BMI's Executive Summary

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The slump in the Turkish automotive market, with sales falling 12.3% in 2007 according to BMI estimates, is threatening future investment in the country's automotive industry. BMI estimates that automotive sales fell by an estimated 12.3% year-on-year (y-o-y) in 2007 to 587,442 units, despite Turkey's economic and political stability. Car loan interest rates are too high and are curbing consumer demand for cars; over 70% of sales in the Turkish automotive market are facilitated by loans. Sales taxes on cars are also high, although there are plans to harmonise them with European Union (EU) standards. Compounding the problem is the continuing depreciation of the lira, which is pushing up the price of imported vehicles (70% of the cars sold in Turkey are imported); total imports were down by around 15% in 2007.

The export-oriented automotive industry was largely unaffected by the downturn in domestic demand. BMI estimates that output exceeded 1mn units for the first time in 2007, with around 80% of production exported, mostly to the EU. Nevertheless, Turkish carmakers are voicing concerns that the downturn in the Turkish automotive market is harming future prospects of investment in production. While BMI forecasts a modest recovery in the market in 2008 with sales growing over the following four years, a return to 2006 sales levels is unlikely to be achieved until 2012. This recovery may be too slow for many autos majors. With the Russian market experiencing fast growth and set to rival Germany for the position of largest car market in Europe, Turkey will look like an increasingly unattractive prospect for investors. Turkey's position as a production hub with close proximity to the EU may become irrelevant as the bulk of European automotive sales growth shifts outside the EU. The macroeconomic environment is generally supportive of consumer demand, while the business environment is improving. For Turkish manufacturers to boost domestic sales, the market requires stimulating with low interest rates for car loans and a significant cut in sales and registration taxes. Turkey still has huge potential in the automotive sector.

Several manufacturers are recording strong growth. Ford Otosan's production was up by around 20% to over 220,000 units, helped by US$375mn of investment to boost capacity from 240,000 vehicles per annum to 280,000. Oyak Renault saw production rise by around 15% while Fiat's Turkish partner Turk Otomobil Fabrikasi (Tofas) increased production by around 13% to 120,000 units. The carmaker's output was bolstered by the introduction of its C segment sedan, the Linea, and the Minicargo model, developed with PSA Peugeot Citroen and Fiat. Meanwhile, Toyota produced 154,000 cars, an increase of just 0.5%. Output growth was fuelled by exports, with total vehicle exports up 16.6% y-o-y to an estimated 822,677 units in 2007. Exports comprised 74% of Turkish production, up from 61% in 2005, indicating the increasingly export-oriented nature of the Turkish automotive industry. Expansion in production capacity should lead to strong output growth over the forecast period. Despite the slowdown in growth, we still expect Turkish automotive output to reach over 1.6mn units by 2012, a 55% increase over 2007. Growth will be led by a 63% rise in car production, while commercial vehicle output will rise by 44%. Passenger-car production represented 56.3% of total automotive output in 2007, with pick-up production the second-largest segment, on 34.3% of output.

Contents

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Chapter 1 – SWOT Analysis

Turkey Autos Industry SWOT

Turkey Economic SWOT

Turkey Business Environment SWOT

Chapter 2 – Middle East and Africa Overview

Table: Middle East and Africa Autos Production – Historical Data & Forecasts (CBUs unless otherwise stated)

Table: Middle East and Africa Autos Sales – Historical Data & Forecasts (CBUs unless otherwise stated)

Suppliers

Table: Africa Autos Sales 2005 by Segment

Table: Middle East Autos Sales 2005 by Segment

Chapter 3 – Business Environment Rankings

Economics – Long-term Risk

Politics – Long-term Risk

CBU Output Growth

Vehicle Ownership/Penetration Potential

Regulation

Competitive Environment

Chapter 4 – Industry Forecast Scenario

Production and Sales

Table: Turkey Automobile Sector – Historical Data & Forecasts (CBUs, unless otherwise specified)*

Trade

Table: Turkey Automobile Sector – Historical Data & Forecasts (CBUs, unless otherwise specified)

Table: Top Five Automotive Exporters, 2005

Chapter 5 – Macroeconomic Forecast

Table: Economic Indicators

Country Snapshot: Turkey Demographic Data

Section 1: Population:

Table: Demographic Indicators (2005)

Table: Rural/Urban Breakdown

Section 2: Education & Healthcare

Table: Education

Table: Healthcare: Vital Statistics

Table: Healthcare: Expenditure

Section 3: Labour Market and Spending Power

Table: Employment Indicators

Table: Consumption and Stratification

Chapter 6 – Special Focus: Commercial Vehicles

Regional Market Overview

Table: Regional Commercial Vehicle Market: Country Ranking – Sales

Table: Regional Commercial Vehicle Market: Country Ranking – Production

Table: Regional Commercial Vehicle Market: Company Ranking of Significant Regional Manufacturers

Table: Recent and Planned Investments in the Middle East and Africa

Turkey Commercial Vehicles Sector

Sales

Table: Size of Commercial Vehicle Market

Table: Commercial Vehicle Sales Forecast

Production

Table: Production in Turkey

Table: Turkish Light Commercial Vehicle Production (CBUs), Top Five Manufacturers, 2005*

Table: Turkish Heavy Commercial Vehicle Production (CBUs), Manufacturers, 2005*

Table: Turkish Bus Production (CBUs), Top Five Manufacturers, 2005*

Table: Production Forecasts for Turkey

Chapter 7 – Competitive Landscape

Market Overview

Table: Turkey Production – Jan-Aug 2006

Table: Key Players – Passenger Car Importers*

Table: Automotive Exports by Manufacturer

Table: Turkey Top 10 models – Jan-Aug 2006

Suppliers

Chapter 8 – Company Monitor

Regional Case Study: Ford

Sales

Table: Ford dealers in Middle East and Africa

Production

Table: Ford assembly plants in the Middle East and Africa

Company Profiles

Oyak Renault

Tofas

Toyota

Ford Otosan

Hyundai Assan

BMI Forecast Modelling

Automobile Industry

Sources

Appendix: Regional Demographic Data

Table: The Long View: Data Over The Economic Cycle (2000-2007)

Population

Table: Household Spending Per Capita, US$

Table: Private Consumption Per Capita, US$ PPP

Table: Market Size, GDP, US$bn

Competitive Landscape for Middle East & Africa Automotives: Sample of  
Companies Ranked

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Rankings and Competitive Landscapes by production and sales; market share and change on previous year; number of employees, ownership structure and year established. Also includes analysis of company expansion, export and investment strategies.

Network of Middle Eastern & African Automotive Sources

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BMI's Middle East & Africa Automotives Reports are based on an extensive network of multilateral organisations, government departments, automotive industry associations, chambers of commerce and company reports. Information sources include:

BMI's Affiliates and Partners in the Middle East and Africa

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