The Turkish automotives market suffered from high interest rates in the first half of 2019 but began to recover in the second half of the year.

Total sales in the Turkish retail passenger car and light commercial vehicle (LCV) markets in 2019 were down by 22.8% as compared with 2018 and amounted to 479,060 units. Passenger car sales declined by 20.4% (387,256 units sold) while light commercial vehicle sales fell by 1.8% (91,804 units sold).

With sectoral demand in the first half of 2019 adversely impacted both by high interest rates and by the attrition in the value of the Turkish lira, there was a 45.7% contraction in total light commercial vehicle sales. Neither a change (which remained in effect from the last quarter of 2018 and until midyear 2019) in the assessment base on which the special consumption tax is calculated, nor tax relief in the form of lower tax rates, nor a rebate (which remained in effect until year-end) for scrapping superannuated cars sufficed to fully counteract the market contraction although such measures were observed to help somewhat. Aided by declining interest rates, by efforts to stabilize the Turkish lira, and by low base effects however, a year-on-year recovery in demand appeared to be taking hold in the last four months of 2019.

In 2019 the Egea Sedan once again led the field as Turkey’s best-selling car for the fourth year in a row while Fiat itself rose to the position of market leader with the biggest share of total automobile sales in the country.

Turning now to automotives markets outside Turkey, the combined (EU + European Free Trade Association countries) European automobile market only marginally bettered its 2018 performance, growing by just 1.2% in 2019. In its light commercial vehicle market, a 2.8% rate of growth was registered. The Fiat Egea family, whose members are sold in Europe under the “Fiat Tipo” name, continued to perform successfully there.

-22.8%Turkish retail automobile and light commercial vehicle market sales numbered 479,060 units, down 22.8% as compared with 2018.

TOTAL DOMESTIC MARKET (UNITS)	2018	2019	CHANGE %
Automobiles	486,321	387,256	-20.4%
Light Commercial Vehicles	134,616	91,804	-31.8%
Total	620,937	479,060	-22.8%

The Fiat Egea Sedan once again led the field as Turkey’s best-selling car for the fourth year in a row.

 

DOMESTIC MARKET RETAIL SALES

Retail domestic market sales of passenger cars were down by 20.4% year-on and amounted 387,256 units. Tofaş’s Fiat, Fiat Professional, Jeep, Alfa Romeo, Maserati, and Ferrari brands sold a total of 59,602 units, giving them an overall market share of 15.4%. By outperforming the sector as a whole, these sales boosted the company’s overall passenger car market share by 630 basis points year-on.

Fiat’s share of domestic market automobile sales in 2018 was 8.6%. The successful performance of the Egea family last year increased that share to 14.8% and advanced the Fiat brand to the position of automobile market leader in 2019. The sale of 52,206 Fiat Egea Sedans made that model Turkey’s best-selling car for the fourth year in a row. Overall automobile market share was also boosted by sales of the company’s Fiat Egea Hatchback and Station Wagon models.

Looking now at the light commercial vehicle market, we see that it shrank by 31.83% year-on in 2019 and amounted to 91,804 units sold. Although Tofaş’s own sales to this market were down by 32.8%, the company nonetheless maintained its second-position market share at 21.1%. Despite a 31% year-on contraction in Doblò and Fiorino sales, Fiat continued to successfully defend its leading position in the LCV segment.

Turkey’s automotives retail market in 2019 reached 479,060 units, of which 76,251 bore a Fiat badge. The company thus controlled a 15.9% market share, 4.60 percentage points higher than what it was the year before, and rose to the position of automobile and light commercial vehicle market leader as measured by total sales.

With the inclusion of Tofaş’s Fiat, Fiat Professional, Jeep, Alfa Romeo, Maserati, and Ferrari marques, the company’s overall market share was 16.4% while its total sales amounted 78,692 units. In 2017 these figures were 11.7% and 72,674 units respectively.

16.4%With the sale of 78,692 Fiat, Fiat Professional, Alfa Romeo, Jeep, Ferrari, and Maserati vehicles, Tofaş commanded a 16.4% share of the overall automobile market last year.

TOFAŞ’S DOMESTIC MARKET RETAIL SALES (UNITS)	2018	2019	CHANGE %
Automobiles	44,374	59,602	34.3%
Light Commercial Vehicles	28,390	19,090	-32.8%
Total	72,764	78,692	8.1%

Tofaş exported a total of 194 thousand vehicles in 2019.

EXPORTS

The combined (EU + European Free Trade Association countries) European automobile market was slightly (1.2%) bigger in 2019 than it was the year before. Detailing this performance on the basis of the biggest national markets, we see while that relatively stronger rates of growth were witnessed in Germany (5%) and France (1.9%), demand in the Spanish and UK markets was down year-on by 4.8% and 2.4% respectively. The hefty (21.7%) surge in European automobile sales that was experienced in December 2019 is attributable to future demand being shifted forward in anticipation of the introduction of new European emission standards that go into effect in 2020.

Turning now to Europe’s light commercial vehicle market, we see that there was a 2.3% rate of growth in 2019. All major national markets performed well, with growth rates of 7.4%, 4.3%, and 4.1% being registered in Germany, Italy, and France respectively.

Owing to a 20.4% year-on contraction in its export sales, Tofaş completed 2019 with a total of 194,145 units shipped abroad. When the effects of the expiration of the company’s Opel/Vauxhall contract in 2018 are factored out however, the 2019 contraction was a somewhat less disappointing 16.3%. In the event, Tofaş commanded a 15.3% share of Turkey’s automotives exports in 2019.

