TURKEY’S AUTOMOTIVES MARKET WAS ADVERSELY AFFECTED BY HIGHER INTEREST RATES IN 2018.

Total sales in the Turkish retail passenger car and light commercial vehicle (LCV) markets in 2018 were down by 35.1% as compared with 2017 and amounted to 620,937 units. Passenger car sales declined by 37.7% (486,321 units sold) while light commercial vehicle sales fell by 42.3% (134,616 units sold).

Interest rates, which began to rise markedly in the second half of 2018 combined with attrition in the value of the Turkish lira had an adverse impact on demand in the sector. In late September, the assessment base on which special consumption tax is calculated was revised and this had the effect of reducing the amount of tax that was charged. Although reductions in both SCT and VAT rates which went into effect at the beginning of November and which will remain in force until the end of March 2019 alleviated the sector’s distress to a degree, they were insufficient to prevent the overall contraction.

Fiat Egea Sedan was Turkey’s best-selling car for the third year in a row in 2018. Thanks to the contributions of the Egea family to Tofaş’s success, the company’s share of the passenger car market increased even though the Linea family is no longer being produced.

Turning now to international automotive markets and sales, 2018 performance in the combined European passenger car market (EU + EFTA) paralleled that of 2017 with LCV sales actually growing by 3.1% year-on. The Fiat Egea family, whose members are sold in Europe under the “Fiat Tipo” name, continued to perform successfully there.

-35.1% TOTAL SALES IN THE TURKISH RETAIL PASSENGER CAR AND LIGHT COMMERCIAL VEHICLE (LCV) MARKETS IN 2018 WERE DOWN BY 35.1% AS COMPARED WITH 2017 AND AMOUNTED TO 620,937 UNITS.

TOTAL DOMESTIC MARKET (UNITS)	2017	2018	CHANGE %
Automobiles	722,759	486,321	-32.7%
Light Commercial Vehicles	233,435	134,616	-42.3%
Total	956,194	620,937	-35.1%

WITH SALES ON THE ORDER OF 34 THOUSAND UNITS, FIAT EGEA SEDAN WAS TURKEY’S BEST-SELLING CAR FOR THE THIRD YEAR IN A ROW IN 2018.

 

DOMESTIC MARKET RETAIL SALES

Retail domestic market sales of passenger cars were down by 32.7% year-on and amounted 486,321 units. Tofaş’s Fiat, Fiat Professional, Jeep, Alfa Romeo, Maserati, and Ferrari brands sold a total of 44,374 units, giving them an overall market share of 9.1%. By outperforming the sector as a whole, these sales boosted the company’s overall passenger car market share by 30 basis points year-on.

In 2017 Fiat’s share of the domestic passenger car market was 8.5%. Thanks to the successful performance of the Fiat Egea family in 2018, that share edged up slightly to 8.6% even though production of the Linea family had ceased. With sales on the order of 34 thousand units, Fiat Egea Sedan was Turkey’s best-selling car for the third year in a row in 2018. Fiat Egea Hatchback and Station Wagon models also made their contributions to the company’s overall passenger car market share.

Looking now at the light commercial vehicle market, we see that it shrank by 42.3% year-on in 2018 and amounted to 134,616 units sold. Although Tofaş’s own sales to this market were down by 51.6%, the company nonetheless maintained its second-position market share at 21.1%. Despite a 51% year-on contraction in Doblò and Fiorino sales, Fiat continued to successfully defend its leading position in this segment.

In 2018 Fiat controlled an 11.3% share of the Turkish automotive retail market by selling 70,058 of the total 620,937 units that were sold. With this performance, the company maintained its second-place ranking in total passenger car and LCV sales.

With the inclusion of Tofaş’s Fiat, Fiat Professional, Jeep, Alfa Romeo, Maserati, and Ferrari marques, the company’s overall market share was 11.7% while its total sales amounted 72,764 units. In 2017 these figures were 12.8% and 122,818 units respectively.

+11.7% WITH THE INCLUSION OF THE FIAT, FIAT PROFESSIONAL, JEEP, ALFA ROMEO, MASERATI, AND FERRARI MARQUES, TOFAŞ’S MARKET SHARE WAS 11.7% WHILE ITS TOTAL SALES AMOUNTED 72,764 UNITS.

TOFAŞ’S DOMESTIC MARKET RETAIL SALES (UNITS)	2017	2018	CHANGE %
Automobiles	64,133	44,374	-30.8%
Light Commercial Vehicles	58,685	28,390	-51.6%
Total	122,818	72,764	40.8%

IN 2018 TOFAŞ’S EXPORTS VOLUME WAS RECORDED AS 244 THOUSAND UNITS.

EXPORTS

The 2018 situation in the combined European passenger car market (EU + EFTA) was similar to that of 2017. Detailing the market’s performance on an individual country basis we see that there were single-digit growth rates in all the main national markets other than those of the UK and Italy. After three quarters of growth in the first nine months of the year however, there was a net contraction in the last quarter owing most likely to the changeover to WLTP (Worldwide Harmonized Light Vehicles Test Procedure) rules.

The European LCV market by comparison registered an aggregate 3.1% rate of growth in 2018. Nearly all the continent’s main national markets performed well enough last year, the two principal exceptions again being the UK (down 1.3% owing to Brexit issues) and Italy (down 6.0% owing to general economic malaise).

In 2018 Tofaş saw its export performance falter somewhat: the 243,833 units that the company shipped abroad corresponded to a 9.9% twelve-month contraction. These results gave Tofaş an 18.5% share of Turkey’s 2018 exports as measured by volume.

