Automotive Sector Turkey May 2014 Produced by: - 1 -
Table of Contents I. Sector Overview 1. Sector Highlights 2. Economic Importance 3. Main Sector Indicators 4. Automotive Sector Forecasts 5. Government Policy II. Motor Vehicle Production 1. Total Vehicle Production 2. Passenger Car Production 3. Commercial Vehicle Production 4. Leading Commercial Vehicle Producers 5. Pick-up Production 6. Bus, Midibus and Minibus Production 7. Tractor Production III.Motor Vehicle Market 1. Market Overview 2. Share of Imports 3. Passenger Car and Commercial Vehicle Market 4. Top 10 Brands in Light Vehicle Retail Sales 5. Market Shares in Passenger Cars 6. Market Shares in Light Commercial Vehicles IV.Exports 1. Motor Vehicle Exports 2. Exports Revenue 3. Biggest Exporters 4. Main Exports Markets V. Main Players 1. Largest M&A Deals from June 2013 to May 2014 2. Other Major Deals 3. Ford Otosan 4. Ford Otosan (cont d) 5. Tofas 6. Tofas (cont d) 7. Turk Traktor 8. Turk Traktor (cont d) 9. Dogus Otomotiv 10.Dogus Otomotiv (cont d) - 2 -
I. Sector Overview - 3 -
Sector Highlights Record Highs The Turkish automotive sector achieved a series of records in 2013. Annual sales of passenger cars grew by almost 20% and reached an all-time high figure of 664,655 units. Monthly passenger car sales also peaked to their highest ever level of 101,199 units in December. The local bus and minibus manufacturers achieved their highest ever production. The country's total automotive exports rose by 12% to USD 21.6bn, the highest level in five years. Expectations After the strong ending of 2013, the domestic motor vehicle sales lost ground and began to decline on an annual basis amid expectations of a slowing economic growth. Local automotive manufacturers' association OSD expects that the shrinking local demand affected by a recent consumption tax hike will make the industry more dependent on exports. In 2014, production is expected to be between 1.1 million and 1.2 million units with 810,000 to 850,000 of them bound for export. Export revenue is forecast at between USD 21bn and USD 22 bn. Future Investments Turkey's proximity to European markets and its expanding domestic market make the country of 77 million people an attractive destination for automotive investments. A number of international majors like Fiat, Ford and Toyota have already established their production bases in the country. Encouraged by a new incentive system, the producers have launched put fresh investments in capacity expansion. The latest news came from German truck maker MAN, which in May 2014 announced plans to shift its bus production from Germany to Ankara. Main Players The biggest passenger car producers are Oyak Renault, a joint venture between local army pension fund Oyak and French carmaker Renault, and Tofas, owned by Turkish industrial conglomerate Koc Holding and Italy's Fiat. The largest commercial vehicle maker is Ford Otosan, a joint company of Koc and U.S. automaker Ford Motor Co. Daimler's unit Mercedes Benz Turk is the biggest heavy truck and bus producer in the country. The industry has a total annual capacity of 1.6 million units. Employment Motor vehicle producers employed a total of 40,838 people at the end of 2010, up 3% from the previous year, however, still well below the level of 46,261 people who worked in the industry at the end of 2007. Engineers accounted for 11.3% of the total workforce in the automotive manufacturing sector at the end of 2010. - 4 -
Economic Importance Turkey automotive sector in figures 2008 2009 2010 2011 2012 2013 Automotive exports, including vehicles, parts and components, USD mn 21,050 14.286 15.771 23.146 22.939 22.369 Total Turkish exports 132,027 102,143 113,884 134,907 152,462 151,796 Automotive imports, including vehicles, parts and components, USD mn 16,935 12,464 15,019 27,278 25,541 23,937 Total Turkish imports 201,964 140,928 185,544 240,842 236,545 251,651 Capital inflow in motor vehicles industry, USD mn 71 224 38 93 121 75 Capital inflow in manufacturing, USD mn 3,972 1,640 924 3,596 4,342 2,008 Turkey s total net foreign direct investment, USD mn 19,762 8,629 9,058 16,171 13,224 12,865 GDP growth 0.7-4.8 9.2 8.8 2.1 4.0 GDP, TRY mn 950,534 952,559 1,098,799 1,297,713 1,416,798 1,561,510 GDP, USD mn 742,094 616,703 731,608 773,980 786,283 820,012 GDP per capita, USD 10,444 8,561 10,003 10,428 10,459 10,782 Annual inflation end-year, % 10.4 6.5 6.4 10.4 6.2 7.4 Source: Turkstat, Ministry of Economy - 5 -