The 2019 year-on declines in the company’s exports of automobiles and light commercial vehicles were almost the same: close to 20% in the case of the former and around 21% in the case of the latter.

In view of these sales results, Tofaş’s export earnings were down by 8% year-on in 2019 and weighed in at TL 13,301 million in value.

-8.0%Tofaş’s export earnings were down by 8% year-on in 2019.

EXPORT SALES (UNITS)	2018	2019	CHANGE %
Passenger Cars	133,362	107,189	-19.6%
Light Commercial Vehicles	110,471	86,956	-21.3%
Total	243,833	194,145	-20.4%

PRODUCTION

Tofaş 2019 yılında 264.197 adet araç üreterek, Türk otomotiv sanayi üretiminin %18’ini tek başına gerçekleştirmiştir.

In 2019 Tofaş singlehandedly accounted for an 18% share of the Turkish automotive industry’s total output.

PRODUCTION (UNITS)	2018	2019
Egea Sedan	55,901	72,984
Egea Hatchback & Station Wagon	91,958	73,119
Doblò	104,198	76,529
MCV	49,693	41,565
Total	301,750	264,197

UNIT SALES AND TURNOVER PERFORMANCE

Tofaş increased its domestic-market passenger car sales as a result of the successful performance of its Egea family.

SALES (TL THOUSAND)	2018	2019	CHANGE %
Export Sales	14,455,023	13,301,313	-8.0%
Domestic Sales	3,934,701	5,355,308	36.1%
Other Income from Operational Activities	213,607	240,293	12.5%
Total	18,603,311	18,896,914	1.6%

 

SALES (UNITS)	DOMESTIC SALES		CHANGE	EXPORT SALES		CHANGE	TOTAL		CHANGE
	2018	2019	%	2018	2019	%	2018	2019	%
Passenger Cars	42,062	58,329	38.7	133,362	107,189	-19.6	175,424	165,518	-5.6
Light Commercial Vehicles	25,604	18,845	-26.4	110,471	86,956	-21.3	136,075	105,801	-22.2
Total	67,666	77,174	14.1	243,833	194,145	-20.4	311,499	271,319	-12.9

 

SALES (UNITS)	2018	2019	CHANGE (UNITS)
Domestic Sales	67,666	77,173	9,507
Manufactured	61,729	72,390	10,661
Linea	1,461	0	-1,461
Egea	32,986	51,565	18,579
Egea	2,403	3,071	668
Doblò	11,709	9,515	-2,194
Fiorino	13,170	8,239	-4,931
Imported	5,937	4,783	-1,154
Ducato	2,221	1,675	-546
Fiat 500	762	700	-62
Jeep®	2,402	1,929	-473
Fullback	135	55	-80
Grande	79	0	-79
Alfa	189	219	30
Panda	75	137	62
Maserati	46	48	2
Ferrari	18	20	2
Fiat	10	0	-10
Export Sales	243,833	194,146	-49,687
Tipo	24,600	23,160	-1,440
Tipo HB and SW	89,578	70,041	-19,537
Doblò	65,077	56,059	-9,018
GM	11,956	0	-11,956
Ram	15,774	11,340	-4,434
Minicargo	36,811	33,504	-3,307
Others	37	42	5
Total	311,499	271,319	-40,180

 

INVESTMENTS AND R&D EXPENDITURES

Tofaş’s investments in 2019 amounted to EUR 106.6 million in value. The biggest share of Tofaş’s total investments in 2019 went to the company’s Egea Project.

2019 INVESTMENTS	EUR (MILLION)
New Doblò	25
Egea Family	52
Minicargo	12
Structural	18
Total	107

Tofaş registered historically high levels in all income items in 2019.

PROFITABILITY

Tofaş registered historically high levels in net profit in 2019. The company’s net profit increased by 11.4% year-on and amounted to TL 1,481 million while its consolidated pre-tax profit was up by 12.8% and weighed in at TL 1,457 million. Tofaş’s EBITDA declined by 1% year-on and was recorded as TL 2,480 million.

YEARS	EBITDA		PROFIT BEFORE TAX		NET PROFIT
	TL thousand	Change %	TL thousand	Change %	TL thousand	Change %
2015	1,068,080	28.3%	617,987	30.90%	830,801	44.70%
2016	1,366,527	27.9%	797,936	29.10%	970,228	16.80%
2017	2,001,455	46.5%	1,229,472	54.10%	1,282,818	32.20%
2018	2,532,578	24.4%	1,290,894	5%	1,330,423	3.7%
2019	2,479,757	-2.1%	1,456,555	12.8%	1,481,639	11.4%

Net profit was up by 11.4% in 2019 and amounted to TL 1,482 million.

 

Pre-tax profit increased by 12.9% and reached TL 1,457 million in 2019.

 

Down by 2.1% in 2019, EBITDA weighed in at TL 2,480 million.

 

AUTOMOTIVES INDUSTRY 2020 OUTLOOK

	2019 Realization	2020
Total automotive market (units)	479,060	560,000-600,000
Retail sales (units)	78,692	78,000-84,000
Export sales (units)	194,145	170,000-190,000
Production (units)	264,197	240,000-265,000
Investment outlays (fixed asset) (EUR million)	106.6	250.0