|
|
 |
|
Viewing report
|
|
|
|
CEO 360 Degree Perspective of The Automotive Industry in Turkey
Frost & Sullivan, Aug 2011, Pages: 116
Automotive Suppliers Keen on Quality Production for Exports Find Opportunities in the Turkish Automotive Industry
Domestic Annual Light Vehicle Sales Volumes to Reach 1 Million Units before 2015; Annual Domestic Production to Touch 1.5 Million Units by 2020
A gross domestic product (GDP) growth of over 7 per cent, rising incomes and an unsaturated domestic demand with just 110 cars per 1,000 people have considerably amplified the demand for light vehicles in Turkey. The production of the Chery, as well as the increase in the production capacity of the Hyundai i20 and the Ford Transit models are expected to be the notable production developments in the next five years. The production industry is focused on exports to Europe and the United States, with Europe alone accounting for 65 per cent of the exports. However, Turkey will have to find other export markets in the Middle East and Northern Africa to reduce its dependence on the volatile West European automotive market. “Well-defined government support for setting up production, a young population (64 per cent of the population is between 15 and 59 years) and R&D units will attract substantial foreign investments to the automotive segment,” says the analyst of this research. “Fiscal reforms, along with an escalating population, low costs and a culture of high-quality production, make Turkey an attractive investment destination for global automotive OEMs and suppliers.”
Frost & Sullivan has identified seven customer segments based on vehicle pricing and length. Vehicles in the price range of 25,000 Turkish Lira (TL) to 50,000 TL, and with lengths of between 3,700mm and 4,500 mm, cater to three different customer segments. These are low-medium family, lower-medium fleet/family and upper-medium family. Another analysis of the vehicles’ pricing and variants has revealed that most of the high-selling models cater to the (low/upper) medium customer/fleet segment. The high-selling compact cars and sedans targeted at the medium family consumer segment have more than 20 variants. Meanwhile, models catering to the medium-fleet customer segment are priced between 24,000 TL to 40,000 TL, but they do not have numerous variants. Instead, they offer several options within a limited number of variants. Most of the models catering to premium customer segments do not have more than 15 variants. There is a need for more dealer selling points in the super and emerging cities identified by Frost & Sullivan. The analysis on the EV market in Turkey forecasts that there will be 34,000 vehicles on the road by 2015.
One of the biggest challenges for automotive manufacturers is the heavy tax on passenger cars. The special consumption tax (SCT), which is levied on luxury goods, is also applied to passenger cars. This tax increases the price of cars with an engine capacity higher than 1600 cc by more than 60 per cent. Additional value-added tax (VAT) applied at 18 per cent above the SCT raises the price by more than 80 per cent for cars with an engine capacity greater than 1600 cc. As fuel prices in the country are already among the highest in the world, most consumers find the cost of owning a vehicle prohibitive. The SCT is a major source of revenue for the government, as it covers the import revenue losses after the Customs Union Agreement in 2009. However, these taxes impede automotive sales, which would otherwise foster the growth of the Turkish economy. “Cars are expensive in Turkey primarily because 70-75 per cent of the vehicles sold are imported,” notes the analyst. “With the economic growth pushing domestic demand, Frost & Sullivan believes that Turkey can produce vehicles locally to cater to the domestic market.
Product samples
A sample for this product is available. Please Login/Register to download this sample.
|
|
|
|
