What Makes Turkey The New Growth Area In Motor Manufacturing?
The next global centre of car production is not where you may think. It’s not in the Far East or Latin America; it’s where East meets West, Turkey. Automobile production in Turkey is at record figures.
● In 2017, 1.75 million cars were manufactured in Turkey, that’s up 14% year-on-year
● Turkey is the 5th largest automobile producer in Europe and the 14th largest in the world
● It’s not only manufacturing; there are 132 R&D automobile design centres operational in Turkey
● Global OEMs including Ford, Fiat and Daimler run factories in Turkey. Between 2000 and 2017, OEMs invested $14 billion into their Turkish operations
● 77% of cars produced in Turkey are exported to other countries
Turkey’s already thriving motor sector has evolved because of a combination of factors.
Turkey is in the fortunate position of having a workforce that is well-skilled and cost-effective. The average hourly wage in Turkey is €6, compare to €24 in EU countries. This makes Turkey a desirable destination for multi-national OEMs to manufacture cars. It is the reason why foreign investment is so high.
The population of Turkey is large, more than 80 million, and growing. Education standards are good and students leave with marketable skills.
Turkey is where Europe meets Asia, where East meets West. It borders Greece and Bulgaria in the EU, as well as the Middle East and former Soviet countries. It has numerous large ports, including Ambarli near Istanbul; airports, plus a good road and rail network. The desirable location and infrastructure are all there to make Turkey a manufacturing and exporting hub.
Of course, Turkey’s Southern borders with Iraq and Syria are more difficult to cross at the moment, but if relations in this area improve, Turkey could export across borders in all directions.
Focus on business
Turkey’s government, led by President Erdogan, has its critics across the world, but it actively courts foreign investment and is forging close ties with China, the US and EU countries. It attempts to be as ‘business-friendly’ as possible.
Turkey is not an EU member, but it has a customs union with the EU which means goods can travel between the two entities without restriction. It means Turkey aligns its industrial standards with the EU. The government is also expected to introduce new regulations on data privacy, consumer affairs, market welfare and international roaming. Data protection laws are likely to closely follow the EU’s GDPR initiative.
Incomes and standards of living are rising in Turkey. Car ownership is growing, although it still lags behind the European average. However, this provides an opportunity for international car brands to sell to the domestic market as well as export. There is also a government-backed ‘National Car’ project currently in progress, which will incorporate connected and electric car technology.
Connected cars in Turkey
PWC researched the future of mobility and the auto industry in Turkey. The research found that in the next 10–15 years, the demands of younger, more tech-oriented drivers will cause the industry to transform. This cohort of car users prefers a flexible, on-demand mobility service, at odds with the traditional model of car ownership. They want to have a number of cars and mobility solutions available to choose from, as well as traditional car-ownership, including:
● Electric and hybrid vehicles
● Car-sharing services
● Autonomous vehicles
● Connected cars that can be updated with the latest techand software as soon as it is available
OEMs and car dealerships in Turkey are interested in what connected cars can offer their customers. Connected car technology also helps dealerships, by enabling them to build a better relationship with their customers and provide more personalised, relevant marketing.
At Bright Box, we’re excited to expand our business and the availability of our Remoto, AI-first technology platform, into Turkey, helping OEMs and dealerships offer
● Remote car control using mobile apps
● Location services
● Direct communication with dealerships
● Remote vehicle health checks
● Automated service reminders and much more
● Car sharing services
A bright future
As ‘connected car’ technology becomes integrated into new car production and car dealerships in Turkey it will enhance its position as an innovative, automotive hub, with the potential to provide the service that younger, more tech-savvy drivers are beginning to demand.
Bright Box’s expertise in data processing, security and privacy will also help Turkey’s OEMs and dealerships navigate the new data protection regulations that the government is proposing, by
● Deploying enterprise solutions with local market data hosting and processing
● Connecting cars using only local mobile data providers, with no need for international roaming
● Complying with new legislation as it evolves
With the government actively seeking tie-ups with large motor brands as well as foreign governments, plus the backing of a new electric car project incorporating connected technology, we’re looking forward to a ‘Bright Box’ future in Turkey.