Main Sector Indicators Turkey automotive sector 2008 2009 2010 2011 2012 2013 Total production (units) 1,171,917 884,466 1,124,982 1,234,637 1,115,233 1,166,043 Total production change, % 3.4-25 27 9.8-10 4.6 Passenger car production 621,567 510,931 603,394 639,734 577,296 633,604 Pick-up production 449,434 330,044 442,408 479,110 426,633 410,556 Truck production 36,800 8,246 23,851 37,396 29,129 30,082 Bus production 7,526 5,931 5,268 6,907 6,427 8,345 Capacity utilization, % 77 42 72 69 68 73 Total sales 526,544 575,869 793,172 910,867 817,620 893,124 Total sales change, % -17 9.4 37.7 14.8 10.2 9.2 Passenger car sales 305,998 369,819 509,784 593,519 556,280 664,655 Light commercial vehicle sales 188,025 187,307 251,129 270,920 221,481 188,723 Truck sales 26,260 14,915 28,362 40,792 34,365 31,760 Bus sales 1,739 1,623 1,525 2,532 2,410 4,027 Overall commercial vehicle sales 220,546 206,050 283,388 317,348 261,340 228,469 Number of registered passenger cars 6,796,629 7,093,964 7,544,871 8,113,111 8,648,875 9,283,923 Number of registered motor vehicles 11,548,912 11,979,335 12,670,623 16,089,528 17,033,413 17,939,447 Source: Turkstat, OSD - 6 -
Automotive Sector Forecasts Automotive sector forecats 2014f 2015f 2016f 2017f 2018f Production of commercial vehicles, units 424,459 430,226 444,728 464,405 485,322 Production of commercial vehicles, % change -13.7 1.4 3.4 4.4 4.5 Production of light commercial vehicles, units 381,060 384,725 396,925 414,078 432,338 Production of light commercial vehicles, % change -15.0 1.0 3.2 4.3 4.4 Production of heavy trucks, units 29,180 29,632 30,232 30,942 31,961 Production of heavy trucks, % change -3.0 1.5 2.0 2.3 2.4 Production of buses and coaches, units 14,219 15,869 17,572 19,386 21,293 Production of buses and coaches, % change 5.0 11.6 10.7 10.3 9.8 Sales of commercial vehicles, units 204,604 203,466 207,699 215,162 222,352 Sales of commercial vehicles, % change -8.9-0.6 2.1 3.6 3.3 Sales of light commercial vehicles, units 169,851 168,266 171,632 177,930 183,947 Sales of light commercial vehicles, % change -10.0-0.9 2.0 3.7 3.4 Sales of heavy trucks, units 30,807 30,967 31,597 32,541 33,473 Sales of heavy trucks, units, % change -3.0 0.5 2.0 3.0 2.9 Sales of buses and coaches, units 3,946 4,233 4,469 4,691 4,931 Sales of buses and coaches, % change -2.0 7.3 5.6 5.0 5.1 Source: BMI, OICA; OSD - 7 -
Government Policy New investment incentives In June 2012, Turkey introduced new incentives for the automotive industry by launching its "New Incentive System", which is designed to attract new investments, increase exports, employment and the share of domestic products. The new list of incentives includes a decrease in the minimum investment amounts to TRY 200mn from TRY 250mn for "primary industry investments" and halving of the threshold for "sub-industry investments" to TRY 50mn. The amounts for sub-industry investments which qualify investors to benefit from regional incentives was reduced to TRY 1mn. Some automotive investments were also taken into the scope of "priority investment incentive" which will allow sector companies to take advantage of the investment incentives, regardless of the location. The automotive sector is one of the main drivers of the Turkish industry and exports and has been given a prominent place in Turkey's 2023 vision. The sector is forecast to produce four million vehicles and export three million vehicles annually. New scrap incentives The government has plans to introduce in 2014 a car scrap vehicle program which will cover around two million passenger cars that are older than 20 years. The scheme will include tax reduction, cash payments and credits for the purchase of environment-friendly vehicles. The average age of vehicles driven in Turkey is 16 years while the average age of the population is 29. In 2023, the export revenues of the sector are forecast to reach USD 75bn. Source: KPMG - 8 -
II. Motor Vehicle Production - 9 -
