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Monthly automotive aftermarket magazine

June 2019


Monthly automotive aftermarket magazine

GROUP CHAIRMAN

H. FERRUH ISIK

PUBLISHER:

İstmag Magazin Gazetecilik

İç ve Dış Ticaret Ltd. Şti.

General Manager

(Responsible)

Mehmet Söztutan

mehmet.soztutan@img.com.tr

Mehmet Soztutan, Editor-in-Chief

mehmet.soztutan@img.com.tr

Editor

Ayça Sarıoğlu

ayca.sarioglu@img.com.tr

Advertising Manager

Adem Saçın

adem.sacin@img.com.tr

Gsm: 0505 577 36 42

Reklam Danışmanı

Ahmet D. Gölbaşı

aderya@gmail.com

Foreign Relations Manager

Yusuf Okcu

yusuf.okcu@img.com.tr

Consultant Editor

Leniiara Agliullina

We are at Automechanika

Dubai 2019

Turkish automotive industry, with its vehicles and components manufacturing subsectors,

is one of the major driving forces behind the Turkish economy. As noted

earlier in this column, the autoparts industry of Turkey has developed rapidly

as a consequence of developments in the automotive industry. The autoparts

industry with its large capacity, wide variety of production and high standards, supports

automotive industry production and the vehicles in Turkey and also has ample potential

for exports. Business people operating in the industry have become outward oriented

more than ever before.

These companies not only dominate the primary supply markets but also capture

an increasing share of the replacement market. Their continued success in exports

markets depend on close technical links with part makers in industrialised countries

and the willingness of their foreign partners to integrate their Turkish counterparts into

their production-distribution networks as regular suppliers of high quality, low-cost

components.

Turkey's autoparts industry exports are increasing steadily year by year. Turkey is the only

country within the surrounding geographical area to have established a well advanced

automotive industry.

Therefore, the automotive industry is strategically important both for Turkey and for firms

that will invest in Turkey. We think that technology will always be the key for the survival

of the automotive industry. History says so.

This month, we participate in Automechanika Dubai 2019 to convey the message of the

Turkish automotive and auto spare part exporters. The stars of the automotive world will

be meeting at Automechanika Dubai as usual.

Automechanika Dubai, showcasing the latest global trends, has turned out to be a

remarkable automotive aftermarket platform for the Middle East and Africa. The Fair

which covers the full range of automobile, truck and bus parts, equipment, components,

accessories, tools, and services continues to bring world renowned manufacturers,

suppliers and service providers in touch with one of the most important growing markets

in the world. The markets targeted by the Fair are widely recognised as the most attractive

in the world in terms of future potential.

Our publications remain at the service of those business people seeking to increase their

share in the increasingly competitive automotive markets.

We wish lucrative business for all participants.

Correspondent

İsmail Çakır

ismail.cakir@img.com.tr

Graphics & Printing Manager

Tayfun Aydın

tayfun.aydin@img.com.tr

Design & Graphics

sami.aktas@img.com.tr

Chief Accountant

Zekai Turasan

zturasan@img.com.tr

Finance Manager

Mustafa Aktas

mustafa.aktas@img.com.tr

Subsciption

İsmail Özçelik

ismail.ozcelik@img.com.tr

HEAD OFFICE:

Evren Mahallesi Bahar Caddesi Polat İş Merkezi

B Blok No:1 Kat: 4 Güneşli - Bağcılar/ İstanbul

Tel: (90.212) 604 51 00

Fax: (90.212) 604 51 35

www.img.com.tr turkey@ihlas.net.tr

KONYA:

Metin Demir

Hazım Uluşahin İş Merkezi C Blok

Kat: 6 No: 603-604-605 KONYA

Tel: (90.332)238 10 71 Fax: (90.332)238 01 74

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Tel: 0212 454 30 00

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Please mention

Automotive Exports

when writing to advertisers


Feel the pulse of the market and stay

ahead of the competition!

Automechanika Dubai 2019-The leading international trade show for the

automotive aftermarket and service industry in the MEA region

As the leading international automotive

aftermarket trade show in the Middle

East, Automechanika Dubai 2019 acts

as the central trading link for markets

that are difficult to reach connecting

the wider Middle East, Africa, Asia and

key CIS countries.

Over 1,800 exhibitors from around 60

exhibiting countries will showcase

the entire spectrum of the automotive

aftermarket across 6 product sections

- parts & components, electronics &

systems, repair & maintenance, tires

& batteries, accessories & customizing

and car wash, care & reconditioning.

In 2019, Automechanika Dubai will

introduce new product highlights –

Body & Paint and Oils & Lubricants,

as well as special features at the show

with exhibitors catering to agricultural

parts and equipment, motorcycle

competence and truck competence,

including key industry experts and

stay up-to-date on the industry

trends by connecting and learning at

Automechanika Academy.

Dubai proved to be the ideal platform in

the region for trade and the sharing of

expertise between professionals

from across the globe.

Last year, the event welcomed 1,801

exhibitors from 61 countries, who were

able to interact and engage with 31,971

visitors from 146 countries.

This strategically located trade hub

delivers the best business advantages

as follows:

Meet over 1,800 exhibitors across 13

halls showcasing diverse range of

products, equipment and services

Review products and pricing options

from over 60 exhibiting countries and

more than 20 country pavilions

Negotiate partnerships with key

manufacturers including exclusive

distribution rights in key markets

Discover product innovations and be

prepared for future market demand

Feel the pulse of the market and stay

ahead of the competition

Visiting Automechanika Dubai opens

up a world of possibilities that you

wouldn’t find anywhere else. Meet,

connect and source from over 1,800

exhibitors under one roof.

June 2019

6


NSK Group’s traditional iftar held once more

The traditional NSK Group’s iftar was

held in Bursa-Karacabey and Istanbul

with a considerable participation. At

the beginning of the iftar programs,

employees were given seniority

incentive awards in various categories

for the personnel having 10 years of

working time or more.

The traditional iftar dinner was held

in Bursa Karacabey, where NSK

Group factories are located, with the

participation of NSK Group employees,

families and business partners. The

iftar dinner, attended by people in

Salon Taha, was held in a friendly

atmosphere. The iftar invitation in

Istanbul was held at the Hilton Garden

Inn Hotel.

The invitations were held in two

locations with the participation of

approximately 1,500 people. Prior to the

iftar programs, the Seniority Incentive

Awards were presented to NSK Group

employees who are working over 10

years and above. Honorary President

Nurettin Kazangil, Chairman of the

Board of Directors Ömer Kazangil,

Members of the Board of Directors,

Mehmet Kazangil, Said Kazangil and

Yavuz Kazangil, presented the awards

for 61 employees in the categories of

10,15,20,25 and 30 years. The company

has 400 employees.

As known, ROTA manufactures OEM

products such as tie rod end, ball

joint, centre rod, axial joint, triangular

torque rod, torque rod and repair kit

for commercial vehicles, agricultural

tractors, construction machinery and

special vehicles.

NSK Group manufactures in 3 factories

in a total area of 48.000 m2 with 15.000

m2 closed area. Its products are

exported to more than 100 countries

with 2 sales and marketing companies

in Istanbul and Brazil. NSK Group

carries out production and salesmarketing

activities with its qualified

employees.

June 2019 8


First domestic automobile to hit streets by 2022

In November 2017, Turkey rolled up its

sleeves to design and manufacture its

first indigenous automobile in a joint

venture formed by five of the largest

Turkish industrialists, all experienced

in their own areas of operation. While

the project continues at full speed with

intensive public and private efforts, it

is projected that the first domestic car

will hit Turkish streets by 2022, Industry

and Technology Minister Mustafa

Varank told Sabah daily in an interview.

Recalling a recent meeting with

President Recep Tayyip Erdoğan, who

championed the project, Varank noted

that the line-drawing phase has been

completed and presented. The minister

noted that the process in the domestic

car began with the appointment of CEO

Mehmet Gürcan Karakaş, who assumed

the role in September 2018. “Business

plans have been made, and the plans

continue in accordance with the

schedule,” the industry and technology

minister said.

The 15-year plan of the project

envisions production of five models and

three facelift versions, Varank said.

The minister said the project is being

carried out by the private sector, and

they, as the government, are looking at

how can they contribute and help.

Varank said three-dimensional

drawings and engineering studies

continue. He said a team of 40

engineers in the company is dealing

with the research and development

(R&D) dimension of the project, saying

that the group is expected to reach 300

by the end of the year.

“The joint venture group will release

this model by catching up with the

era and exploring the window of

opportunity,” Varank noted. “I believe

this model will be quite popular. I

do not think there will be a market

shortage because the vehicle will be the

best electric car in its class. For this

purpose, we will carry out procedures

related to the infrastructure of electric

vehicles in Turkey as soon as possible.”

Five domestic firms - Anadolu Group,

BMC, Kök Group, Türkcell and Zorlu

Holding, with 19 percent of shares

each and the Union of Chambers and

Commodity Exchanges of Turkey

(TOBB) with 5 percent of shares, will

jointly lead the joint venture Turkey’s

Automobile Joint Venture Group

(TOGG).

Stressing that export will also be

possible since the automobile will

match contemporary requirements and

trends, Varank said they have received

positive responses from citizens, public

institutions and nongovernmental

organizations in this regard.

“With the introduction of electric cars,

technology is rapidly evolving in areas

such as driving techniques, smart city

planning and automobile software.

Upon switching to the electric car,

the whole industry began to change.

Therefore, we see Turkey’s automobile

project not only as an automobile

project but also as a project that will

transform the entire industry and

the automotive industry in Turkey.”

