The Automotive Industry in Turkey 2008 and Beyond by whereitsat

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									    The Automotive Industry in Turkey
           2008 and Beyond?




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    Prof. Dr. Ercan TEZER / OSD General Secretary
Otomotiv Sanayii Derneği - OSD
Automotive Manufacturers Association

   Founded in 1974
   Main Objectives Are:
         To Represent MV Sector In Public Authorities, Local and International Organizations
         To Gather and Publish Various Information on MVI of Turkey
         To Organize & Conduct Joint Actions in Different Fields
   OSD is an Active Member of:
         OICA
         ACEA Liaison Committee
         ODETTE
         GAID Group
         TAAM
   OSD is a Partner of
         ACEA / EUCAR, ERTRAC and EARPA
         UN / WP29 and EU Motor Vehicle Technical Committee
   All Relevant Information is Found in OSD Web-site: www.osd.org.tr
Milestones of Turkish Economy

                                                                         EU ACCESSION
                                                                         NEGOTIATIONS
                                                                           DECISION
                              FREE
                           CIRCULATION            EU/TR CUSTOMS
                            OF CAPITAL                UNION
                              1989                    1996 *
 CLOSED                                                                   2005 AND
ECONOMY                                                                   BEYOND
                    1980                 1995 *                 2002
                  FREE                  WTO            EU FULL MEMBERSHIP
                 MARKET              MEMBERSHIP            PERSPECTIVE
                ECONOMY




 Political Uncertainty
                                                   Changing Political and Business Habits
     Resulting In
 Business Indecision                                Towards a New Turkey
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
Automotive Industry is a Complex Process


  “Supply Chain” is From Raw Material to Motor Vehicle For End User



 Raw Material    Parts & Components        Motor Vehicle           End User

                        @ 5.000            Manufactured to Meet Demands of:
                     Group of Parts
    @ 10
                   Manufactured By         •   Max. Performance
   Different                               •
                • Different Companies          Highest Safety
   Material                                •
                • Different Materials          Excellent Comfort
                • Different Technologies   •   Lowest Price

                  The Complex “Supply Chain” Runs On
     Corporate Management of Cost / Quality / Logistics
                        in Highly Competitive Market
Global Delocalization
"To be Manufacturer in Potential Markets and Enjoy With Low Operational Cost"



                                                    1970
                                                                   Japan
             USA              1950                  1980



  1960


                       1980             Europe          1990          Korea

   S.America
      And
     Others            1970
                                                      PRC
MVI in World – 2007                   (x 1.000)




              1) JAPONYA                                                              11,596
                  2) ABD                                                          10,781
                   3) ÇHC                                            8,882
             4) ALMANYA                                   6,213
               5) G.KORE                          4,086           Ranking in EU (27)
               6) FRANSA                  3,019
              7) İSPANYA                 2,890                    Total       6
             8) BREZİLYA                 2,971
              9) KANADA                2,578                      Buses      1
            10) HİNDİSTAN            2,350                        LCV        2
              11)MEKSİKA            2,095                         H.Trucks   6
            12) İNGİLTERE         1,750                           P.Cars     9
               13) RUSYA         1,660
               14) İTALYA      1,284
             15) TAYLAND       1,238                                         2008
              16) TÜRKİYE     1,099
                 17) İRAN
                                                                  Production 1.300.000
                             997
     18) ÇEK CUMHURİYETİ.    939                                  Capacity   1.500.000
              19)BELÇİKA    844                                   Exports      950.000
             20) POLONYA    785                                   Market       675.000
 World Total Production – 2005/2020



                120,000
                                                           103.900
                100,000   HCV      LCV   P.Cars
(1.000 Units)




                 80,000
                                66.700
                 60,000                           Change
                                                   46%
                 40,000

                 20,000

                     0
                                  2005                      2020
Increase in Total Production By Regions
2005/2020

   World Total                       1.56
        Japan               1.03
    N.America                1.11
            EU               1.11                                 X 2,27 Increase
        Korea                 1.16                                    in 2012
     Mercosur                        1.56                          For 2 Million
        Others                          1.78                        Production
     E.Europe                                     2.21
   Asia/Pasific                                    2.31
          India                                                   3.28
          PRC                                                                4.25

                  0     1                   2                 3          4          5
                                                2020 / 2005


           Production Moves From West To East & North To South
 Production BRIC Countries 2005/2020