Total Vehicle Production Motor vehicle production ( 000) 622 1,147 511 870 1,095 603 640 1,189 577 1,073 1,126 634 Turkish passenger car and commercial vehicle production rose by 5% to 1.126 million units in 2013, according to data of the Automotive Manufacturers Association (OSD). 2008 2009 2010 2011 2012 2013 Passener car Total Automotive production by vehicle (2013) The total output in 2013, including tractors, totalled 1.166 million, also up 5% from the previous year. The figure does not include production of manufacturers like Tumosan Traktor, Erkunt Traktor and Basak Traktor, which are not OSD members. Commercial vehicles 42.2% Passenger car production, which represents 54% of the total output, grew by 10% to approximately 634,000 units. The industry registered an all-time high passenger car production of 640,000 units in 2011. Passenger cars 54.3% Tractors 3.5% The highest growth was registered in the production of heavy trucks, which surged by 57% to nearly 4,500 units. Source: OSD - 10 -
Passenger Car Production Passenger car production ( 000) 622 96 511 122 603 163 640 197 577 634 164 149 2008 2009 2010 2011 2012 2013 Total Production for domestic market Turkish passenger car manufacturers produced some 149,000 units for the local market in 2013, down by 9% compared to the previous year. Some 76% of the passenger cars manufactured in 2013 were bound for export, up from 72% in 2012. The export ratio stood at 69% in 2011. Company share in passenger car production (2013) Toyota 16% Hyundai Assan 16% Oyak Renault, owned by Turkish army pension fund Oyak and France's Renault, is the biggest passenger car producer in Turkey. Oyak Renault 52% Tofas 13% Honda Turkey 2% The other local passenger car producers are Tofas, a joint venture between Turkish industrial and financial conglomerate Koc Holding and Italy's Fiat, Toyota, Hyundai Assan and Honda. Source: OSD - 11 -
Commercial Vehicle Production Total and commercial vehicle production ( 000) 1,147 526 870 359 1,095 491 1,189 549 1,073 Commercial vehicle production (2013) 1,126 496 492 2008 2009 2010 2011 2012 2013 Commerial vehicles Total (without tractors) Turkey's commercial vehicle production, excluding tractors, decreased by 1% to around 492,000 units in 2013. The highest commercial vehicle output of 549,000 units was recorded in 2011. Pick-ups hold the dominant position in Turkish commercial vehicle production. Local pick-up manufacturers made around 411,000 units in 2013, down 4% from the previous year. Pick-ups are followed by minibuses and heavy trucks with shares of 8.0% and 5%, respectively. Pick up 83% Heavy truck 5% Minibus 8% Bus 2% Light truck 1% Midibus 1.1% In 2013, the capacity utilisation rate in heavy truck manufacturing stood at 63%, compared to 75% for lights commercial vehicles and passengers cars and the average 73% for the entire motor vehicle manufacturing industry. Bus and minibus manufacturers achieved capacity utilisation rates of 93% and 77%, respectively. Source: OSD - 12 -
Leading Commercial Vehicle Producers Commercial vehicle makers by units (2013) Tofas 33% Ford Otosan 57% Karsan 3% Mercedes Benz Turk 5% Other 3% Shares of commercial vehicle makers when pick-ups excluded The biggest local commercial vehicle producers are Ford Otosan and Tofas, both part of Koc Holding's automotive division. Ford Otosan is a joint venture with Ford and produces pick-ups, minibuses and heavy trucks. Tofas produces pick-ups in addition to passenger cars. Otokar 5% Karsan 3% Mercedes Benz Turk 28% Mercedes-Benz Turk, the local unit of Germany's Daimler, manufactures trucks and buses. Ford Otosan 53% Anadolu Isuzu 6% Temsa 4% Man Turkey 2% Karsan, which ranked fourth in terms of produced units in 2013, manufactures trucks, buses and minibuses in addition to pick-ups. Source: OSD - 13 -
Pick-up Production Total and pick-up production ( 000) 1,147 1,095 1,189 1,073 1,126 870 449 330 442 479 427 411 Pick-ups are the second most produced motor vehicle in Turkey after passenger cars. 2008 2009 2010 2011 2012 2013 Total Pick-up Pick-up producers shares in output (2013) Tofas 39% Pick-up production decreased by 11% to around 411,000 units in 2013. The industry registered its highest output of some 479,000 units in 2011. The largest pick-up producers in the country are Ford Otosan and Tofas, followed by Karsan. Otokar also produced a small number of pick-ups in 2013. Ford Otosan 58% Karsan 2% Source: OSD - 14 -