Suggesting that the mobility ecosystem

that will develop in the transformation

of the automotive sector will also an

important opportunity for Turkey in

the development of new technologies,

Varank noted that this is not just an

R&D project, but also a project to

produce a brand, so to speak.

June 2019

10


Karsan’s electric minibus hits European roads

Karsan’s Jest Electric, the first product

of the supply agreement signed

between domestic producer Karsan and

BMW for electric motor vehicles, is on

its way to Europe.

The first deliveries of Jest Electric

have been made to France, Germany,

Romania, Portugal and Slovakia, which

have all started using it.

The company has received a total

of 35 orders for Jest Electric from a

number of countries, including France,

Portugal, Romania, Lithuania, Slovakia,

Greece, Italy and Germany, announcing

that it has produced 20 of them at the

Bursa factory and exported the finished

products.

Karsan CEO Okan Baş said interest in

Jest Electric continues to grow every

day, adding: “With its distinguishing

features of dimensions and battery

technology from its rivals, Jest Electric

has begun to attract the attention of

Europeans. The Jest Electric, which

has already hit the roads in France,

Germany, Romania, Portugal and

Slovakia, has started turning heads in

Greece most recently.”

According to Baş, the company recently

won the tender for electric vehicles

in Lithuania and increased the total

number of orders to 35. “We continue to

receive new orders and are preparing

for new tenders,” he explained.

The power of Jest Electric is

derived from a 100 percent BMW

electric engine that ensures strong

acceleration. The BMW-made

electromotor in Jest Electric boasts 170

horsepower and 290 Newton meters of

torque, collaborating with a single rate

gearbox.

Jest Electric, with its 44 and 88

kilowatt-hour batteries developed

by BMW, offers up to 210 kilometers

of range and can be charged in eight

hours by conventional alternating

current chargers and in one hour at fast

charging stations.

Thanks to the regenerative braking

system that provides energy recovery,

the BMW ion batteries can recharge

themselves by up to 25 percent.

The Jest Electric features a 10.1-

inch multimedia touch screen, digital

dashboard, keyless go, USB sockets

and Wi-Fi compatible infrastructure.

The four wheels of the vehicle have

independent suspension systems.

June 2019

14


Plans underway to put speed limiters,

data recorders on cars

The European Union is moving to

require cars and trucks to have

technology that would help keep

drivers from speeding as well as data

recorders that would document the

circumstances of accidents.

Those were among the safety features

included in a provisional agreement

announced by the EU’s executive

commission.

The package would mandate so-called

intelligent speed assistance, which

recognizes speed limits using mapping

systems and help drivers observe them

by restricting engine power. The driver

can override the system by pushing

harder on the gas pedal. But the

onboard data recorder could further

deter speeding by registering the car’s

speed.

“Every year 25,000 people lose

their lives on our roads,” said

Elzbieta Bienkowska, the European

Commissioner responsible for internal

market and industry. “We can and must

act to change this.”

The European Commission, the

executive arm of the 28-country

EU, said that the features would be

required on all vehicles on European

roads from 2022.

The other safety features would include

systems to warn drivers if they seem

drowsy and against distractions such as

smartphone use. Cameras and sensors

would be required to avoid accidents

while backing up and to help keep a car

in a lane. For cars and vans, the deal

requires advanced emergency braking,

which can detect obstacles and push

the brake pedal if the driver does not

responds in time.

And another system would help bus

and truck drivers avoid hitting cyclists

in their so-called blind spots. Although

properly adjusted mirrors should

allow truck drivers to see to the side,

Germany’s transport ministry has

pushed for the measure to reduce

deaths of cyclists and pedestrians.

Much of the technology already exists

and is available on more expensive

cars.

The European Automobile

Manufacturers’ Association welcomed

the EU’s agreement but said vehicle

technology needed to be supplemented

with better road infrastructure and

measures to encourage safer driver

behavior.

“This challenging piece of legislation

will no doubt be instrumental in further

improving road safety - something

all auto makers are fully committed

to,” said ACEA Secretary General Erik

Jonnaert. “At the same time vehicle

technology alone will not be sufficient.

For maximum effect, policy makers

must now push for a fully integrated

approach to road safety; combining

vehicle technology with better road

infrastructure and safer driver

behavior.”

The association warned in December

that intelligent speed assistance should

be introduced only gradually. It said the

technology was hampered by too many

false readings due to out-of-date maps

and poor sign visibility.

The measures announced were agreed

on in negotiations between European

national governments, the commission,

and the European parliament. The

provision political agreement is subject

to formal approval by the European

parliament and EU leaders.

June 2019

16


‘Made in Turkey’ car to be fully

electric with 500 km range

Turkey’s first domestically

manufactured automobile, expected

to hit Turkish streets in the second

half of 2022, will be a fully electric

vehicle with a 500-kilometer range,

according to Industry and Technology

Minister Mustafa Varank. The minister

explained: “We will set forth our

own automobile as a project to fully

compete with its competitors and

develop an ecosystem within this scope.

We do not see it as just an automobile

project. There is great transformation

in the world, and the automobile

industry also experiences this change

and transformation in the fastest way,”

he said, stressing that as a technology

project, Turkey’s automobile would

transform the automotive industry

and make it competitive with other

countries.

The minister stressed that with the

electric engine, software, autonomous

driving and battery technologies, the

automobile industry was turning in a

completely different direction. “With

this project, we believe we have caught

this opportunity at the right time,” he

added.

In November 2017, Turkey had started

to design and manufacture its first

indigenous automobile in a joint venture

formed by five of the largest Turkish

industrialists, all experienced in their

own areas of operation.

Five domestic firms - Anadolu Group,

BMC, Kök Group, Türkcell and Zorlu

Holding, with 19% shares each, and

the Union of Chambers and Commodity

Exchanges of Turkey (TOBB) with 5%

of the shares - will jointly lead the joint

venture Turkey’s Automobile Joint

Venture Group (TOGG).

The minister said the prototype for

the locally produced car is likely to be

unveiled at the end of 2019. “Probably,

the car will be offered for sale and hit

the roads in the second half of 2022.

People are waiting for this car. It looks

like there will be demand for it,” he

explained adding that they would soon

announce the location of the research

and development (R&D) center. “If you

want to make an investment, you prefer

the closest location to the supplier.

So, you want to choose an area where

you can use the ecosystem in the most

efficient way,” he noted. “The talks

are in progress about the location

of the factory. We will not disclose

information on the subject due to

commercial confidentiality. We are not

unveiling the segment of the first model

either. However, they [the joint venture

group] plan to come up with a price that

will compete in global markets with all

models.”

June 2019 20


Turkey’s net international investment position improves

Turkey’s net international investment

position (NIIP) performed better in March,

rising 5.4% compared to the end of last

year, according to Turkish Central Bank

(CBRT) on May 20.

The NIIP, the difference between a

country’s external assets and liabilities,

totaled at minus $337.1 billion as of

March-end, up from minus $356.2 at the

end of 2018, the CBRT reported.

Turkey’s assets abroad increased by

4.6% to hit $241.7 billion during the same

period.

Country’s liabilities against non-residents

was around $578.8 billion in March, down

1.5% from the end of last year.

The NIIP -- which can be either positive

or negative -- is the value of overseas

assets owned by a nation, minus the value

of domestic assets owned by foreigners,

including overseas assets and liabilities

held by a nation’s government, the private

sector, and its citizens.

Turkey’s reserve assets rose 3.5%

to reach $96.3 billion, while other

investment stood at $92.3 billion,

indicating a rise of 7.4% in the same

period of time. A sub-items of other

investment, currency, and deposits

of banks amounted to $51.4 billion,

increasing 15% compared to the end of

2018.

“As regards to sub-items under liabilities,

direct investment at the end of March

2019 recorded $122.4 billion indicating

9.7% decrease in comparison to the end

of last year, with the contribution of the

changes in the market value and foreign

exchange rates,” the bank said.

Total external loan stock of lenders

went down to $78.1 billion as of Marchend,

falling 4.2% from the end of last

year. “Total external loan stock of the

other sectors recorded $104.4 billion

decreasing by 2.4%,” the bank added.

June 2019 22


23

June 2019


New package historic step to ensure value-added,

export-oriented production

The Treasury and Finance Ministry

announced a comprehensive financing

package for three areas of economic

activity, including the production of

raw materials and intermediate goods,

machinery and agriculture.

The ministry’s primary aim is to

introduce this TL 30 billion package,

İVME (advanced, productive,

indigenous, industry), to take a concrete

step toward supporting the passage to

export-oriented and high value-added

production, one of the most emphasized

agenda items in the New Economic

Program (NEP). The İVME package

also seeks to provide an innovative

and important possibility for banks to

hedge assets in their balances with the

actual consumer price index and the

government debt security index.

For the first time, a loan package as

large as İVME addressed the targeted

policies for Turkey’s $46.2 billion of

imports per year of raw materials,

intermediate goods and machinery

sectors. While devising this package,

a comprehensive study was conducted

to identify 43 key investment areas for

which support will be given to decrease

the current account deficit. Focusing on

specific sectors that have high import

dependency, run trade deficits, make

high contributions to employment and

have high potential for exports, the

ministry has taken into effect one of

the most concrete policy steps toward

the current account deficit issue of the

Turkish economy.

Support to boost the operationally of

the Turkish economy will not only be

provided for investments, but also will

be given to companies in 43 different

business areas. The package aims to

activate capacities that are inactive or

below potential.

