The Business Year

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Osman Boyner

CEO, BD OTO

Battery-powered cars are three to four times more efficient than regular cars. The sector hasn’t taken off properly yet because we don’t know how to store electricity efficiently, and that creates a range of problems. Much has changed over the last five years, with advanced battery technology and a lowering price. Thanks to gadgets such as the iPad, the price of lithium ion batteries has decreased as there is wider production and a lot of governments are investing money via subsidies, such as China. The US and Israel are especially looking to invest in alternative energy sources for transportation to move away from a reliance on fossil fuels. An Israeli-American company called Better Place develops battery-swapping technology because batteries have limited lifespans. In 10-20 years, Israel will become a country where you can only use electric vehicles. For our commercial customers, we install the charging infrastructure in their warehouses and put in our own meter. At the end of the month, they just pay us say ‚¬1,000 per car for 3,000 kilometers. We also pay for the electricity. We have a campaign called “everything but the driver.“ We started the campaign with our Danish partner to launch it also in Denmark, because it is a very attractive opportunity. We looked up an old partner in Germany, and we also want to do it the UK if it makes sense. We want to enter the UK directly, as London is an especially large market.

Aclan Acar

Chairman, Doğuş Otomotiv

Commercial vehicles make up 30%-35% of total sales. There are two reasons behind that. First of all, there is a tax incentive. In Turkey, there are very high taxes in the car market; not only for imported cars, but domestic cars as well. This is called the Special Consumption Tax, which can be as high as 120%. If you would like to buy a ‚¬200,000 Bentley in Turkey, you can only buy it for ‚¬500,000. Medium- to high-income level individuals are buying family-type passenger cars, such as the Volkswagen Polo or Golf. They also purchase from other competitors, such as Fiat, Ford, and Renault. The luxury segment is relatively small, something like 15% of total sales. In terms of local production, most of it is focused on commercial vehicles for the domestic and export market. All of the main brands, such as Ford, Fiat, and Renault, are being manufactured in Turkey. The reason that they are focused on commercial vehicles is that the Special Consumption Tax on this vehicle type is 15%, which is much less than that of passenger cars. Another reason is that there are a growing number of small entrepreneurs, and they would like to buy a car and use it for their business during the daytime and for their family in the evening. It helps both personal and business needs. We finance most of these cars. Most of the financing demand is for small- to medium-sized vehicles. Most Lamborghini customers, for example, make a purchase simply by using cash.

Haydar Yenİgün

General Manager, Haydar Yenİgün

The year 2011 has broken records for Ford Otosan with respect to production, exports, and domestic market sales. Becoming the “best-selling brand“ for the 10th consecutive year, which is an outstanding achievement in the automotive industry where up to 60 brands compete, Ford Otosan has broken an impossible record. As Ford Otosan, not only were we the bestselling brand of Turkey in 2011, but we also became a leader among Ford markets by achieving the highest market share in Europe. Overtaking France and Spain in terms of total sales with our retail sales of 141,633 units, we became Ford’s fourth greatest market in Europe following the UK, Germany, and Italy. Surpassing the 1.5 million ceiling in exports with our Connect exports to North America that exceeded 90,000 units, our growth strategy in global cargo and the delivery of the 175,000th Cargo formed the milestones of the success we achieved in 2011. In my 25 years of experience in this business, I have learned there is never a single reason for anything. The success of Turkey’s economy as a whole was one of the reasons, for sure, but there were others, such as the elections, the weather, and the situations in Syria and Iran not being as serious as they are now. We applied many different contingency plans to keep our company as safe as possible during the recession period after 2008 crisis.

Alİ Kİbar

CEO, Hyundai Assan

Automotive sales are closely related to GDP per capita growth; economic problems in Europe will have a negative impact on the demand side. However, we see this as an opportunity for Far Eastern manufacturers that have facilities close to Europe. Thanks to the logistics cost advantage of Hyundai Assan, we believe that any drop in export sales to Europe will be limited for us. Furthermore, Turkey’s surrounding region still has active demand and this balances demand decreases from the European region. I believe that the tax increase will not have an absolute negative effect on car sales, but the demand for smaller engine cars will increase. It’s hard to forecast consumer behavior over the short term, but for the long term, with the anticipated increase in personal income levels overall, car ownership will increase despite high taxes. It’s clear that manufacturers and distributors should plan ahead for increased demand for small passenger cars. The Minister of Energy and Natural Resources, Taner Yıldız, thinks that the effect of new tax regulations on automobiles will fade away, and I think he is also forecasting the replacement of larger-engine cars with smaller ones in the car pool. The availability of a qualified labor pool, a strategic location close to Europe, the Middle East, and the CIS, increasing local demand, and strong support from the government are the advantages Turkey has.

Murat Selek

CEO, Karsan

We believe that branding is very important for Turkey, and that the country can create its own automobile brand in various platforms. And now we are very close to our target. We opened the door to a new segment with our Concept V1 vehicles and we are working in this direction. We are carrying out comprehensive research to market Concept V1 in different markets such as handicapped accessibility, comfort, environmental friendliness, iconography, and low-cost features. We want to carry our cars proudly in world metropolises as Turkey’s first automobile brand in the taxi segment, and later on in the highly accessible vehicle segment. In order to implement our strategy to target international markets we are in a very intensive working tempo. Within the scope of our “V1 Global Marketing Vision“ working study, we are researching macro indicators, supply, demand, and regulator perspectives. Our goal is to create a highly accessible vehicle platform with the Concept V1, make it a benchmark in the international arena, and create a brand in the Turkish automotive industry. We want to conquer the US and the UK in the international markets and be accepted in the Turkish market, and then we want to reach Asia, South America, and other big markets. Karsan plans to start the mass production of the Concept V1 in the first half of 2014, and targets production of 4,000 to 5,000 units yearly to start.

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