Truck Production Total commercial vehicle and truck production ( 000) 526 491 549 496 492 359 Truck production rose by 3% to over 30,000 units in 2013. The industry has the capacity to produce 62,200 trucks annually. 37 8 24 37 29 30 2008 2009 2010 2011 2012 2013 Commerial vehicle Trucks Production of large trucks (12 tonnes and over) declined by 3% to around 25,600 units in 2013. Truck producers' share in output (2013) Ford Otosan 21% Output of smaller trucks (GVW 3.5-12 tons) surged by 57% to nearly 5,500 units in 2013 after a slump of 40% in the previous year. Mercedes Benz Turk 61% Karsan 3% Anadolu Isuzu 10% Temsa 4% Otokar 1% In 2013, the biggest truck producer in terms of units produces was Mercedes Benz Turk, followed by Ford Otosan and Anadolu Isuzu. Source: OSD - 15 -
2.6 7.6 5.9 5.3 2.7 3.5 6.9 6.4 4.2 5.2 8.3 10.7 Bus and Minibus Production Bus, midibus, minibus production 37.8 29.3 21.1 11.8 17.0 22.5 Turkish bus production rose to an all-time high of 8,345 units in 2013, up 30% from the previous year. 2008 2009 2010 2011 2012 2013 Shares of bus producers in output (2013) Man Turkey 16% Minbuses Bus Midibuses Otokar 15% Mercedes Benz accounted for almost half of the bus production, followed by Man and Otokar. Minibus producers also registered an all-time high output of 37,750 units in 2013, posting a 29% year-on-year growth. Ford Otosan accounted for 98% of the minibus output in 2013, followed by Karsan with 2%. Otokar manufactured 40 minibuses. Mercedes Benz Turk 48% Temsa 14% Karsan 7% Anasolu Isuzu 1% Minibus production also recorded a high growth rate of 24% to nearly 5,200 units with Otokar accounting for 51% of the output. Anadolu Isuzu had a 38% share and Temsa accounted for the remaining 11%. Source: OSD - 16 -
Tractor Production Turkish tractor production and market ( 000) 62.360.5 54.0 56.4 50.3 52.3 28.827.0 17.8 13.8 39.1 36.1 The Turkish tractor manufacturers produced 56,407 units in 2013, up 4.5% from the previous year, according to data of the Turkish Association of Agricultural Machinery and Equipment Manufacturers (Tarmakbir). 2008 2009 2010 2011 2012 2013 Production Market Share of manufacturers in tractor production (2013) Hattat Tarim 4% Other 28% The Turkish tractor market expanded by 4% to 52,285 unit in 2013. The capacity utilisation rate of Turk Traktor and Hattat Tarim, the two tractor producers, which are OSD members, decreased to 42% in 2013 from 77% in the previous year. The other tractor producers in Turkey are Tumosan Traktor, Erkunt Traktor and Basak Traktor. Turk Traktor 68% The Turkish tractor manufacturers exported 15,872 units worth USD 341mn in 2013. Exports declined 2.0% in number terms but rose by 5% in value terms. Source: Tarmakbir, OSD - 17 -
III. Motor Vehicle Market - 18 -
Market Overview Motor vehicle market in units ( 000) 527 576 793 510 911 594 818 556 893 665 The total Turkish motor vehicle market grew by 31% to around 893,000 units in 2012. The sales registered an all-time high 911,000 units in 2011. 306 370 2008 2009 2010 2011 2012 2013 Total market Passenger car Monthly motor vehicle sales monthly change (%) 45.7 47.7 39.6 31.2 24.6 32 30.1 33.8 28.6 28.1 18.5 13.5 13.2-6.8-8.4-17.8 Monthly motor vehicle sales registered an all-time high of nearly 135,600 units in December 2013. In the beginning of 2014, the market started to slow down. The total sales decreased by 7.7% on the year in the first four months of 2014. Sales of passenger cars grew by 19.5% to an all-time high 664,655 units in 2013. Monthly passenger car sales peaked to its highest ever level of 101,199 units in December 2013. The growth rate of passenger car sales slowed down to an annual 6.4% in the first four months of 2014. Source: OSD - 19 -