An investment loan of up to TL 150

million would be provided for the

production of raw materials and

intermediate goods for a maximum of

10 years with a principal repayment

of up to two years. Furthermore, a

business loan of up to TL 30 million

would be granted for a maximum of five

years with a principal repayment of up

to one year.

Inflation and government securities

indexed loans provide more

advantageous conditions and promises

for business activities when finance

opportunities and conditions have

become tougher. In his presentation

on, Treasury and Finance Minister

Berat Albayrak emphasized that the

İVME loan package will contribute to

decreasing the current account deficit

of Turkey.

In recent months, Turkey has put forth

an important tempo in the current

account along with the momentum it

achieved in exports and has continued

to see a gradual decline in its current

account deficit.

Albayrak noted the current account

deficit reached its highest level of

$58 billion in May 2018, adding that

they expect to post a current account

surplus as of June, a first for the ruling

Justice and Development Party (AK

Party) in its 17-year rule.

Meanwhile, with measures taken by

the government and the stabilization

process in the economy, the country’s

12-month rolling current account

deficit dropped to $12.83 billion in

March, its lowest level since the end of

2009.

The monthly current account deficit in

March also saw its lowest level since

October 2015 and dropped to $589

million, decreasing by $4.14 billion

year-on-year, according to the Central

Bank of the Republic of Turkey (CBRT)

data. Economists expect the country’s

current account deficit to maintain its

trend and continue to narrow in April as

well and drop below $10 billion.

Last year, the current account balance

posted a deficit of around $27.6 billion,

improving from a nearly $47.5 billion

deficit in 2017. It realized around

3.5% of the country’s gross domestic

product. This figure was the lowest

since 2009, while Turkey’s highest

annual current account deficit over

the last decade was seen in 2011, with

$74.4 billion.

The country’s NEP, announced in

September 2018, targets a currentaccount-deficit-to-GDP

ratio of 3.3%

this year, 2.7% in 2020 and 2.6% in

2021.

The latest TL 30 billion loan package

will be facilitated by three public

lenders: Ziraat Bank, Halkbank and

Vakıfbank.

Commenting on the support package,

ZiraatBank General Manager Hüseyin

Aydın indicated that other participation

banks and conventional lenders are

expected to follow suit of state lenders

and join similar projects.

Aydın underscored that the stable

growth of the Turkish economy and its

ability to take a larger share of global

trade is possible with the increasing

quality of production.

Halkbank General Manager Osman

Arslan noted that the İVME financing

package is a visionary step for the

Turkish economy.

“In the first four months of the year,

we have observed the quick and

positive results of significant measures

targeting the cash flow of the private

sector. While the positive trend in

industrial production continues,

developments in the subsectors

strengthen the positive course of the

economic balancing period. We will

continue to support the real sector in

the second half of the year during which

we will continue to feel the impacts of

the economic reforms,” Arslan said.

The Halkbank general manager

remarked that the new financing

package would make significant

contribution to the Turkish economy,

as it will particularly provide loans for

import-dependent sectors that run a

trade deficit.

Vakıfbank General Manager Mehmet

Emin Özcan also highlighted that the

İVME financing package is of great

significance in terms of ensuring

sustainable growth, which is only

possible with high value-added

investments.

June 2019

24


Fiat Chrysler

proposes merger

deal with Renault

Group

Fiat Chrysler Automobiles

(FCA) said that it has offered

a fifty-fifty merger deal

with Renault Group. The

two automakers have been

planning a merger to curb

costs in producing vehicles

and to pool resources for

developing the next generation

automobiles.

“The proposed combination

would produce a global

automaker, preeminent in

terms of revenue, volumes,

profitability and technology,

benefitting the companies’

respective shareholders and

stakeholders,” FCA said in a

press release.

Meanwhile, Renault Group

in a statement said its board

of directors will discuss the

FCA’s bid. According to FCA,

the merged company may sell

8.7 million vehicles annually

and can be a leader in several

vehicle grades such as electric

vehicles.

“On a simple aggregated basis

of 2018 results, the combined

company’s annual revenues

would be nearly 170 billion

($190.3 billion) with operating

profit of more than 10 billion

($11.2 billion) and net profit

of more than 8 billion ($8.9

billion),” it added.

The company further said that

the combined business could

save 5 billion ($5.6 billion)

annually. Established in 1898,

Renault Group, sold 3.9 million

vehicles in 134 countries in

2018. The group owns Dacia,

Renault Samsung Motors,

Alpine and LADA brands.

FCA Group, which holds brands

like Abarth, Alfa Romeo,

Chrysler, Dodge, Fiat, Fiat

Professional, Jeep, Lancia,

Ram and Maserati also sells

vehicles in over 135 countries

globally. Italian Fiat Group and

American Chrysler Group had

merged, earlier in 2014 to form

the FCA Group.

More than 159,000 vehicles

registered in first quarter

The number of vehicles registered in

Turkey reached 159,219 in the first

three months of this year, the country’s

statistics authority said.

The first quarter figure was down 42.1

percent from the same period last year,

the Turkish Statistical Institute (TurkStat)

announced.

The total number of road motor vehicles

registered was around 23 million by the

end of March.

Automobiles accounted for the bulk of

new registrations - 60 percent (95,583)

- a drop of 42.4 percent year-on-year

between January and March.

In March, the number of registered

motor vehicles also slipped 37.9 percent

compared to the same month last year,

to 58,7909, TurkStat added.

The breakdown of model brands for

new registered cars in the month is as

follows: Renault, 16.1 percent; Fiat,

12.3 percent; Volkswagen, 11 percent;

Hyundai, 6.5 percent; Honda and Toyota,

6.2 percent apiece; Opel, 5.3 percent;

Peugeot, 4.3 percent; Dacia, 4 percent;

Mercedes-Benz, 3.7 percent; and other

brands accounted for 24.5 percent.

June 2019

26


Automotive firm to invest $225M by 2020 for facelift

One of the leading automotive

companies in Turkey, Tofaş, a joint

venture of Turkey’s Koç Holding and

Italy’s Fiat Chrysler, has decided

to start the facelift investment of

the Egea/Tipo car family produced

at the Tofaş’s plant located in the

northwestern province of Bursa.

In a statement to the Public Disclosure

Platform (KAP), Tofaş said it is foreseen

to invest approximately $225 million by

the end of 2020.

“With the material disclosures dated

10/25/2013 and 11/6/2014, the duration

of the publicly disclosed project has

been extended until the end of 2024,”

the company said.

Within the scope of the first investment

plan, the statement read, 1.3 million

units of production targeted in the

2015-2023 period have been realized

as approximately 530,000 units up to

now and with the contribution of the

new investment, a total of 1.45 million

pieces of production, 70 percent of

which is for export markets, is targeted

during the project period of 2015-2024.

“In this context, it is foreseen to invest

approximately $225 million by the

end of 2020 and it is planned to start

production of new vehicles in the last

quarter of 2020,” Tofaş said.

In a statement, Tofaş CEO Cengiz

Eroldu said the Fiat Egea has been the

most preferable automobile in Turkey

for the last three years, indicating that

Fiat Egea, which was chosen “Best-Buy

Car Of The Year In Europe” at AutoBest

2016, is also maintaining its market

success in the Europe, Middle East and

Africa region.

“The Egea model will continue

providing value added to our country’s

economy with the export volume it

produces,” Eroldu said.

In 2015 Tofaş introduced a sedan body

vehicle as the first member of the Egea

family, the company’s new passenger

car project. The model also went on

sale in other countries’ markets as

of December of the same year. With

the completion of project-related

investments, hatchback and station

wagon versions of the Egea family also

went on sale in 2016. Costing about

$1 billion, the project to develop these

models represents one of the biggest

product investments ever undertaken

in the history of the Turkish automotive

industry.

The sedan member of the Fiat Egea

family sold 34,000 units in 2018 and

holds the title of being “Turkey’s

Best-Selling Automobile” for the last

three years. Founded in 1968, Tofaş is

said to be the only company in Turkey

that manufactures both passenger

cars and light commercial vehicles.

With an annual production capacity of

450,000 vehicles and with nearly 9,000

employees, Tofaş is Turkey’s fourthbiggest

industrial enterprise.

Having had an export ratio of 80 percent

in 2018, the company is carrying

exports to around 80 countries. It

exported 243,832 units last year, while

its total production stood at 301,750

units. One of the important strategic

production facilities of Fiat Chrysler

Automobiles around the world, Tofaş

is also one of the biggest research and

development (R&D) centers in Europe.

June 2019

28


Turkey reduces tariffs on some US imports to reciprocate

Turkey has lowered tariffs on some U.S.

imports in response to a similar United

States move to halve tariffs on Turkish

steel imports, the official gazette showed.

The United States had doubled tariffs on

Turkish steel and aluminum imports last

August amid a diplomatic row between

the NATO allies. Turkey retaliated by

doubling tariffs on U.S. cars, alcohol and

tobacco imports.

“Reciprocally we decided to reduce by

half the additional duties levied on 22

products originating in the U.S.,” Trade

Minister Ruhsar Pekcan wrote on Twitter.

“With this decision duties levied on the US

originating aforementioned products will

be reduced from $521.2 million to $260.6

million,” she added.

Before the decision, tariffs on U.S.

whiskey stood at 140%, while the rate is

at 120% for passenger cars, 50% for PVC

and 60% for cosmetic products.

The White House decision last week

to halve those tariffs was a positive

development between Ankara and

Washington, but the U.S. administration

also terminated Turkey’s eligibility for

the Generalized System of Preferences

(GTS) programme, in a move Turkeysaid

contradicted trade goals.

Pekcan said Turkey would continue

working to boost trade with the United

States to $75 billion.