                40.000

                35.000   Russia      Brazil   PRC       India

                30.000
(1.000 Units)




                25.000

                20.000

                15.000                                  Change
                10.000                                   X 3.29
                 5.000

                    0
                                    2005                                 2020

                                                 2005        2020    2020/2005
                         Russia                 1.407        3.347     2,38
                         Brazil                 2.350        3.588     1,53
                         PRC                    5.696       24.204     4,25
                         India                  1.679        5.500     3,28
                         Total / BRIC          11.132       36.639     3,29
                         Total / World         66.740      103.932     1,56
Customs Union/1996 and MVI



  Customs Union Was Realized Between Turkey and EU For
        The Free Circulations of Industrial Goods

 New and More Competitive Conditions in the Market
 Better Incentives for the Industry Towards More
  Competitiveness to be a Global Player
 More Close Integration of MVI's Between Turkey and EU
 More Share in the MVI Market for EU Industry
CU Implementation



 For the Free Movement of Industrial Goods Tariffs and Non-
  Tariff Measures Were Wholly Abolished
 Turkey Implemented CCT and CTP for Non-EU Countries
 In order to Realize in Full Free Movement of Goods,
  Adaptation of Series Technical and Commercial
  Legislations Were Realized Such As:
      o   All Relevant MVI Technical Directives
      o   Competition Rules / Block Exemption Legislation in MVI
Automotive Foreign Trade

                   8.000
                                                     7.017
                   7.000       Imports
                   6.000       Exports
Turkey / Germany                                     2.925
                   5.000       Total

                   4.000
                                             2.833
                   3.000
                            1.743            764
                   2.000                             4.092
                            214
                   1.000
                            1.529            2.069
                       0
                            1996             2000     2007


                   35.000
                                                     29.081
                   30.000          Exports
Turkey / EU        25.000          Imports
                                   Total             15.270
                   20.000

                   15.000
                                             9.715
                   10.000
                            4.114            2.156   13.811
                    5.000
                             693             6.559
                            3.421
                       0
                            1996             2000     2007
Development of MVI in Turkey: 1960/2010


   1960-1970          Assembly            License
                                                                                            Protected
                                                                                             Market
        1970-1980        Development of             Localization
                         Component ınd.

                                     Increase in
                    1980-1990                             Modernization
                                      Capacity                                              Transition
                                                                                              Period
                                           Up-to-date                Up-to-date
                         1990-1995                                     Model
                                          Model Export


    Free Market                                         Full integration
                                 1995-2000
                                                      Manufacturing Base

     Global                                                        Research & Development, Design &
                                                   2000-2012       Technology Management,
   Competition
                                                                   Intellectual & Industrial Property

               TARGET FOR 2012 : CENTER of EXCELLENCE
MV Manufacturers in Turkey

   85 % of
 Components
 Manufacturers




                 Istanbul

                                 Izmit         ı
                                         Adapazarı
                            Gölcük
                              Bursa
                                               Ankara
                                   Eskişehir
                  Izmir
                                                     Aksaray
                                                      Adana
Motor Vehicle Manufacturers (2008)

                                                         Capacity
          Companies     Ownership   Partner   Product
                                                        Vehicle/Year
        TOFAŞ         JV         FIAT                        400.000
        O.RENAULT     JV         RENAULT                     360.000
        TOYOTA        FDI        TOYOTA     P.Cars           150.000
        HYUNDAI ASSAN JV         HYUNDAI                     100.000
        HONDA         FDI        HONDA                        50.000
                        P.Cars Total                       1.060.000
        FORD OTOSAN JV           FORD                        295.000
        HYUNDAI ASSAN JV         HYUNDAI                      25.000
        KARSAN        Local      PEUGEOT                      25.000
        B.M.C.        Local      Local                        22.000
        OTOYOL        JV         IVECO                        18.000
        M.BENZ TÜRK   JV         M.BENZ       CV              13.000
        ANADOLU ISUZU JV         ISUZU                        13.000
        TEMSA         Local      Local                        11.000
        ASKAM         Local      Local                         9.000
        OTOKAR        Local      LAND ROVER                    8.000
        M.A.N.        FDI        MAN                           4.000
                          CV Total                           443.000
                            Total                         1.503.000
MVI Integration


                Number of Manufacturers                      15
Link With Non-EU              5 (26 % of 2007 production)
  * JV              4
  * License         1
Link With EU                  7 (72 % of 2006 production)
  * JV              6
  * License         1

