Electric Automotive Market Guide

An Expert's View about Automobile in Turkey

Last updated: 31 Aug 2011

Summary
The Turkish automotive industry is set to become a production hub for the supply of electric vehicles and parts to Europe, Middle East, Central Asia, and North Africa. Turkey benefits from its strategic location at the crossroads of Europe and Asia, and also from the very well-established auto and parts production already in the country. Some international brands, like Renault and Fiat, have already started production plans in Turkey.

Turkey does not produce its own brand. The only brand Turkey produced in the past was an automobile named “Anadol”, but it was only sold in the local market. With the introduction of all international brands to Turkish customers, Anadol quickly faded away due to its low technological quality in comparison to international brands. Existing government bodies are trying to encourage Turkish vehicle producers to start a new local brand, but companies are not willing to invest in the high R&D and launching & marketing costs needed for such a production, in an already competitive market. However, some Turkish officials see an opportunity for creating a local electric vehicle brand, since all international producers are also at the starting phase of production, and competition may be more fair compared to already established brands.

Turkish consumers are very receptive to high-tech products, and electric vehicles are a very new market that they are keen to invest in. As soon as the nationwide charging infrastructure is ready for electric vehicles, Turkish people would also be ready to buy electric vehicles. Turkish consumers benefit from the low running cost of the electric vehicles, and cheaper maintenance fees, since lubricant and belt changes are not necessary. If the local authorities support electric vehicles by tax reductions, which is likely, that would be an additional incentive for Turkish consumers to buy. On the other hand, it is clear that this technology is still highly costly for the average consumer; vehicle travel range for each charge is limited and charging time is too long at this stage.


Market Data
Most international vehicle producers already have production in Turkey. Currently, there are 13 global vehicle producers in the Turkish market including; Ford, Toyota, Renault, Fiat, Honda, Hyundai, Peugeot, MAN, Mercedes, Isuzu, and Mitsubishi, through joint venture (JV) partnerships with local firms, direct investment, or license agreements.

Turkish automotive production reached 1.2 million units, and is targeting 2 million in 2015.
In the European Union in 2010, Turkey ranked as the:
• Largest LCV producer
• Second largest bus producer
• Ninth largest truck producer
• Seventh largest in total vehicle production, and
• Turkey is the 16th largest vehicle producer on the world (with 1,120,000 units of production in 2010).

Turkey is quickly becoming a production base for commercial vehicles. Ford already has a strong commercial vehicle manufacturing presence in addition to its strong position in the passenger car market, and the line keeps attracting new manufacturers. In July 2010, MWM, the South American affiliate of US truck maker Navistar, partnered with the Turkish bus maker Otokar to produce diesel engines in the country. By 2014, commercial vehicle production is expected to reach an annual capacity of 700,000 vehicles.

The Turkish automotive parts/service equipment industry has expanded, as Turkish automotive production and imports have increased. Today, the Turkish automotive and parts industry has become an integrated part of the global automotive and parts industry. The Turkish auto parts industry manufactures parts for vehicle manufacturers in the Turkish market and in foreign partner countries, as well as producing parts for the aftermarket in all markets. With its high production capacity, high standards, and a wide variety of products manufactured, automotive exports in Turkey now rank first in total exports from Turkey, ahead of traditional exports such as textiles and apparel.

In 2010, the number of vehicles in Turkey reached 12.7 million. With the increasing number of vehicles on roads, studies to decrease gas emissions that the vehicles generate have become very important. Experts are now looking over a variety of ways to decrease emissions, including hybrid and electric vehicles. Electric and hybrid vehicles are highlighted as an alternative for curbing pollution to reach aimed CO2 emission values in 2012 and after. Turkey, as a member of the United Nations, is also affected by the United Nations Framework Convention on Climate Change, Kyoto Protocol and recently, the Copenhagen Agreement.

Consumers are not expected to switch and start using electric vehicles immediately. Electric vehicles will bring changes in consumer habits, the need for infrastructure, and a higher purchasing cost due to high battery costs. Therefore, using of electric vehicles will need to be supported by new investments, like easier parking opportunities, letting only electric vehicles to certain areas, free or lower bridge pass fees. The Electric Vehicles Working Group of the Turkish Automotive Technology Platform, which is established to provide consultancy to the Turkish officials, also suggests the Turkish government to provide incentives to the R&D activities in the electric vehicles market in Turkey, which plans to be a competitive production base for the automotive industry.

Industry experts in Turkey expect that a total of 20 - 30,000 EVs will be on roads in the country by the end of 2015. Experts also believe that by 2020, 10% of total automobiles sales will be EVs.

Turkish experts believe that such projects will firm up Turkey’s position as one of the most competitive electric (EV) production bases. Import models will also find a good market in Turkey, too. Chevrolet is expected to present its first electric vehicle, Volt, in the last quarter of 2011, and Opel will bring its first electric vehicle, Ampera, end of 2011 or beginning of 2012. However, both firms also state that depending on how things go with the infrastructure plans, timings might change.

New generation electric vehicles battery systems and electric motors will replace the conventional internal combustion engines and related components. The battery system, electric motors and charging equipment will be around 65% of the total cost of the vehicle. The battery system is around 40%. If the local producers cannot complete innovation projects for these, then the Turkish industry will be relying heavily on supplies from abroad. Therefore, suppliers are trying to support R&D activities in battery cell chemicals, battery modules, battery control systems, electric motors and charging units.
Best Prospects
Parts for hybrid and electric vehicles for both OEM and for aftermarket products like batteries (The battery is the heart of every electric vehicle. Renault is planning to power its products by lithium-ion batteries supplied by the Nissan-NEC joint venture (AESC), which started production at a Nissan production plant in Japan in 2009).

Best prospects also include
• Electric energy storage systems like ultra capacitors
• Electric machinery and drivers for electric drives
• Electronic control units like electric vehicle control units
• Battery control units for different systems to communicate
• Control, power electronic units for charging within vehicle and from the network
• Electric drive concepts
• Electric drive auxiliaries.

Read the full market research report


Posted: 31 August 2011, last updated 31 August 2011

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