Banker:Turkey

to overcome

difficulties

Turkey can overcome difficulties through

its dynamic population, Adnan Bali, the

CEO of private lender İşbank, said.

Turkey generated 7 million new jobs in

the last 10 years, a figure more than the

total population of several EU countries,

but could not decrease unemployment,

he said.

Noting that 800,000 people joined

the labor force every year in Turkey,

Bali underlined: "We have to produce

800,000 new jobs every year to keep

unemployment stable."

"I believed that Turkey will overcome

difficulties with its dynamic population

structure," he stressed.

In order to accelerate development, he

said, Turkey should raise production and

exports. Turkey should also increase

domestic savings and use foreign sources

mindfully, Bali noted.

Capacity usage improves in May

The capacity utilization rate

(CUR) in Turkey’s manufacturing

industry improved on a monthly

basis in May, data from the

Central Bank showed.

The figure reached 76.3 percent

this month, up 1.3 percentage

points from April, according to

the bank survey.

Among the six main industrial

groups, the highest capacity

usage was seen in intermediate

goods with 76.3 percent while

the lowest CUR was 73.4 percent

for durable consumer goods.

Of more than 20 sectors, apparel

manufacturers posted the

highest CUR with 83.36 percent

while May’s lowest capacity

usage was observed among

manufacturers of leather and

related products, with 61.96

percent.

The bank also reported that

the business confidence index

declined by 6.3 percent on a

monthly basis to touch 98.9

in May. That followed the 3.3

percent, 5 percent and 4.5

percent increases recorded in

April, March and February.

The 100-point level on the

index separates optimism from

pessimism.

Only two of the business

sentiment survey’s eight main

subindices rose in May monthon-month,

data showed.

On a related note, the Turkish

Statistics Institute, TÜİK,

reported that confidence in the

country’s construction, services

and retail trade industries

declined on a monthly basis this

month.

The construction sector

confidence index dropped

the most in the month with a

7.7 percent month-on-month

decrease to 49.8 points.

The seasonally-adjusted

confidence index for services

was down 4.4 percent in May to

79.4 while confidence in retail

trade fell 0.7 percent to 89.9.

June 2019

30


Turkish drivers prefer electric vehicles above world average

As recent developments have raised

consumers’ belief in the future of electric

vehicles, studies suggest that Turkish

consumers’ willingness to purchase electric

vehicles maintains a level above the world

average. Developments in the field of electric

vehicles are moving very rapidly. Studies

show that battery prices are rapidly declining,

while the ranges are increasing, plus fast

charging stations are becoming incrementally

widespread. According to information compiled

from the TEB Cetelem Observatory 2019

report, electrical vehicles offer some solutions

in environmental, economic, industrial and

social terms thanks to their specific technical

features. However, in addition to some

possible obstacles in the development process,

ongoing technical and organizational issues

are also worth noting. When these obstacles

are overcome, drivers are expected to fully

benefit from the power and convenience of this

innovation. The results of the report indicate

that significant progress has been made on

issues related to the infrastructure and legal

regulations of electric vehicles in the period

between the observatory survey conducted

in 2012 and the study conducted in 2019 on

electric vehicles. Consumers’ perceptions

and requests have also changed during this

period. Through the promotional activities

carried out in this period and the first models

seen on the roads in the meantime, people

have gotten used to this new product more

and more. In the survey conducted in 2012,

the lack of confidence in the technology of the

product was the third reason for not buying

this product, while this item ranked sixth in

this year’s survey, proving that people have

adopted this product. While the limited range

of electric vehicles stands out as the main

weakness, it is seen that providing customers’

acceptance of this factor is an obstacle that

cannot be ignored. Moreover, while the

purchase price and range, which drivers

consider as a critical criterion for electric

vehicles, has not shown much improvement in

recent years, this element is still considered

to be one of the biggest obstacles to people’s

adoption of electric vehicles. However,

positive developments have been recorded

in the amount of savings in usage expenses.

Consumers’ perceptions of electric vehicles are

likely to be significantly improved due to the

increased attractiveness of electric vehicles.

The rate of people ready to pay more for an

electric vehicle in Europe increased by 7 points

compared to 2012. Meanwhile, a survey of

10,600 people between the ages of 18 and 65

from 16 countries, including Turkey, outlined

the opinions of consumers about electric

vehicles. According to the report, 25 percent of

the vehicles sold in the world are expected to be

electric in 2030. This figure is expected to rise

to 36 percent in China, where the purchase is

encouraged, and up to 39 in Norway. According

to statements by Turkish drivers participating

in the survey, 29 percent of the vehicles to be

sold in Turkey will be electric. Given the Turkish

consumers’ perception of electric vehicles, the

reason for not buying is the vehicles’ high price.

Short range despite long battery charge time is

also expanding the distance between Turkish

consumers and electric vehicles. Another factor

keeping Turkish drivers away from electric

vehicles is their range of 83 kilometers per

day, which is 32 kilometers above the world

average. In spite of the negative data, the rate

of Turkish drivers, who said they could buy

an electric car in the next five years, was 60

percent, which was 17 percentage points above

the world average of 43 percent. Turkey’s first

indigenous automobile to be manufactured by

the Automobile Joint Venture Group (TOGG) is

expected to enter the market in 2022 with an

electric SUV in the C segment.

The fact that batteries will be cheaper is shown

as the first reason for electric vehicles to

become widespread as of 2030. A cost of $1,000

for one kilowatt-hour in 2010 is now down by 5

percent. In the future, this cost is expected to

fall below $150


Firms ready to place orders for

domestic car

Turkey’s first indigenous car project

has already started to attract the

interest of car rental companies. Zeplin

Car, one of the major players in this

field with a fleet of 18,200 vehicles, has

announced that it is ready to place an

order for 2,000 vehicles.

Works on the domestic car, which

will hit the roads in 2022, continue

at full speed. The Industry and

Technology Ministry is said to have

been enjoying an influx of orders

placed by individuals and companies.

In November 2017, the Turkish public

saw the launch of a groundbreaking

initiative to manufacture Turkey’s

first domestic automobile. The project

has brought together the country’s

largest manufacturers and companies

in a consortium that includes Kıraça,

Anadolu Group, Turkcell, Zorlu and

BMC.

During the announcement, President

Recep Tayyip Erdoğan said he would

buy the first car. According to reports,

over 30,000 orders have so far been

placed by various individuals and

companies.

Zeplin Car Chairman Hakan Sevim

said the daily car rental industry has

brought an innovative solution for

companies and individuals. “With the

spread of electric cars in particular,

the industry will grow even further.

We want to fill this opportunity with

domestic electric vehicles. For this

reason, we have placed an order for

2,000 vehicles. However, it is also

important that the vehicle has a range

of at least 400 kilometers.”

Pointing out that they deliver some

3,000 vehicles to consumers on a

daily basis, Sevim said the economy of

“sharing” is on the rise and that this

market will grow even further with the

increase of electric cars.

“Now, without the need to buy,

everyone can get the vehicle they

want at any time. Turkey’s domestic

automobile project is therefore of

great importance. An electric car with

a range of 400 kilometers will ensure

significant savings for both companies

and individuals. We will buy 2,000

vehicles once the domestic automobile

is ready,” he added.

He added that they have started making

future plans for daily car rentals in line

with the electric car infrastructure. “In

the future, people will go to electric car

parks located within walking distance

and instead of buying cars they will

take the charged cars and go wherever

they want. Therefore, we attach great

importance to the domestic electric car

project,” he said.

Sevim said some 9,000 companies

are registered with Zeplin Car.

“We have developed the corporate

membership system in Turkey for

the first time. Under this project, we

open current accounts for companies

and provide cars to their staff in 81

provinces of Turkey. The employees

or the managers of the company with

corporate membership can take the

car as soon as they get off the plane

in any cities they want, in line with the

corporate agreement.

June 2019

32


Turkey’s bus, minibus exports record nearly

19 pct rise in Q1

Bus-minibus-midibus exports, one

of the subproduct groups of the

automotive sector, rose by 18.91

percent in the first quarter of 2019.

According to the Automotive Industry

Exporters’ Association, the Turkish

automotive sector exported buses,

minibuses, and midibuses to 110

countries in 2018, amounting to

$1.8 billion in exports with a 12.57

percent increase year-on-year.

In the first quarter of 2019, this

automotive group saw an 18.91

percent increase in exports over the

same period of the previous year,

rising from $420.8 million achieved

in the first quarter of 2018 to $500.4

million in the same period of this

year.

If the sector’s export growth trend

continues as in the first quarter, the

year-end export figure is expected to

exceed $2 billion.

In the first quarter of the year buses,

minibuses and midibuses were sold

to 72 countries, with Romania taking

the lead in terms of quantity.

Exports to Romania, which overtook

Germany in this product group,

surged 13.5-fold over the same

period of the previous year from

$5.58 million to $80.65 million. This

figure amounted to $75 million of

the export increase Turkey achieved

in this product group in the first

quarter.

Exports to Germany, which came

second in exports this quarter fell

by 19.73 percent to $69.4 million.

Turkey’s automotive exports to

France, on the other hand, increased

by 37 percent from $38.5 million to

$52.9 compared to the same period

of the previous year.

Meanwhile, exports to Italy, Poland,

the U.K., Spain, Bulgaria, Croatia,

Belgium, Hungary, Israel, Norway

and Greece surpassed $10 million

each in the January-March period.

Among these countries, Hungary

saw a 7.5-fold increase in exports

from $1.5 million to $12.6 million

compared to the previous year.