As for Tofaş’s export earnings, these were up by 21.6% year-on and weighed in at around TL 14,455 million in value.

+21.6% IN 2018 TOFAŞ’S EXPORT EARNINGS WERE UP BY 21.6% YEAR‑ON.

EXPORT SALES (UNITS)	2017	2018	CHANGE %
Passenger Cars	152,089	133,362	-12.3%
Light Commercial Vehicles	118,671	110,471	-6.9%
Total	270,760	243,833	-9.9%

PRODUCTION

In 2018 Tofaş produced 301,750 vehicles, a performance that singlehandedly corresponded to a 19% share of the Turkish automotive industry’s total output last year.

IN 2018 TOFAŞ PRODUCED 301,750 VEHICLES, A PERFORMANCE THAT SINGLEHANDEDLY CORRESPONDED TO A 19% SHARE OF THE TURKISH AUTOMOTIVE INDUSTRY’S TOTAL OUTPUT LAST YEAR.

PRODUCTION (UNITS)	2017	2018
Linea	9,801	-
Egea Sedan	76,194	55,901
Egea Hatchback & Station Wagon	102,425	91,958
Doblò	116,891	104,198
MCV	78,863	49,693
Total	384,174	301,750

TOFAŞ DEFENDED ITS STRONG POSITION IN DOMESTIC PASSENGER CAR SALES THANKS TO THE SUCCESSFUL PERFORMANCE OF THE EGEA FAMILY IN 2018.

UNIT SALES AND TURNOVER PERFORMANCE

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

In 2018 Tofaş exported a total of 243,833 vehicles or 9.9% fewer than it did in 2017. While the company’s passenger car exports declined by nearly 12% year-on, its LCV exports were down by a more modest 6% or so.

SALES (TL THOUSAND)	2017	2018	CHANGE %
Export Sales	11,887,628	14,455,023	21.6%
Domestic Sales	5,408,765	3,934,701	-27.3%
Other Income from Operational Activities	171,413	213,607	24.3%
Total	17,467,806	18,603,311	6.5%

 

SALES (UNITS)	DOMESTIC SALES		CHANGE	EXPORT SALES		CHANGE	TOTAL		CHANGE
	2017	2018	%	2017	2018	%	2017	2018	%
Passenger Cars	63,569	42,062	-33.8	152,089	133,362	-12.3	215,658	175,424	-18.7
Light Commercial Vehicles	59,238	25,604	-56.8	118,671	110,471	-6.9	177,909	136,075	-23.5
Total	122,807	67,666	-44.9	270,760	243,833	-9.9	393,567	311,499	-20.9

 

	2017	2018	CHANGE (UNITS)
Domestic Sales (units)	122,807	67,666	-55,141
Manufactured	111,295	61,728	-49,567
Linea	8,436	1,461	-6,975
Egea Sedan	42,873	32,985	-,9,888
Egea Hatchback and Station Wagon	4,361	2,403	-1,958
Doblò	27,970	11,709	-16,261
Fiorino	27,655	13,170	-14,485
Imported	11,512	5,938	-5,574
Ducato	5,493	2,221	-3,272
Fiat 500	1,644	764	-880
Jeep	2,301	2,402	101
Fullback	1,129	135	-994
Grande Punto	371	79	-292
Alfa Romeo	311	188	-123
Panda Futura	103	75	-28
Maserati	85	46	-39
Ferrari	16	18	2
Fiat 124 Spider	59	10	-49
Export Sales (units)	270,760	243,833	-26,927
Tipo Sedan	30,473	24,600	-5,873
Tipo Hatchback and Station Wagon	98,191	89,578	-8,613
Doblò	58,289	65,447	7,158
GM (Opel, Vauxhaul)	19,346	11,956	-7,390
Ram ProMaster City	12,651	15,407	-2,756
Minicargo (Fiat)	37,351	36,811	-540
Minicargo (PSA)	14,395	-	-14,395
Others	64	34	-30
Total	393,567	311,499	-82,068

IN 2018 TOFAŞ’S INVESTMENT OUTLAYS TOTALED EUR 95 MILLION IN VALUE.

INVESTMENTS AND R&D EXPENDITURES

The biggest share of Tofaş’s total investments in 2018 went to the company’s Egea Project.

2018 INVESTMENTS	EUR (MILLION)
New Doblò	22
Egea Family	37
Minicargo	7
Structural	29
Total	95

TOFAŞ COMPLETED 2018 WITH HISTORICALLY-HIGH LEVELS IN ALL INCOME ITEMS.

PROFITABILITY

Tofaş registered historically high levels in all income items in 2018. The company’s net profit increased by 3.7% year-on and amounted to TL 1,330 million while its consolidated pre-tax profit was up by 5% and weighed in at TL 1,291 million. Tofaş’s EBITDA grew by 24.4% year-on and reached TL 2,484 million.

YEARS	EBITDA		PROFIT BEFORE TAX		NET PROFIT
	TL thousand	Change %	TL thousand	Change %	TL thousand	Change %
2014	815,607	-0.1%	472,253	-1.00%	574,238	32.20%
2015	1,062,668	30.3%	617,987	30.90%	830,801	44.70%
2016	1,366,148	28.6%	797,936	29.10%	970,228	16.80%
2017	1,997,428	46.2%	1,229,472	54.10%	1,282,818	32.20%
2018	2,484,452	24.4%	1,290,894	5%	1,330,423	3.7%