Tofaş becomes Fiat’s sole lucrative unit in Europe

Tofaş becomes Fiat’s sole lucrative unit in Europe

Emre Özpeynirci ISTANBUL / Hürriyet
Tofaş becomes Fiat’s sole lucrative unit in Europe

Chief Executive Officer Kamil Başaran says Tofaş is Fiat’s healthiest operation in Europe and will continue to be so. Hürriyet photo

Tofaş, Fiat’s Turkey partner, has been left as the only profit-making partner of the Italian automotive giant’s plant in Europe, according to company officials.

Tofaş recorded 3.4 billion Turkish Liras in turnover and posted a 5.2 percent increase in profits year on year in the first half of 2012, Kamil Başaran, the chief executive of the company, said at a meeting with automotive editors.

“Although less affected than other automotive brands, Fiat is still [suffering] losses. But Tofaş had become Fiat’s most profitable and healthiest operation in Europe. Tofaş’s performance will increasingly continue as the crisis is overcome,” he said.

Fiat-Chrysler Chief Executive Sergio Marchionne signaled in a visit in July that Turkey’s role within Fiat would increase in the upcoming period, Başaran added. Tofaş has started to work on four new vehicle projects that will include both passenger cars and light commercial vehicle, he said, adding that the company was already working on carving out a potential project for the Turkish government’s domestic car bid.

Fiat’s second largest market after Italy

“Turkey gives us great confidence amid the European crisis,” said Marchionne, who came to Turkey last month to visit the Tofaş plant, according to Başaran.

Noting that Turkey is Fiat’s second biggest market after Italy and the third in the world, he said, “The capacity usage ratio [at Tofaş] has hit the highest level at around 80 percent.”

He said Tofaş had offset a sales decrease in some crisis-hit European markets by penetrating the German, British and South American markets.

“Exports to Italy and Spain decreased 37.8 percent and 25.3 percent respectively. But we entered the German and British markets by manufacturing for Opel and Vauxhall. These markets made up 20 percent of Tofaş’s total exports. And with Doblo [a light commercial vehicle] we have grown in South America. The share of this region in our total exports has risen from 0.8 percent in 2011 to 8 percent now.”