Exports to Israel, which is among

the leading countries in the export

hike, rose from $2.2 million to $11

million, while exports to Greece

climbed from $3 million to $10.5

million.

June 2019

36


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Turkey becomes

new regional management center of Nissan

Japanese automotive giant, Nissan

has made its Turkey country office

the management center for eight

North African countries and the

Commonwealth of Independent States

(CIS), the company confirmed in a

statement.

The decision will expand the sphere of

responsibility for Sinan Özkök, Nissan

Turkey’s managing director. He has

now been appointed as the Managing

Director for North Africa and CIS

countries.

As of April 1, Özkök will handle Nissan

operations in Morocco, Tunisia,

Sudan, Azerbaijan, Armenia, Georgia,

Uzbekistan and Turkmenistan.

According to the statement, the

company’s activities in these countries

were previously managed within the

Middle East region.

Nissan Turkey, which started to operate

under the global umbrella of the brand

in 2015, is continuously increasing its

market share, it has retained its leading

position in the SUV market with a 19

percent share. Nissan Turkey has also

set an example to other countries with

its innovative practices.

Following the decision, Özkök said:

“North Africa and the Commonwealth

of Independent States are high potential

markets for our brand. We are happy

to contribute to the development of our

brand by moving our knowledge and

experience to a vast region, spanning

from Casablanca to Tashkent. In this

period where we are experiencing

shrinkage in the domestic market, this

decision will be a source of motivation

for our team working in Turkey and

produce new excitement.”

Having started his career in the

automotive industry in 1993, Özkök

worked on logistics and product

planning. Since 2001, he worked on

strategic planning in Renault France

and served as Paris regional manager.

After returning to Turkey in 2007, Özkök

served in many high-level positions

such as dealer development, branch

management and sales and network

directorship.

He was appointed Nissan Turkey

Managing Director in October 2015 and

managed to make the brand the leader

in SUV segments and one of the top 10

automotive brands in the country.

June 2019

38


EU commercial vehicle market expands 5.8% in Jan-April

ISTANBUL-The EU market for

commercial vehicles posted an

annual growth of 5.8% during the first

four months of 2019, the European

Automobile Manufacturers’ Association

(ACEA) reported.

The number of new commercial vehicle

registrations amounted to 871,100 in

the January-April period, according to a

ACEA data.

Among key markets, Germany (12.1%),

the U.K. (8.3%), France (6.5%), Spain

(3.8%) and Italy (3.4%) recorded an

increase in demand for commercial

vehicles.

Demand for vans -- light commercial

vehicles -- rose by 5.9% to surpass

721,000 new registrations in the bloc

during the four month period.

On the heavy commercial vehicles

side, EU demand grew by 4.9% to over

111,000 new trucks during the same

period.

More than 136,500 new medium/

heavy commercial vehicles were also

registered in the EU, marking 6.1%

increase year-on-year the January-

April period.

“Four months into the year, demand for

new buses and coaches showed a slight

decrease (-0.9%),” the ACEA added.

Last year, the number of new

commercial vehicle registrations

amounted to 2.5 million in the

28-member bloc.

Mergers, acquisitions in Turkish

automotive industry to increase

Mergers and acquisitions in the Turkish

automotive industry, especially in terms

of supplier companies, are expected to

increase in the coming years, according

to a report by international audit and

tax advisory company KPMG.

The report elaborated on the

developments experienced in the

Turkish automotive industry over recent

years and included expectations for

2019.

Examining the acquisitions and

mergers that have taken place in the

Turkish automotive industry since 2015,

the report highlighted that the supply

industry will be the center of attention

for foreign investors throughout the

year.

KPMG Turkey Advisory Head Hande

Şenova said the automotive industry,

which has been through a tough year

due to high exchange rates, high

borrowing costs and high input costs,

offers significant opportunities for

investors.

“Companies with high export rates,

relatively low exchange rate risks and

that can protect their profitability are

on the radar of strategic and financial

investors. In addition, we think that

important opportunities will develop

in the coming period for investors who

follow financially troubled companies

that could not borrow from the market

and have a need for financing,” she

said.

According to the report, the majority

of the 23 mergers and acquisitions

transactions seen in the automotive

sector in Turkey between 2015 and 2018

took place in the supply industry.

At the same time, it was observed that

foreign investors entering the Turkish

market are targeting to reach leading

manufacturers that strengthen their

position in Turkish and European

markets.

Recently, the automotive sector,

which has been going through

a comprehensive technological

transformation, has become the

center of research and development

(R&D) activities with the entrance

of technology companies to the

automotive sector, according to the

report. The report also stated that

companies that want to keep up with

the change in the sector often try to

establish partnerships with technology

companies.

The sector hit an all-time high in 2018,

raising its exports by 11 percent to

$31.6 billion. It took the lead for the

13th time in a row in annual exports.

It constituted 19 percent of the

total exports and 6 percent of total

employment.

The domestic automobile market

contracted last year in Turkey, but this

slowdown did not stop the country’s

strong sales performance compared

to European nations. Turkey overtook

23 countries and ranked eighth in

Europe in terms of automobile sales

in the continent, according to the

“2018 European Automotive Market

Evaluation” report prepared by the

Automotive Distributors Association

(ODD) and based on the data of the

European Automobile Manufacturers

Association (ACEA).

With a total of 486,321 automobiles

sold, Turkey outperformed the

Netherlands, Sweden and Austria in

the list of Europe’s most automobile

sales last year. According to December

data, Turkey ranked sixth, selling

60,843 automobiles, following Germany,

France, the U.K., Italy and Spain.

When foreign capital investments made

in the Turkish automotive industry

are examined, the report said the vast

majority of them on unit base came

from the U.S., European countries,

Japan and India.

In the field of tractors and agricultural

machinery, India-based Mahindra’s

investments come to the fore. The

report also projects that due to the

size of the domestic market and tax

incentives for products produced within

Turkey, India’s investments in the

country will continue in the upcoming

period.

June 2019

40


Turkey exports automotive goods to 39 countries

Turkey’s automotive industry, which

achieved an all-time high export figure

in 2018, saw the number of countries

where it sells goods worth more than

$100 million reach 39.

The long-standing leader of Turkish

exports, the automotive industry

reached $31.6 billion in exports

last year, marking an 11 percent

rise compared to the previous year,

according to information compiled from

the Turkish Exporters Assembly (TİM)

and the Uludağ Automotive Industry

Exporters Association (EİB).

The industry exported to a total of 207

countries, free zones and autonomous

regions, ranking first among other

industries for 13 consecutive years.

The number of countries where it sends

products worth $1 billion or more went

up to nine last year from seven in the

previous year. The number of countries

to where the industry’s exports

crossed the $100-million threshold

reached 39 from 34 from the previous

year, with nine of them exceeding the

billion-dollar threshold and 30 of them

exceeding $100 million.

The Netherlands and Romania were

below the billion-dollar market, but

well above the $100 million threshold.

Reaching $905 million with a 19

percent rise, the Netherlands ranked

10th among the countries to which the

Turkish automotive industry carried out

largest exports, followed by Romania

with $893 million.

Exports to Croatia, Slovakia, Serbia,

Taiwan and Chile stood over $100

million. The industry’s exports to

Morocco stood at $561 million, Israel at

$523 million, Sweden at $488 million,

Russia at $453 million, Hungary at

$416 million, Portugal at $364 million,

Austria at $307 million and Egypt at

$304 million.

Croatia, Slovakia, Serbia, Taiwan and

Chile joined the countries that exceeded

the $100 million export threshold last

year.

Exports to Croatia soared 50 percent

from $77 million in 2017 to $115.4

million in 2018, Slovakia to $109 million

from $71.6 million with a 52 percent

rise, Serbia to $105 million from $82.4

million with a 27 percent rise, Taiwan to

$104.6 million from $61.6 million with

a 70 percent rise and Chile to $100.6

million from $63 million with a 60

percent rise.

In addition to these countries, Turkey

exported goods worth over $100 million

to Bulgaria, Algeria, Czech Republic,

Denmark, Saudi Arabia, Norway,

Mexico, South Africa, Iraq, Iran, Ireland,

Switzerland, Canada, Ukraine and

Greece. Exports to Brazil increased

by 13 percent to $99,165 million. If the

rise of exports to the country continues,

it will soon be joining the group of

countries receiving over $100 million

worth of Turkish automotive industry’s

goods.

On the other hand, eight EU members

and the U.S. came to the fore as export

markets that exceeded $1 billion in

2018.

Exports to Germany reached $4.8

billion last year, followed by Italy, with

$3.3 billion, France with $3.2 billion,

U.K. with $2.9 billion, Spain with $1.8

billion, and Belgium with $1.4 billion.

Sales to Slovenia and Poland exceeded

the $1-billion threshold for the first

time last year, reaching $1.2 billion and

$1.1 billion, respectively. Exports to

the U.S. stood at $1.1 billion, despite a

decline from the previous year

June 2019

42


Turkey: Ford’s only remaining heavy commercial vehicle production hub

Ford Otosan has become the only truck

manufacturing and development center of

the American automotive firm Ford Motor

Company. Ford closed its factory in Brazil

and put an end to the production of heavy

commercial vehicles in South America,

making Turkey a global production hub in

this regard.

Ford Otosan, which once again brought

the American automotive giant in the truck

market in 2010 with its new “Ford Trucks”

brand and new global products developed

in the process, is now gearing up to

manufacture for the whole world.

General Manager Haydar Yenigün said Ford’s

exit from the South American market will not

adversely affect them. “On the contrary, the

axis of heavy commercial vehicles is shifting

to Europe, Russia and the Middle East and

North Africa region. It was Ford Otosan’s

doing and this will give us a great advantage

in this scope,” he added.