Share of Imports Total market and imports in units ( 000) 793 911 818 893 527 576 306 314 465 539 512 616 Imports accounted for 69% of the total motor vehicle market in 2013, up from 63% from the previous year. 2008 2009 2010 2011 2012 2013 Total market Imports An all-time high of 615,609 imported vehicles were sold in Turkey in 2013. Light vehicle market in units ( 000) 1,000 800 600 400 200 0 494 557 761 864 778 853 456 526 502 607 298 309 196 248 305 338 276 246 2008 2009 2010 2011 2012 2013 Domestically-produced Imported Total The share of imports in light vehicle sales was 71% in 2013, up from 65% in the previous year. Sales of imported light vehicles rose to all-time high 607,472 units in 2013 due to the increased passenger car sales. Source: OSD - 20 -
Passenger Car and Commercial Vehicle Market Passenger car sales ( 000) Light commercial vehicle sales ( 000) 99 306 207 126 370 244 156 510 354 665 594 556 518 414 410 179 147 147 188 187 121 97 91 66 150 251 101 159 271 112 221 189 129 92 99 90 2008 2009 2010 2011 2012 2013 Domestically-produced Imported Total 2008 2009 2010 2011 2012 2013 Domestically-produced Imported Total Comments Imports met 78% of the demand for passenger cars and represented 48% of the domestic sales of light commercial vehicles in 2013. The respective figures stood at 74% and 42% in the previous year. The sales of imported passengers cars registered all-time high 517,527 units in 2013. The sales of light commercial vehicles declined by 15% to nearly 189,000 in 2013. Source: ODD - 21 -
Top 10 Brands in Light Vehicle Retail Sales Sales of Top 10 brands in units for 2013 ( 000) 112.1 108.3 108.2 97.6 56.0 49.6 38.4 36.4 34.0 30.4 The top three best-selling brands in the passenger car and light commercial vehicles segment in 2013 were Volkswagen, Renault and Ford. Sales of Volkswagen branded passenger cars and commercial vehicles totalled some 112,000, all of them imported. Market shares of top 10 brands (2013) Sales of Renault branded passenger cars and commercial vehicles totalled some 108,300 units, including around 44,500 imported vehicles. Hyundai 5.8% Toyota 4.5% Peugeot 4.0% Opel 6.6% Dacia 4.3% Mercedez Benz 3.6% Fiat 11.4% Ford 12.7% Other 21.4% Sales of Ford vehicles stood at around 108,200, with imports accounting for 55% of the total. Fiat sold nearly 97,600 passenger cars and commercial vehicles, about 17,200 of them imported. Opel followed with almost 56,000 units sold, including some 300 made in Turkey. Renault 12.7% Volkswagen 13.1% Source: ODD - 22 -
Market Shares in Passenger Cars Shares of local producers in passenger car sales (2013) Shares of imported brands (2013) Tofas (Fiat) 27% Hyundai Assan 12% BMW 4.0% Peugeot 4.5% Toyota 4.3% Mercedes- Dacia 5.6% Benz 3.9% Hyundai 5.8% Toyota 9% Renault 6.4% Other 26.5% Oyak Renault 43% Honda Turkey 8% Opel 10.8% Ford 11.3% Volkswagen 17.1% Comments Retail sales of locally-produced passenger cars totalled 147,128 units. Oyak Renault held the largest share of 43% in the sales of Turkey-made automobiles, followed by Tofas and Hyundai Assan. Volkswagen ranked first in terms of retail sales of imported passengers cars with a with a 17.1% market share, followed by Ford and Opel with 11.3 % and 10.8%, respectively. Source: ODD - 23 -
Market Shares in Light Commercial Vehicles Shares of locally-made light commercial vehicles (2013) Shares of imported vehicles (2013) Fiat 42% Peugeot 9.3% Dacia 7.4% Citroen 6.9% Peugeot 3% Mercedes Benz 11.6% Fiat 4.0% Toyota 2.7% Mitsibishi 2.7% Isuzu 2.9% Ford 50% Citroen 4% Karsan 2% Other 1% Renault 12.8% Other 7.7% Volkswagen 26.4% Comments Retail sales of locally-produced light commercial vehicles totalled almost 99,000 in 2013. Ford Otosan and Tofas (Fiat) dominated the segment with shares of 50% and 42%, respectively. Volkswagen led in the retail sales of imported light commercial vehicles with a 26.8% market share, followed by Renault and Mercedes Benz, with 12.8% and 11.6%, respectively. Source: ODD - 24 -
IV. Exports - 25 -
Motor Vehicle Exports Total production and exports in units ( 000) 1,172 1,125 1,235 1,115 1,166 921 885 638 764 801 745 843 Turkish exports of motor vehicles rose by 13% to almost 843,500 units in 2013. Over 72% of the output was exported. 2008 2009 2010 2011 2012 2013 Total output Exports Passenger cars represented 57.4% of the total vehicle exports. Turkish produces exported 484,500 passengers cars in 2013, up 17% compared with previous year. Exports by vehicle type (2013) Commercial vehicles 41% Commercial vehicle exports increased by 9% to 344,000 units in 2013. Of these, nearly 301,000 were pick-ups. Truck exports declined by 3% to some 15,000 units. Passenger cars 57% Tractors 2% Exports of minibuses were the fastest growing segment. They surged by 111% to about 34,700 units. Source: OSD - 26 -
