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GİLA BENMAYOR > Turkey’s dream of a domestic car

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We know that Prime Minister Recep Tayyip Erdoğan mentions in every opportunity his wish for a domestically produced car.

In one Turkish Industry and Business Association (TÜSİAD) meeting, we remember him saying, “All the top manufacturers are here. Why do they wait to produce a domestic car?”

A few days ago, Minister of Science, Industry and Technology Nihat Ergün and a group of journalists were in a conversation on Turkey’s “innovation journey” and the topic came to a domestically produced car again.

Nihat Ergün said this on the topic: “We have taken major steps in the defense industry. We have built a satellite. Similarly, we could have manufactured a domestic car. However the automotive sector is acting reluctantly. They are shy because of competition. Industrialists are not the idealists they used to be. They have multinational connections. Thus, they are hesitant about taking risks.”

According to Nihat Ergün, it is sad that Turkey has produced cars and spare parts for world-famous brands but has not produced up until now its own national and international brand.

As a matter of fact, Turkey is an outstanding production base for brands like Renault, Ford and Fiat.
However, how wise is it to enter such a venture today?

As I was listening to Nihat Ergün, I remembered how Renault-Nissan’s CEO, Carlos Ghosn, looked this year at the Davos World Economic Forum. Carlos Ghosn, who earned an amazing reputation after saving Nissan from bankruptcy and making it again a profitable company, lacked his usual positive mood.

Because the news a short while ago that Renault was going to lay off 7,500 employees in France by the year 2016 fell like a bombshell on the agenda. It was announced later that with the intervention of government officials there would not be any layoffs but it is a fact that the pride of France, Renault, is going through a tough period and will go through another restructuring.

Meanwhile, the European Automobile Manufacturers’ Association has announced that the automotive sector is in a crisis.

In 2012, 12 million new cars were sold in EU countries; however, the figure is 8 percent lower than the previous year. Just like Europe, the American automotive sector’s situation is not bright either.

Detroit, which is known as the place where the automobile was born as well as the “American dream of a house and a car for everybody,” announced at the beginning of last December that it had gone bankrupt.

The final nail in the coffin for Detroit was the automotive giants, the ones the American government saved during the economic crisis period, shifting their investments to developing countries.

Will Turkey’s private sector, which has seen the automotive sector go through painful periods in the West, dare such a venture? Is it easy to create a new international automotive brand in this era?

India’s biggest car producer Mahindra & Mahindra’s head of the executive committee, Anand Gopal Mahindra, monitors Turkey closely. I want to draw attention to what he said in Davos when he was answering a colleague from Turkey’s questions about automobile production: “Turkey is late in its venture of domestically producing a car. India started its domestic production in 1945. Now, such production is not economic. As Mahindra & Mahindra, we bought one of South Korea’s leading firms, SsangYong, two years ago. Why doesn’t Turkey consider buying global automotive brands that are waiting for buyers?”

This is a suggestion that may be taken seriously by the government, which does not want to give up on the dream of a domestically produced car.

February/05/2013

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