Yenigün further noted that as Ford’s global

engineering center for heavy commercial

vehicles and relevant diesel engine and

engine systems, Ford Trucks produces

advanced technologies to deliver products

that compete in all potential export markets;

not only in Turkey, but also in Europe and

North America.

“We carry on our path with our outstanding

success in research and development and

production and our rapidly growing structure

that is now spreading to 36 countries,” he

continued. “We have the infrastructure,

competence and experience to continue our

effective growth in the international markets

in the coming period as the company’s only

heavy commercial vehicle developer and

manufacturer on the global level.”

The groundwork for Ford Trucks’ global

network was laid in 2010 following the Global

Cargo agreement inked with Ford Motor

Company, one of the main shareholders of

Ford Otosan. In line with the Global Cargo

Growth Strategy, Ford Otosan started to

build its global network by assigning truck

sales distributors in 60 countries on three

continents, mainly in the Middle East, Africa,

Russia, Turkic Republics, Central and

Eastern European markets. Ford Trucks,

which currently operates in 36 countries and

aims to reach 51 by the end of 2020, decided

to put its plan, including Western European

markets, into effect earlier following the

international successes achieved by F-MAX,

its new tow truck manufactured in Eskişehir.

Yenigün made further evaluations about

the Western European expansion of Ford

Trucks, which is a very important venture for

the future of Ford Otosan, highlighting that

they are at the forefront of their investments

which they have made since 2010.

“We continue our growth in international

markets with the opening of our dealers

in Central and Eastern Europe following

the Middle East, Africa, Russia and Turkic

Republics,” he said. “At a time when the

heavy commercial market is shifting to

Russia and the Middle East and North Africa

region, we have displayed a strong stance in

these markets, enriching our experience in

different markets and becoming more visible

on the industry’s radar as an international

brand.”

“We have received nearly 70 dealership

requests from Europe after the success of

our tow tractor, which was fully developed by

Turkish engineers and manufactured in our

factory,” Yenigün noted.


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Current account gap drops at its lowest since 2009

Picking up from where it left off at the

end of last year, Turkey has continued

to see a gradual decline in its current

account deficit.

With measures taken by the

government and the stabilization

process in the economy, the country’s

12-month rolling current account

deficit has dropped to $12.83 billion in

March, its lowest level since the end of

2009.

The monthly current account deficit in

March also saw its lowest level since

October 2015 and dropped to $589

million, decreasing by $4.14 billion

year-on-year, according to the Central

Bank of the Republic of Turkey (CBRT)

report released. The figure was nearly

$4.73 billion in the same month of 2018.

A group of 17 economists, surveyed

by Anadolu Agency, estimated a

$900-million deficit in March, while,

on the other hand, the median of 12

forecast in a Bloomberg survey was for

a gap of $1 billion.

Economists expect the country’s

current account deficit to maintain its

trend and continue to narrow down in

April as well and drop below $10 billion.

Haluk Bürümcekçi, said recovery in the

current account balance will continue

until end of the first half of 2019.

“Lower foreign trade deficit versus

the last year and posting surplus of

services item were main factors for

recovering of the current account

deficit,” he noted.

Bürümcekçi said that he expected the

country’s year-end current account

deficit will be $10 billion.

Banu Kıvci Tokalı, the chief economist

of HalkInvest, a subsidiary of state

lender HalkBank, stressed the current

account deficit could drop to $8-10

billion in April, of which data will be

released in June.

She underlined that the decline in the

deficit would continue rapidly during

the first half of the current year due to

policies to support exports, the base

effect and moderate energy prices.

Tokali forecast that the country would

close the year with a $19 billion current

account deficit. “The current-accountdeficit-to-GDP

ratio, which was 5.6

percent in 2017 and 3.6 percent in 2018,

could fall to 2.6 percent by the end of

2019,” she added.

Orkun Gödek, DenizBank Investment

Group strategist, highlighted that the

current account deficit of $589 million

was under the expectations of $1 billion

in March.

“In the first quarter, the current

account deficit was $1.9 billion, while

it was $16.2 billion in the same quarter

last year,” he said.

In an interview , Treasury and Finance

Minister Berat Albayrak said the

current account deficit, which nearly

hit $60 billion last year, will nearly be

zeroed by the end of May.

Albayrak said the current account

balance and surplus were in a period

of rapid recovery and that there would

be no external financing requirement in

the next period.

The central bank said in its report that

the development in the current account

is mainly attributable to a $3.7-billion

decrease in the goods deficit recording

net outflow of $916 million.

The CBRT also said Turkey’s current

account deficit – excluding gold and

energy – posted a $3.5-billion surplus

in March 2019, versus a $573-million

deficit in the same month last year.

“Services item realized net inflow of

$1.3 billion increasing by $113 million

compared to March 2018,” the bank

said. It added that travel item under

services recorded a net inflow of $1.04

billion, rising by $55 million compared

with March 2018.

Previously, current account deficit fell

88.4 percent in January to $813 million

deficit, indicating a decrease of $6.22

million compared to January of the

previous year, bringing the 12-month

rolling deficit to $21.59 billion, the

lowest level of 105 months.

In February, it fell to $718 million, down

by $3.78 billion from the same month

last year. The 12-month rolling deficit

reached $17 billion in the month.

Economists forecast that the 2019-end

deficit will be $13.8 billion.

Last year, the current account balance

posted a deficit of around $27.6 billion,

improving from a nearly $47.5 billion

deficit in 2017. It realized at around 3.5

percent of the country’s gross domestic

product. The figure was the lowest

since 2009, while Turkey’s highest

annual current account deficit over

the last decade was seen in 2011, with

$74.4 billion.

The country’s new economic program,

announced in September 2018, targets

a current-account-deficit-to-GDP ratio

of 3.3 percent this year, 2.7 percent in

2020 and 2.6 percent in 2021.

June 2019 46


10. Aftermarket Conference held in İstanbul

Aftermarket sales around the world will reach 1.3 trillion dollars by 2030

The 10th Aftermarket Conference, the

automotive industry’s most efficient

organization for aftermarket products

and services, was held in İstanbul. The

participants discussed the current

practices, opportunities, problems in

the automotive industry, within a global

and national perspective.

The Aftermarket Conference was

organized jointly by the

TAYSAD, Automotive Suppliers

Association of Turkey, OIB, the

Automotive Industry Exporters’

Association, and OSS, the Turkish

Automotive Aftermarket Association,

for the 10th time this year.

During 10th Aftermarket Conference,

where the leading stakeholders of the

sector were present as participants and

speakers, main industrial strategies

were also discussed.

Alper Kanca, Chairman of TAYSAD,

Automotive Suppliers Association of

Turkey said that TAYSAD has more than

430 members and has made significant

contributions to the economy with its

domestic turnover of 25 billion dollars

and 11 billion dollars exports and 200

thousand employment. He also pointed

out that aftermarket volume in the

world will reach 1.3 trillion dollars by

2030, until 2030. China is expected to be

at the top with 8 percent growth in this

sector.

“Our country, which has a great

potential of maintenance, repair and

spare parts, should keep up with the

future of the automotive industry with

its strong structure in the field of

supply industry.”

“In order to adapt to the changing

competitive environment, TAYSAD

members closely follow technological

developments and continue to invest

in innovation and expansion. With the

help of their advanced manufacturing

capabilities, they produce prototypes,

use testing facilities, perform CNCbased

and conventional machining,

engage in product development, pursue

collective R&D activities with foreign

and domestic companies and use CAD-

CAM applications during the design

process.” Alper Kanca, Chairman of

TAYSAD noted.

Güven Özyurt, OIB Vice Chairman said

the Turkish automotive industry has

become an export champion for 13

years. He added, “Our sector reached

an export figure of 31.6 billion dollars

in 2018 with an increase of 11 percent

compared to the previous year. We

set the export target for 2019 as 32

billion dollars. Today, the automotive

industry is one of the pioneers of

digital transformation. It is clear that

OEMs will be the driving force of this

transformation in the industry. In order

to maintain the competitiveness of our

supplier companies, we put emphasis

on compliance with Industry 4.0.”

Rıza Şahin, OSS, Chairman of

Automotive Aftermarket Association

emphasized the importance of

digitalization and said, “One of the

topics that will determine the future of

our sector is the digital transformation.

According to research, software,

electronics and data-oriented services

in the automotive sector will become

one-fourth of Europe’s market until

2025.”

Moreover, LMC Automotive Director

Jonathan Poskitt shared his

expectations of the European market

by focusing on the current figures of

the European automotive industry. He

said, “The demand for SUV models in

Europe is growing year by year. We

expect Sedan, HB and StationWagon

to outperform their market share. In

addition, the electric conversion of SUV

models continues rapidly. In 2015, we

expect only 1 percent of electric SUV

models to rise to 35 percent in 2025.”

June 2019 48


Investment council urges for new reform

vision to draw more FDI

The Coordination Council for

the Improvement of Investment

Environment (YOİKK) convened to lay

out a new revisionist road map for

reform that will further strengthen

Turkey’s investment environment. In

his opening remarks at the meeting

held in the Presidential Complex,

Vice President Fuat Oktay drew

attention to the reforms implemented

in the last 17 years. “Turkey has

been branded as the most reformist

country among the members of

the Organization for Economic Cooperation

and Development (OECD)

in eliminating the hurdles limiting

foreign direct investment (FDI).