Exports Revenue Automotive exports in value (USD bn) 22.0 15.1 14.9 9.9 17.5 10.9 20.4 12.1 19.3 11.1 21.6 12.5 The value of Turkish automotive exports, including vehicles, parts and components, rose by 12% to USD 21.6bn in 2013, according to data of Turkey's Automotive Industry Exporters Union (OEIB). 2008 2009 2010 2011 2012 2013 Total auto exports Vehicles Breakdown by vehicle type (2013) Trucks and pick-ups 31.4% The automotive industry accounted for 14% of the country's entire exports in 2013, ranking first in value terms, followed by the chemicals and textiles industries. Vehicle exports increased by 13% to USD 12.5bn in 2013, while parts and components exports grew by 10% to USD 9.1bn. Passenger cars 54.9% Buses 7.5% Tractors 2.7% Other 3.6% Exports of passenger cars grew by 13% in value to USD 6.9bn and represented 55% of total vehicle exports in 2013. Source: OEIB - 27 -
Biggest Exporters Biggest exporters by units ( 000) 2013 266.5 208.7 160.3 86.9 85.5 14.4 10.1 5.3 2.1 Oyak Renault kept its leading export position in 2013. The company sold over 266,500 units abroad, up by over 17% from the previous year. Ford Otosan came second as it increased its exports by 9% to 208,700 units. Shares of auto exporters (2013) Tofas 19.0% Tofas ranked third with 160,300 exported units, up by 4% from 2012. Ford Otosan 24.7% Oyak Renault 31.6% Toyota 10.3% Hyundai Assan 10.3% Turk Traktor 1.7% Other 3.2% The list of top five exporters also includes Toyota and Hyundai Assan with 86,900 and 85,500 units, respectively. Source: OSD - 28 -
Main Exports Markets Top 10 markets for 2013 ( 000 USD) Share of biggest markets (2013) 3,052 2,403 2,120 1,710 Romania 2.7% Slovenia 2.4% USA 3.6% Spain 3.6% Belgium 4.6% Russia 5.4% Other 34.1% 1,160 972 772 761 576 509 Italy 8.0% UK 9.9% Germany France UK Italy Russia Belgium Spain USA Romania Slovenia France 11.3% Germany 14.3% Comments Germany is the biggest market for the Turkish automotive exports. In 2013, Turkey exported vehicle, parts and components worth USD 3.05bn to Germany, up 4.5% from the previous year. Exports to France rose by 3.5% to USD 2.4bn and shipments to the UK surged by 55.5% to USD 2.1bn making it the third biggest international market for the Turkish automotive industry. The only two shrinking markets for the Turkish automotive companies among the top 10 were Italy and the United States. Exports to Italy edged down 0.2% to USD 1.7bn, while exports to the United States declined by 10.8% to USD 761mn. Source: TIM - 29 -
V. Main Players - 30 -
Largest M&A Deals from June 2013 to May 2014 M&A Activity Date Target Company Deal Type Stake % Buyer Country of Buyer Deal Industries Deal Value USD (mn) May-14 BMC Privatization 100 Ethem Sancak - private investor Turkey Motor Vehicle Manufacturing 356 Oct-13 Mutlu Holding Acquisition 100 Metair Investments Limited South Africa Motor Vehicle Parts Manufacturing 217 Mar-14 Mutlu Aku Tender offer 21 Metair Investments Limited South Africa Motor Vehicle Parts Manufacturing 50 Mar-11 Titan Jantsa Acquisition 50 Titan Europe plc United Kingdom Motor Vehicle Parts Manufacturing 12 Sep-13 Tuvturk Istanbul Minority stake purchase 17 Tuvturk Guney; Tuvturk Kuzey Turkey Automotive Repair and Maintenance 5 Sep-13 Jantsa Block trade 2 Global Emerging Markets Group (GEM) United States Motor Vehicle Parts Manufacturing 3 Aug-12 Jantsa IPO 3 Institutional and private investors Turkey Motor Vehicle Parts Manufacturing 2 May-12 TT Motor Minority stake purchase 25 Fatma Neslihan Telli - Turkey private investor Motorcycle, Bicycle, and Parts Manufacturing 2 Dec-11 TT Motor Minority stake purchase 25 Gurtas Tarim Urunleri Turkey Motorcycle, Bicycle, and Parts Manufacturing 2 Jun-13 Yoyo Minority stake purchase 25 Partner Fleet Solutions Turkey Passenger Car Rental and Leasing 1 Source: EMIS DealWatch - 31 -
