Turkey: Ford to consolidate production of LCVs in Europe

Hyundai doubles production capacity of passenger cars to 200K

2013/05/23

Summary
Ford and Tofas (Fiat) mainly produce CVs
Turkish government announces investment incentives for auto industry
Ford to consolidate development and production of CVs in Europe
Hyundai Motor Company to double production capacity to 200K units by the end of 2013
Renault starts production of new Clio, Fluence, and Symbol from fall 2012
Toyota produces new Corolla and Honda considers production of Urban SUV Concept
Sales volume and shares in Turkey by OEMs

Summary

In 2007, the annual production volume of vehicles in Turkey exceeded one million units for the first time. The volume decreased by 24.2% y/y to 869,605 units in 2009 after the economy was hit with the effect from the bankruptcy of Lehman Brothers. However, the production in Turkey has maintained a level between 1.1 and 1.2 million units since 2010.

Auto industry in Turkey has become an export hub mainly targeting Europe. About 70% of the vehicles produced within the country are exported. Turkey has a population of around 75 million (as of December 2012), and its domestic automobile market volume, which was around 500K units several years ago, has grown to approximately 900K units. Because the models produced in-country are limited, approximately 60% (over 70% for passenger cars) of the sales volume within Turkey are imports.

The Turkish government has expanded investment incentives for 2012 and 2013 to enhance domestic automobile industry. It is planning to increase the automobile export value from the current 25 billion dollars to 75 billion dollars by 2023.

As part of its restructuring strategy in Europe, Ford is closing two of its plants in the U.K., but it will enhance the production structure in Turkey to transfer the production of the Transit. A third plant will be constructed to make Turkey a development and production site for light commercial vehicles (LCVs) marketed in Europe.

Hyundai Motor Company is planning to expand its business utilizing Turkey-South Korea FTA which went into effect in May 2013 and double its passenger car production capacity to 200K units by the end of 2013.

Renault began production of the new Clio launched in the fall of 2012 at plants in Turkey and Flins, France. The company and the French government has been in dispute over the production ratio at these two plants, however, the production volume for January to March 2013 were 60% from the Turkey plant and 40% from the Flins plant in France. Renault also started the production of the new Fluence and Symbol.

As for Japanese OEMs in Turkey, Toyota will start production of the next generation Corolla sedan from June 2013. Honda is considering producing the Urban SUV Concept based on the next generation Fit.

"2014 Ford Transit Connect wagon"
(sold as the Tourneo Connect in Europe)
showcased at 2013 Detroit Auto Show

"Corolla Furia Concept" believed to
go into production from June 2013
(photo taken at 2013 Detroit Auto Show)

Production, exports and sales volumes in Turkey

	2008	2009	2010	2011	2012	Jan.-Mar. 2012	Jan.-Mar. 2013
Production Exports	1,147,110 910,261	869,605 628,970	1,094,557 754,469	1,189,131 790,966	1,072,978 729,923	281,240 200,383	277,146 205,373
Sales Local Imports	526,544 220,457 306,087	575,869 261,948 313,921	793,172 327,764 465,408	910,867 372,335 538,532	817,620 305,926 511,694	144,003 56,929 87,074	160,443 51,481 108,962
Exports/Production Imports/Sales	79.4% 58.1%	72.3% 54.5%	68.9% 58.7%	66.5% 59.1%	68.0% 62.6%	71.2% 60.5%	74.1% 67.9%

Source: Otomotiv Sanayii Dernegi (OSD)
Note: numbers in blue are item breakdown of new vehicles sold.

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