Thanks to these reforms, Turkey has

attracted $210 billion in FDI in the

last 17 years. YOİKK, formed with the

inclusion and contribution of many

Turkish associations, bodies and

nongovernmental organizations (NGOs)

operating in the field of investment,

has been conducting activities since its

foundation, Oktay said.

YOİKK, formed with the inclusion

and contribution of many

Turkish associations, bodies and

nongovernmental organizations (NGOs)

operating in the field of investments,

has been conducting activities since its

foundation, Oktay said.

The vice president stressed Turkey’s

determination to conduct sweeping

reforms and noted that the meeting

will specify the activities to be held in

the upcoming period. The council will

seek to further improve the investment

environment, he added.

The YOİKK will determine flexible and

sustainable policies based on national

and international circumstances.

YOİKK has made significant

contributions to the improvement of the

investment climate, according to Oktay,

who also noted that all these reform

works were carried out by taking into

consideration the comprehensive

consultations and demands from

the sections represented by the

participants.

The vice president emphasized that

thanks to the results of the dedicated

work run by relevant ministries and

NGOs and coordinated by the board

in the recent period, Turkey ranked

43rd in the World Bank’s Ease of

Doing Business list for 2019, climbing

17 places compared to previous

year, noting that 2.4 percent out of

the 5.7 percent average economic

growth in the last 17 years came from

investments.

According to the report published

by the World Bank, Turkey received

74.33 points out of 100, improving 4.34

points compared to previous year. New

Zealand, which topped the list, scored

86.59 points.

According to the “Doing Business 2019

– Training for Reforms” report, the

previous year’s reforms accelerated

Turkey’s efforts to improve the

business climate for domestic small

and medium-sized enterprises (SMEs).

Oktay further remarked that the

continuation of the momentum in the

investment environment depends on

the sustainability and development of

works carried out by the institutions in

the recent period.

He indicated that with the vision it will

lay out, YOİKK will be a pioneer for the

increase of foreign direct investments,

both in the international and domestic

arenas.

“In addition to being a platform for

solving problems, YOİKK will act with

a perspective that aims to produce

an appropriate investment climate

for attracting tomorrow’s technology

and investments. We aim to make a

‘participatory and innovative’ spirit

of cooperation prevail in our board

studies, whose road map and operation

with main lines we will be designating.

We plan to primarily include in the

process the ‘solution oriented, welldefined

and result-oriented’ reform

proposals that our board members will

offer to further develop the investment

climate,” said Oktay.

The contribution and guidance of

YOİKK will have important effects on

the national development initiative,

according to the vice president.

“As a result of the improvement in the

investment environment, we expect the

international investments that will head

toward our country to produce added

value, provide technology transfer

to our country, and the employment

figures and the current account balance

to follow a more positive course. We

should worker harder to attract foreign

investment and remain competitive

in this period of escalating global

competition and financial tightening,”

Oktay said.

June 2019 52


Auto production about

490,000 in Jan-April

ANKARA- A total of 489,429 vehicles rolled off Turkish

automotive industry production lines in the first four

months of this year, the Automotive Manufacturers

Association (OSD) said.

The country’s auto production- including automobiles,

commercial vehicles, and tractors- fell 13% year-onyear

in the January-April period.

The association said automobile production in Turkey

also fell 14% to reach at 322,281 during the same

period.

From January to April, total auto sales market almost

halved to 123,155 vehicles.

Turkey’s automotive exports went down 8% on a yearly

basis to hit 126,026 in the first four months.

The sector earned $10.5 billion from automotive

exports between January and April.


We Continue Our Employment Mobilization

We will increase our

employment rate by

35 percent

Speaking at the opening of the

12. Labor Council program held

in ATO Congresium, President

Recep Tayyip Erdogan states

employment calls carried out

in February. Declaring that

they provided employment for

250 from the beginning of 2019 up

to now, Emin Ustun, Chairman of

Emin Grup, said, “We will provide job

for 500 till the end of the year in

order to support the President of the

Republic of Turkey. By increasing

our number of employment by

35 percent, we will increase the

number of our employees to 1852

in total. In the difficult period

of our country, we will focus on

investments that will prevent

unemployment. Situated in Turkey’s

four point we continue unabated our

work with our 103 branches. In order

to reach a wider audience, we will

increase our number of branches to

129 by the end of the year. We will

increase employment and support

the country’s economy with the

important investments we make.

Declaring that they have employed

about 250 people with the call

of employment made by our

President in February, Emin Ustun,

Chairman of Emin Grup, said,

“We will double this number by the

end of 2019. We will increase the

number of our employees to 1852 by

providing more employment

for 500 people. At the same time

in 2019, opening new branches in

16 points in Istanbul, Bingol, Siirt,

Istanbul, Rize, Giresun, Yalova,

Bursa, Karaman, Erzincan and

Kirikkale, we will raise the number

of our branches 129. One of the

biggest reasons for unemployment

is the halt of investments. At this

point, we have big tasks. As Emin

Grup, we will do all the works in

order to add value to our country and

we will continue our investments.”

June 2019 54


Bank to extend TL

loans for

non-SME firms to

boost exports

Türk Eximbank, which provides

loans in local currency to small

and medium-sized enterprises

(SMEs) exporting in Turkish lira,

will from now on grant loans to

non-SME companies as well.

In a statement, Trade Minister

Ruhsar Pekcan said significant

efforts have been made in

recent years to improve trade in

local currencies.

She pointed out that the share

of the Turkish lira in exports

rose from 4.5 percent in the

first two months of 2018 to 4.8

percent in the first two months

of this year. Pekcan said Türk

Eximbank has continued to

provide TL loans to exporting

SMEs with affirmative interest

rates compared to market

figures. She added that the

bank channeled Turkish lira

sources to SMEs in August 2017

and provided additional credit

support of about TL 10 billion to

SMEs, including TL 2.1 billion in

2017 and TL 7.7 billion in 2018,

adding the said support will

continue to increase in 2019.

The trade minister said that

Türk Eximbank’s loan facility

in Turkish lira was planned to

be diversified and increased

by taking into consideration

the importance and growing

potential of trade in local

currency in the upcoming

period. On providing loans

in the local currency to non-

SME companies, Pekcan said:

“For this purpose, the current

Turkish lira loan program for

SMEs exporting in the local

currency will continue.”

The loan will have a one-year

maturity period and a six-month

interest rate payment based

on the Central Bank of the

Republic of Turkey’s (CBRT)

daily weighted average funding

rate.

“We believe this opportunity will

contribute to the development

of trade in local currencies,”

said Pekcan.

Turkey and Russia cooperate on

aircraft, armor parts

Russia and Turkey are jointly working

on aircraft and helicopters, and also

components for armor, the press

office of Russia’s state arms seller

Rosoboronexport, part of the state hitech

corporation Rostec, reported.

“We have a number of joint projects

for developing promising aircraft and

rotorcraft platforms, components for the

armor and the after-sale maintenance

of the armaments supplied,” the press

office quoted Rosoboronexport CEO

Alexander Mikheyev as saying.

Turkey is also showing interest in the

newest Russian combat modules, air

defense systems with different range

capabilities and anti-tank weapons.

Despite rivals’ interference in bilateral

relations, Russia and Turkey are coping

with the difficulties that arise, the chief

executive stressed.

“At present, we are discussing with

our Turkish partners about the

implementation of some of the most

important projects in the sphere of

military and technical cooperation

and in the civilian industry... We are

undoubtedly ready for various formats

of technological cooperation, including

such science-intensive spheres as

the aerospace industry, helicopterbuilding

and the energy sector,” the

Rosoboronexport press office quoted

Rostec CEO Sergei Chemezov as saying.

The Rosoboronexport and Rostec

chiefs announced this on the eve of the

IDEF’19 defense industry exhibition

to be held in Istanbul from April 30-

May 3. The exhibition will showcase

equipment for land troops, the navy, the

air force, security technologies, space

technologies, onboard systems and also

helicopters, ships, electronics, security

systems, transportation and logistics

equipment and systems.

June 2019 56


Automotive exports total $2.6 billion in April

The Uludağ Automotive Industry

Exporters’ Association (OİB) announced

that the Turkish automotive industry

achieved the second highest April

performance in its history.

According to an OİB written statement,

Turkish automotive industry exports

reached $2.6 billion with a 9.8 percent

decline in April. Despite the fall, the

industry achieved the second highest

April performance in its history.

The automotive industry, which still

ranks first in Turkey’s exports with a 17

percent share, reached an average of

$2.6 billion in exports in the first four

months of the year. Industry exports

were $10.3 billion, a 6.8 percent fall in

the January-April period.

As far as product groups, the export of

vehicles, with the exception of buses,

minibuses and midi-buses, declined

in April, while exports to EU countries,

which have a 76 percent share of

Turkish automotive exports, dropped 13

percent.

Considering the April performance

in terms of product groups, export of

private cars, which have a 37 percent

share, plummeted by 23 percent to

$961 million.

Meanwhile, supply industry exports

decreased by 3 percent to $926 million,

the second-largest share of automotive

exports.

Exports of motor vehicles for

transportation of goods decreased 1

percent to $469 million, while exports

of buses, minibuses and midi-buses

increased 14 percent to $170 million.

Exports to France, the largest market

in passenger cars, dropped 36 percent,

followed by Italy at 41 percent, Spain

at 34 percent, Germany at 33 percent,

the U.K. at 17 percent, Belgium at 36

percent and Sweden by 22 percent.

On the other hand, exports to Israel

rose 15 percent and to Slovenia and

Hungary by 19 percent each. Exports of

passenger cars, to the U.S. soared by

43.9 percent.