Other Major Deals Other Major Deals Date Country of Seller Target Company Deal Type Stake % Buyer Country of Buyer Deal Industries Deal Value Apr-12 Spain Kaufil Sealing Technologies Acquisition 49 Standard Profil Turkey Motor Vehicle Parts Manufacturing n.a. Jan-12 China Fuzhou Rocket Enterprises Acquisition Orhan Holding Turkey Motor Vehicle Parts Manufacturing n.a. Jan-13 Germany Mercedes-Benz hydraulic steering systems assets Acquisition 51 Hema Endustri Turkey Motor Vehicle Parts Manufacturing n.a. Jan-13 Turkey Standard Profil Acquisition 40 Actera Group Turkey Motor Vehicle Parts Manufacturing n.a. Jun-13 Mexico Hydraulic hose production plant Acquisition 100 Orhan Holding Turkey Motor Vehicle Parts Manufacturing n.a. Oct-12 Turkey Genel Servis Acquisition 100 Mapfre Spain Automotive Repair and Maintenance n.a. Feb-14 Turkey STG Otomotiv; Sila Teknik Acquisition 100 Orhan Holding Turkey Motor Vehicle Parts Manufacturing n.a. Feb-14 Turkey Autoking Acquisition n.a. Pera Capital Turkey Automotive Repair and Maintenance n.a. Mar-13 Germany TrelleborgVibracousticcommerci al vehicle air springs business Merger HSS Otomotiv Germany; Turkey Motor Vehicle Parts Manufacturing n.a. Feb-14 Turkey Martur Sunger Minority stake purchase n.a. Ustunberk Holding Turkey Motor Vehicle Parts Manufacturing n.a. Source: EMIS DealWatch - 32 -
Ford Otosan Financial performance (TRY mn) Highlights 10,445 9,768 11,405 Ford Otosan makes pick-ups, minibuses and trucks. The company was founded in 1959 as a joint venture between Turkish conglomerate Koc Holding and Ford. Ford Otosan shares are listed on Borsa Istanbul stock exchange. 662 875 685 772 641 856 2011 2012 2013 In May 2014, Ford Otosan opened its third factory in which the company invested USD 511mn and which raised its annual capacity in Kocaeli to 400,000 units. The company s truck plant in Inonu has an annual capacity of 11,000 units. Exports 64% Revenues Net profit EBIDTA Revenues (2013) Domestic 36% Ford Otosan is the largest motor vehicle seller on the domestic market with a 12.9% share in 2013. The company holds an 8.3% market share in passenger cars, ranking third largest player in the segment for 2013. Ford Otosan ranks second in the light commercial vehicle segment with a market share of 20.7% and is first in the medium commercial vehicles segment with 33.2%. Ford Otosan is also the second largest seller of trucks with a 21.3% share. The company's main exports markets are North America, UK, Germany, and France. Source: Company data - 33 -
Ford Otosan (cont'd) Sales units ( 000) Retail sales units ( 000) 142 213 205 227 112 114 141 111 114 2011 2012 2013 Domestic Exports Export revenues (USD bn) 2011 2012 2013 Production units ( 000) 3.8 296 3.5 3.2 272 281 2011 2012 2013 2011 2012 2013 Source: Company data - 34 -
Tofas Financial performance (TRY mn) Highlights 7,336 6,705 7,038 492 806 834 817 442 434 2011 2012 2013 Revenues Net profit EBIDTA Tofas produces passenger cars and pick-ups. The company was founded in 1968 as a joint venture between Turkish conglomerate Koc Holding and Italian automaker Fiat. Currently, each partner owns 37.9% of Tofas and the rest is publicly held. The company is listed on the Istanbul and Luxembourg stock exchanges. Major indicators 2011 2012 2013 Gross margin 11.7 12.4 12.4 Operating margin 6.7 7.9 5.3 Profit before tax margin 6.9 7.4 6.8 Net margin 6.2 6.6 6.2 Tofas' production plant is located in the northwestern industrial city of Bursa and has an annual capacity of 400,000 units, the highest in Turkey. Fiat ranked fourth on the Turkish motor vehicle market with a market share of 11.4% in 2013. It was second in light commercial vehicle sales with a market share of 25.1% and fifth in the passenger car market with a 7.6% share. EBITDA margin 10.7 13.1 9.9 Source: Company data - 35 -
Tofas (cont'd) Total sales in units (2013) Exports in units (2013) Light commercial vehicles, 170,196 Passenger cars, 97,015 Light commercial vehicles, 116,842 Passenger cars, 43,477 Domestic sales in units (2013) Exports by country (2013) Passenger cars, 53,538 Germany 7.5% UK 13.5% Belgium 4.4% Spain 5.7% Rest of Europe 13.1% South America 10.2% MENA 7.8% Light commercial vehicles, 53,354 France 10.4% Italy 20.9% Other 6.5% Source: Company data - 36 -
