‘State should be partner in national car project to encourage investors’

Turkey’s expertise in vehicle production can compete with that of many other countries, and it is ready to work on producing a national car, but to encourage more investors to join the project, the state should be a partner in the process, a Toyota executive has told Today’s Zaman.

Toyota Turkey CEO Ali Haydar Bozkurt says Turkey will need large investments before it can create its first national car.

Toyota Turkey CEO Ali Haydar Bozkurt says Turkey will need large investments before it can create its first national car.

Ali Haydar Bozkurt, the CEO of Toyota’s sales and marketing division in Turkey, underscored that many global brands are based in Turkey, producing several models in the country, proof that the Turkish automotive sector is one of the best in the world. “This sector [Turkey’s automotive sector] has been awarded many times as ‘the best’ around the world because of its know-how, sub-contractors and understanding of quality,” Bozkurt said. “Many models of global brands that come off the production lines in Turkey have a high share of domestically produced parts, evidence that the quality of Turkey’s production lines is comparable to that of other countries. What I am trying to explain is that we have all the necessary ingredients — such as huge development in the domestic market, a strong intention on the part of the government and sector-specific expertise — to produce our first national car.”

“However, creating your own car is not as easy as it sounds since it requires large investments. I think this project [producing a national car] will be sped-up if the state becomes a partner, which will encourage more entrepreneurs and investors to take part in this dream,” Toyota’s executive added.

Turks have always dreamed of driving in their own brand-name car, much like Germans and South Koreans. There were many attempts to realize this dream, including the Devrim and Ford Otosan’s Anadol in the 1960s, but the two brands never made it like their European counterparts. However, despite a long pause in the plans to produce a national car, the dream is still here, especially after Turkey witnessed incredible economic growth over the last eight years, with the Justice and Development Party (AK Party) in office since 2003.

Despite fluctuations in global markets, Turks have grown more eager to buy new cars over the past eight years than before, leading to an all-time record of some 730,000 cars sold in the past year. This, of course, attracted more foreign investment to the country as the established vehicle brands expanded their product variety, producing more cars in their Turkish plants. After the success in 2010, many industry analysts voiced the expectation that Turkish domestic vehicle sales would surpass a psychological threshold of 1 million units in 2011. However, the government was not too happy with the boom in vehicle sales as many of these were imported cars, widening the current account deficit (CAD). To reduce the number of imported cars, creating an added value to the national economy and, of course, for the prestige of the nation, the government decided to revive the idea of producing the country’s own car by introducing the Automotive Strategy Paper earlier this year.

Upon the release of the strategy paper the government increased its calls on Turkish entrepreneurs to contribute for the first national car brand. The first vehicle should be designed as a passenger car, the strategy paper says. Following pressure from the government, the Automotive Manufacturers’ Association (OSD) last month released a comprehensive report for the possible production of a national car to the Ministry of Industry and Technology. Referring to the details of the paper, which states that some 200,000 cars should be produced in the first phase of the project in order to reach a price label of TL 40,000, taxes included, Bozkurt noted that the taxes are very high, which is an obstacle before the development of a domestic auto market.

“A new taxation arrangement [for new cars] will widen the domestic vehicle market,” Bozkurt said. “If you want to sell 200,000 units of a ‘Turkish car’ in the first phase [i.e., in the first few months following its introduction] a domestic market should be created where 1.5 to 2 million vehicles are sold annually. Therefore, government incentives play a vital role in creating a larger domestic car market, and for creating Turkey’s national car brand. Investors will be more likely to participate in producing our own national car,” he added. “We, as Toyota, do not shy away from competition in Turkey coming from a national car. On the contrary, this project will attract more investment to the country and the [automotive] sector, which will in turn positively affect Turkey’s branding.”

Moreover, the executive also underlined that more than one model should be produced in order to reach the goal of selling 200,000 units of the national car in the first phase. He noted that demand in the domestic market cannot be ignored and that the focus should be on producing light commercial vehicles and small family cars.

 

 

 

20 October 2011, Thursday / YASİN BABACAN, İSTANBUL