Meanwhile, exports to Germany, the

largest market for the automotive

supply industry, shrank by 11 percent

and to France, the second-largest

market, by 1 percent and to Romania,

plunging by 23 percent.

Moreover, exports to the U.K., the

U.S. and Algeria skyrocketed by 17

percent, 24 percent and 58 percent,

respectively. Export of motor vehicles

for transportation of goods to the

U.K., Slovenia, and Spain went up

by 32 percent, 72 percent and 30

percent, respectively, while exports

to Italy fell by 41 percent, Belgium

by 13 percent, the Netherlands by 18

percent, Germany by 26 percent and

Sweden by 59 percent. In April, exports

to Germany, the largest market for the

Turkish automotive industry, stood at

$368 million, an 18 percent decline, and

to France at $268 million, a 23 percent

fall. Exports to Italy totalled $237

million with a 28 percent fall.While

exports to Spain and the Netherlands,

two important markets, declined by 24

percent each and to the Netherlands by

22 percent, exports to the U.K., Slovenia

and the U.S. were up by 14 percent, 39

percent and 57 percent, respectively.

The reason for the fall in the German

market was the 33 percent fall in

automobile exports and 11 percent fall

in supply industry exports. Also, the

reason for the shrinkage in exports to

France and Italy was the 36 percent

and 41 percent fall, respectively, in

passenger car exports.

Exports to EU countries, which are

the largest market as far as country

groups, dropped 13 percent to nearly

$2 billion. Automotive exports to

African countries surged by 30 percent

and North American free trade zone

countries by 14 percent.

Exports to the EU countries stood at

$8 billion in the January-April period,

while exports to North American

free trade zone and Middle Eastern

countries shrank by 19 percent and 4

percent, respectively.

Automotive exports to African countries

increased by 10 percent and Far

Eastern countries by 12 percent.

June 2019 58


Share of imported cars declined to 61 pct

The share of imported automobiles

in the Turkish market has declined to

61 percent in the first three months

of this year as the market share

of locally produced models keeps

growing.

Turkey imported more than 77.9

percent of its automobile in 2013.

That share dropped to 70 percent

in 2017 and further declined to 63.3

percent last year.

According to the Automotive

Distributors Association (ODD),

the market share of imported

automobiles in January-February

fell to 61 percent, while the share

of domestic cars increased to 39

percent. Thus, automobile imports

have declined by 16.9 points since

2013.

While the automobile market shrank

by 52 percent in the January-

February period, imported car sales

and domestic automobile sales

fell by 55 percent and 45 percent,

respectively. A total of 30,184

automobiles were sold during this

period.

Also, the sales of light commercial

vehicles dropped by 54 percent in the

same period, in which the share of

imports stood at 47 percent.

One of the most important reasons

for the decline in the share of

imports was the increased demand

for automobiles produced in Turkey.

Currently, five automobile brands

are producing eight models of

automobiles in Turkey. Tofaş

manufactures the Fiat Egea in

Bursa, Oyak Renault produces the

Megane sedan and Clio hatchbacks

in Bursa, Toyota produces the C-HR

and Corolla sedans in the industrial

province of Sakarya, Hyundai Assan

produces i10 and i20 and Honda

produces Civic sedans in the country.

Another reason for the decrease

in imports is the fact that many

brands have not launched their 2019

car models due to the recession,

changing the supply-demand

balance in the market. The gap

caused by imported cars in the

market is currently compensated by

domestic automobiles.

According to forecasts, a total of

350,000 automobiles, including

220,000 imported, will be sold

in 2019. The share of imported

automobiles is expected to be 62.8

percent by the end of the year.

Having run a foreign trade surplus in

the past decade with the exception

of the years of 2011 and 2015, the

Turkish automotive industry broke a

new record in 2018.

Because of the rise in domestic

models, the foreign trade surplus

soared to $13 billion in 2018 from

$6.5 billion in 2017. A new foreign

trade surplus record is expected in

2019.

Automotive equipment manufacturer

Delphi Technologies has made

Turkey a base of after-sale services

and spare parts.

Reşat Dumanoğlu, the regional

director for Turkey, the Caucasus,

the Middle East and Africa at

Delphi Technologies, stated that

the company grew by 44 percent in

2018. “Thanks to our efforts, we have

become the regional directorate of

67 countries in Turkey, the Caucasus,

the Middle East and Africa,” he said.

June 2019

60


Mercedes contributes to Aksaray’s

economy by TL 1.7B

German automotive firm Mercedes

has carried out a socio-economic

survey that measured the concrete

contributions its truck factory in central

Turkey’s Aksaray has made since its

establishment in 1986.

Mercedes, operating in Turkey for

over 52 years now, employed two

independent research companies to

carry out the survey.

The findings showed that the factory,

built with a foreign direct investment

of 495 million euros ($551.81), has

produced an economic value of

over TL 1.7 billion in the city with its

production, employment, research

and development (R&D) activities and

exports over 33 years.

Some 2,000 people from the different

demographic backgrounds, including

local people, tradesmen, local

authorities, employees and their

families who joined the survey said that

Mercedes-Benz Türk is a symbol of

Aksaray, adding that the fact that the

factory is located in the city is a source

of pride for them.

Mercedes-Benz Türk CEO Süer Sülün

expressed their pride regarding the

company’s impact in transforming the

region. “Over time, we have seen that

Aksaray, one of the most beautiful

examples of local development, has

become one of the few Mercedes-

Benz cities in the world. With our

production, exports, R&D activities,

employment we have produced, and

investment activities, we provide added

value to both Aksaray and the national

economy,” Sülün said.

He added that Mercedes-Benz Türk

constitutes some 20 percent of

Aksaray’s economy thanks to the

indirect and stimulated impacts of

the truck factory on its surroundings.

Aksaray’s total gross domestic product

(GDP) in 2017 was TL 10.64 billion,

according to Turkish Statistical Institute

(TurkStat) data. “When we laid the

foundations of the factory 33 years ago,

we predicted that this investment would

not be limited to providing employment

alone, but the employment provided

would have a direct impact on the

quality of life. These figures prove that

we have turned out to be right in our

predictions,” he said

June 2019 62


Bus, minibus exports record nearly 19 pct rise

Bus-minibus-midibus exports, one

of the subproduct groups of the

automotive sector, rose by 18.91

percent in the first quarter of 2019.

According to the Automotive Industry

Exporters’ Association, the Turkish

automotive sector exported buses,

minibuses, and midibuses to 110

countries in 2018, amounting to $1.8

billion in exports with a 12.57 percent

increase year-on-year.

In the first quarter of 2019, this

automotive group saw an 18.91 percent

increase in exports over the same

period of the previous year, rising from

$420.8 million achieved in the first

quarter of 2018 to $500.4 million in the

same period of this year.

If the sector’s export growth trend

continues as in the first quarter, the

year-end export figure is expected to

exceed $2 billion.

In the first quarter of the year buses,

minibuses and midibuses were sold to

72 countries, with Romania taking the

lead in terms of quantity.

Exports to Romania, which overtook

Germany in this product group, surged

13.5-fold over the same period of the

previous year from $5.58 million to

$80.65 million. This figure amounted

to $75 million of the export increase

Turkey achieved in this product group

in the first quarter.

Exports to Germany, which came

second in exports this quarter fell by

19.73 percent to $69.4 million. Turkey’s

automotive exports to France, on the

other hand, increased by 37 percent

from $38.5 million to $52.9 compared

to the same period of the previous year.

Meanwhile, exports to Italy, Poland, the

U.K., Spain, Bulgaria, Croatia, Belgium,

Hungary, Israel, Norway and Greece

surpassed $10 million each in the

January-March period.

Among these countries, Hungary saw a

7.5-fold increase in exports from $1.5

million to $12.6 million compared to the

previous year.

Exports to Israel, which is among the

leading countries in the export hike,

rose from $2.2 million to $11 million,

while exports to Greece climbed from

$3 million to $10.5 million.

Ford to close 3 factories in Russia over low demand

U.S. carmaker Ford will close three of

the four factories of its Russian joint

venture after deciding to stop making

passenger cars in a country where car

sales have slumped in recent years, the

company said.

Ford said in a statement that it has

signed a preliminary agreement with its

local partner Sollers on “a significant

restructuring of its... joint venture in

Russia, focusing exclusively on growing

its commercial vehicle business moving

forward.”

The joint venture “will discontinue its

passenger vehicle portfolio in Russia

to help deliver a more competitive and

sustainably profitable business going

forward,” Ford said.

Ford, based in the US state of Michigan,

said that by the end of June this year it

will close its vehicle assembly plants

in the northwestern city of Saint

Petersburg and the city of Naberezhnye

Chelny in Tatarstan, central Russia.

It will also close an engine plant in

Yelabuga in Tatarstan that opened in

2015.

Sollers will have a 51 percent stake in

the restructured joint venture.

Currently, the factories produce seven

models including the Ford Transit van.

Ford said that the “Russian passenger

vehicle market has been under

significant pressure in recent years,

with recovery slower than expected

and a shift to lower-priced passenger

vehicle segments.”

The carmaker said that this led to

“underutilization” of factories and

“inadequate returns on invested

capital,” although sales of the Ford

Transit continue to grow, with a 15

percent share of the market segment.

Following a period of growth and

massive investment by global

carmakers, Russia’s car market

collapsed between 2013 and 2016,

whiplashed by international sanctions

over the Ukraine conflict and a crash in

global oil prices.

New car sales, a key indicator of

consumer confidence, fell by more than

half during that period.

However, sales of new cars in Russia

rose in 2018 for a second year running,

but slowed in February this year.

June 2019 64

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