMSAIS A BUS PRODUCERIS A BUS PRODUCER