Turk Traktor Financial performance (TRY mn) Highlights 1,801 1,974 2,175 Turk Traktor produces tractors and imports combines, cotton pickers and other farming equipment as well as construction equipment. 277 322 268 313 280 349 2011 2012 2013 Revenues Net profit EBIDTA Revenue breakdown (2013) The company, which employs around 2,600 people, is a joint-venture between Turkish conglomerate Koc Holding and Case New Holland. In 2007, Turk Traktor merged with tractor importer New Holland Trakmak. Exports 32% Turk Traktor has a market share of 49% in Turkey and has an annual production capacity of 35,000 tractors and 25,000 engines. Domestic 68% The company's shares are listed on Borsa Istanbul stock exchange. Source: Company data - 37 -
Turk Traktor (cont'd) Total sales units Exports by brands in units (2013) NH 79.1% 31,152 25,597 24,624 9,601 14,565 14,402 2011 2012 2013 Exports Domestic Case IH 20.9% Domestic sales by brands units (2013) Production in units 40,630 39,574 38,530 NH local 88.1% Case IH local 9.8% NH imported 1.8% Case IH imported 0.4% 5,466 5,192 3,698 2011 2012 2013 Tractor Transmission Source: Company data - 38 -
Dogus Otomotiv 4,808 Financial performance (TRY mn) 5,132 6,602 Highlights Dogus Otomotiv is the leading motor vehicle importer in Turkey. It distributes 14 brands in the country, including Bentley, Bugatti, Seat and Skoda. 142 260 256 331 225 337 2011 2012 2013 The company was established in 1993 by Turkish conglomerate Dogus Group to distribute the Volkswagen, Audi and Porsche brands. Net sales Net profit EBIDTA Total new vehicle sales units ( 000) 154.0 125.8 112.3 Dogus Otomotiv was the biggest passenger car retailer in the country in 2013 with a market share of 19.3%. The company had the largest share of 17.8% in the combined light vehicle market, including light commercial vehicles. Dogus Otomotiv ranked third in the light commercial vehicle market segment. The company is listed on the Borsa Istanbul stock exchange, where 34.5% of its share capital is in free float. 2011 2012 2013 Dogus Group is also active in finance, construction, media, tourism, property, energy and food services. Source: Company data - 39 -
Dogus Otomotiv (cont'd) New passenger car sales in units ( 000) New premium car sales in units ( 000) 112.3 125.8 154.0 12.6 15.1 15.6 2011 2012 2013 New commercial vehicle sales in units ( 000) 2011 2012 2013 Used car sales in units ( 000) 27.2 25.9 15.6 17.0 20.2 24.1 2011 2012 2013 2011 2012 2013 Source: Company data - 40 -
Contact: Corporate Headquarters Nestor House Playhouse Yard London EC4V 5EX UK Voice: +44 207 779 8471 Fax: +44 207 779 8224 Americas Headquarters 225 Park Avenue South New York, New York 10003 US Voice: +1 212 610 2900 Fax: +1 212 610 2950 Asia Headquarters Eucharistic Congress Bldg. No. III 4th Floor, 5 Convent Street Mumbai 400 001 India Voice: +91 22 22881123 Fax: +91 22 22881137 Disclaimer: The material is based on sources which we believe are reliable, but no warranty, either expressed or implied, is provided in relation to the accuracy or completeness of the information. The views expressed are our best judgment as of the date of issue and are subject to change without notice. EMIS and Euromoney Institutional Investor PLC take no responsibility for decisions made on the basis of these opinions. A Euromoney Institutional Investor company. About EMIS Insight EMIS Insight is a unit of EMIS that produces proprietary strategic research and analysis. The service features market overviews, industry trend analysis, legislation and profiles of the leading sector companies provided by locally-based analysts. About EMIS Founded in 1994, EMIS (formerly known as ISI Emerging Markets) was acquired by Euromoney Institutional Investor PLC in 1999. EMIS works from over 15 offices around the world to deliver electronic information products, by subscription, to institutional customers globally. EMIS provides hard-to-get information covering more than 100 emerging markets. Its flagship products are EMIS Intelligence and EMIS Professional. EMIS clients include top investment banks, corporations, law firms, consultants, investment and insurance companies, universities and libraries, multilateral organizations, and others. - 41 -