AUTOMOTIVE INDUSTRY
Emrah KUTLU
Zeynep AVCIOĞLU
AUTOMOTIVE INDUSTRY
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Key driving sector of the economy
Closely tied to other sectors of the economy
Prime buyer in basic industries
Requires complex and multidisciplinary
technology
AUTOMOTIVE INDUSTRY
• Intense competition in the market
• Intensive R&D
• Fastest developing sector in the global
economy
AROUND THE WORLD
• 1800’s Europe
• US Mass production
• 1990’s Globalization
TURKEY
• mid 1950’s
• 1954 Türk Willys Overland Ltd.
• Tofaş, Renault, Ford
• Joint ventures
MARKET STRUCTURE
• Highly labor and capital intensive
• Majority of costs for producing
- Labor
- Materials
- Advertising
MARKET STRUCTURE
PORTER’S FIVE FORCES MODEL
MARKET STRUCTURE
• The auto industry is considered to be an
oligopoly.
• Today there are 15 companies in production of
which 5 are automotive producers and 10 are
commercial vehicle producers.
MARKET STRUCTURE
• The automotive industry is one of the four
largest exporters.
• Significant contribution to:
- National production and development
- Employment
- Level of technology
MARKET STRUCTURE
Table- 1 PRODUCTION IN TURKEY
Source: OSD, MVI Monthly Report
MARKET STRUCTURE
• The companies in the sector are mainly located
in the Marmara Region.
• Existing motor vehicle production capacity of
the automotive industry in Turkey is 1,015,000
units per year, as of 2002.
Table- 2 The Firms in the Automotive Industry
Source:OSD, 2002
Table- 3 The Leading Firms in the Industry and Their Sales
2004 yılı ilk 500
firma sıra no.
2003 yılı
500 Büyük
Firma Sıra
No
Firma ve Müessese
Adı
Bağlı
Bulunduğu
Oda
Özel Firma
Sıra No
Üretimden
Satışlar Net
(YTL)
2
2
FORD
OTOMOTİV SAN.
A.Ş.
İSTANBUL
1
4,445,190,178
3
11
TOYOTA
OTOMOTİV
SANAYİ
TÜRKİYE A.Ş.
ADAPAZARI
2
3,348,031,394
4
4
OYAK-RENAULT
OTOMOBİL
FABRİKALARI
A.Ş.
İSTANBUL
3
2,966,839,536
9
7
TOFAŞ TÜRK
OTOMOBİL
FABRİKASI A.Ş.
İSTANBUL
7
2,146,938,617
16
17
MERCEDES BENZ TÜRK
ANONİM
ŞİRKETİ
İSTANBUL
12
1,218,993,109
Source: ISO, 500 Büyük Sanayi Kuruluşu Anketi, 2004
CONDUCT
LEADING EXPORTING COUNTRIES
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France
Germany
Italy
UK
Table- 4
Source: www.wbr.co.uk, About the Turkish Automotive Industry
Table- 5 Automobile Imports( in units)
Years
Imports from EU
Total Imports
Share of Imports
from EU
1997
93,811
135,795
69%
1998
93,549
110,552
84%
1999
102,662
121,309
84%
2000
236,902
272,110
87%
2001
66,405
74,165
89%
2002
53,121
61,294
86%
Source: OSD, 2005
CONDUCT
PRODUCT DESIGN
-Design of Textile and Textile-Based Products Used in Automotive
-Designing Commercial and Public Transport Vehicles Like Trucks, Buses,etc.
- Development and Redesign Work for Currently Produced Automobiles Towards
New Markets
-Design Work Towards Developing Accessories and Products of Special
Functions
- Prototype Processes of Vehicles Designed Abroad and Design Work Concerning
Test Production
CONDUCT
PARTNERSHIPS
• Tofaş- Fiat
• Otosan- Ford
• Oyak- Renault
PERFORMANCE
SWOT ANALYSIS
The Strength of the Turkish Automotive Industry
Economically
a) Third major sector in Turkish manufacturing industry
b) Leading private sector investor
c) Driving force in manufacturing industry with its high value added
d) A reliable source of tax revenue with its totally registered production
PERFORMANCE
Human Knowledge
a) High-skilled human resources both in production and management
b) Sustainable and improvable competitive workforce with low labor cost
and culture of productivity
c) Accumulated technological know-how and rapidly growing investments in
R&D
d) Quality management systems
e) Widespread distribution and marketing networks
f) Integration with world automotive industry since 1990s
PERFORMANCE
Geostrategic Importance
a)
The most developed automotive industry and a unique export and
production base in the region with close bilateral relations with EU, G8,
Eurasia
b)
Export experience and strong export markets
c)
Easy access to potential emerging markets
PERFORMANCE
The Weakness of the Turkish Automotive Industry
a) Unstable domestic market
b) Loss of quality and quantity in manpower as a result of the crises caused
by the weak economy of the country
c) In adequate investments in the sector
d) High costs of raw materials due to capacity utilization and production
below economies of scale
e) High sales taxes and gasoline prices
f) Lack of international strategy
g) Excess capacity
h) Insufficient export incentives
GROWTH AND FUTURE
- The automotive industry in Turkey has a significant potential
for progress and export capacity. With the completion of
global vehicle projects currently under progress, Turkey will
soon reach an annual vehicle export capacity of at least
500,000 units.
- In the near future, Turkey will be the world‘s alternative
production center of vehicle and parts, and the automotive
sector will become one of the leading sectors of the
manufacturing industry, with exports of $8-8.5 billion.
GROWTH AND FUTURE
Basic elements of the national export strategy to reach these goals are;
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Exporting of knowledge-intensive products with high added value
Focusing on markets with high purchasing power
Reaching the end consumer
Adopting quality by all industrial institutions
Establishing sales prices based on market conditions and customer
requirements
Following new developments
Focusing on R&D
Investing more in technology, human resources, information,
and quality training
CONCLUSION
Globalization will continue increasingly in the automotive sector.
The automotive industry in Turkey is in a position where it can produce
at global standards. It has developed its competitive capabilities, and a
structure that can apply common marketing strategies with licensing
countries.
The sector is able to create more added values.
Having a competitive structure, having the power to manufacture
quality and consistent products with new technologies, and most
effectively, having the cost-price advantage, puts Turkey in a position
of being an important manufacturing base and an important market,
from the perspective of the global automotive.
THANKS FOR YOUR
ATTENTION…