Local                         3 (2 % of 2006 production)

 Link With EU Manufacturers              Link With Non-EU Manufacturers
 Fiat Group         JV                   Isuzu              JV
 Ford               JV                   Toyota             FDI
 MAN                FDI                  Mitsubishi         L
 M. Benz            JV                   Honda              FDI
 Renault            JV                   Hyundai            JV
 Rover Group        L                    Hino               L
 Peugeot            L
Automotive Component Industry In Turkey


  Around    1.000 Component Suppliers: 350 Of Them Are Global Supplier
    International Accreditation:
     Quality – ISO 16949, Environment - ISO 14001
    Well Trained Work Force: Around 250.000

    Cost Advantage: High Productivity and Relatively Less Labor Wage

    Significant Experience In Their Field

  Able   To Meet Global Standards

  Able   To Compete In Global Markets

    Experience In Export Activities
History of the Production (x 1.000)


      1,200
                                                                  1.100
      1,000          Passenger Cars     Total


       800
                  Total Production:
       600                  3,000       in 1963    421      431
                        1,100,000       in 2007    348      297
       400
                                  110
       200
                                   47
                                                     243           271
              3
                                                     213           175
         0
              1974




              1997
              1963
              1964
              1965
              1966
              1967
              1968
              1969
              1970
              1971
              1972
              1973

              1975
              1976
              1977
              1978
              1979
              1980
              1981
              1982
              1983
              1984
              1985
              1986
              1987
              1988
              1989
              1990
              1991
              1992
              1993
              1994
              1995
              1996

              1998
              1999
              2000
              2001
              2002
              2003
              2004
              2005
              2006
              2007
 High Fluctuations In the Past Have Had A Particularly Negative Effect On The
             Development And Competitiveness Of The Industry
Changes in Last 6 Years (x 1.000)

                                                        1.000
     1.400
                                                                                                             830
     1.200
              Production                        1.100    800
                                                                 Exports
                                                                                                    706
                                         988
     1.000                        879
                           823                           600                               561
                                                                                 519
      800
      600           534                                  400             359

      400
      200
             347
                                  X 3.17                 200
                                                                 262
                                                                                           X 3.17
        0                                                  0
             2002   2003   2004   2005   2006   2007             2002    2003    2004     2005     2006      2007
     1.000                                              25.000
              Total Market
                      746         763                              Exports / Million $                      20.500
      800                                               20.000
                                         670    640
      600                                                                                          14.560
                                                        15.000
                                                                                          11.540
                    401                                                          10.020
      400                                               10.000
                                                                         6.518
      200
             175
                                  X 3.65                 5.000
                                                                 4.344                     X 4.72
        0                                                   0
             2002   2003   2004   2005   2006   2007             2002    2003    2004     2005     2006     2007
Exports Share in Total Production is Over 75%


     1.600                                                                                                                         100

                                Rate of Exports in                                                                  %              90
     1.400
                                       Production                                       73                                 75      80
     1.200                                                                       71                                 71
                         Total Production             75%                                      64     62     62                    70
     1.000
                         P. Cars                      80%                                                                          60

        800                                                                                                                        50

        600
                                                                   30                                                              40
                                                                          22                                                       30
        400
                                       12     13                                                                                   20
                                                      8      9
        200                      5
                   3      2                                                                                                        10

              0   1992   1993   1994   1995   1996   1997   1998   1999   2000   2001   2002   2003   2004   2005   2006   2007
                                                                                                                                   0
    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
The Automative Market is an Unsaturated One




      800
            604                        SMMT / Vehicle/1.000 Inhabitants in 2006
      600             510      493
                                       391      343       361
      400

      200                                                            144     138

        0




                                                                     WORLD
                               Spain




                                       Poland




                                                Hungary
                      Greece
            Germany




                                                          Bulgaria




                                                                             Turkey
      Approximately 15 million vehicles are to be sold in Turkey
            to 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                   $ 10 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 Term
         Production: Over 1,0 Million
         Exports:    Over 0,8 Million   Already Realized

    In The Medium Term
         Production:    2,0 Million
         Exports:       1,5 Million Can be Achieved


       Which Corresponds To An Employment Of 500,000 Persons
                     And Exports Of $ 40 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
     Thank You For Your Interest.




Internet: http://www.osd.org.tr / e-mail: osd@osd.org.tr

								
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