50 Years In Business!

We have previously often hosted Rahmi Koç in these pages. But Koç has never had the opportunity to relate all the milestones of his 50 year career. The legendary executive Rahmi Koç learned his trade under the tutelage of Bernar Nahum, and is a leader who has personally witnessed different eras in Turkish history. His half-a-century-old career is filled with important messages for all businesspeople.

Otokoç was Koç Holding’s first automotive company. This year the company celebrates the 80th anniversary of its foundation. In Rahmi Koç’s words, it was “Vehbi Koç’s first love”. This company has a special sentimental importance for Koç Holding Honorary President Rahmi Koç because Otokoç was the first place he worked. After graduating from John Hopkins University and returning to Turkey, Rahmi Koç took the first step in his business career at Otokar under the tutelage of Bernar Nahum. For two years he worked in every department in the company, from the garage to the spare parts warehouse. Today, when he looks back at his 50 year-old career, Rahmi Koç says that Otokoç has an important place in his life. He is pleased with the level the company has reached today. We spoke with Rahmi Koç about his early years in business, his time at Otokoç and the significance of the automotive sector for Koç Holding.

* Why did you begin your business career at Otokoç?
I began working at Otokoç on 1 September 1958. This year I shall complete my 50th year in business. Automobiles were our first business. We first began with a distributorship. Finally we spread throughout all of Turkey.

* Could we listen to the story of Otokoç’s establishment from you?
Vehbi Koç separated the Koç Ticaret Automobile Branch in Ankara and made Otokoç. Before he established Otokoç, he used to come early to work and would see a blonde, blue-eyed man going every day to Burla the Jew’s shop. This blonde man was Bernar Nahum... He began to follow him. He realized that he was very hard-working. One day he called the man to him and said: “I want to give you a job.” Bernar Nahum replied: “Up until now I have always worked for a salary. This time I want to be a partner.” Vehbi Koç said: “I am about to establish a new company. You can be a partner there.” And they agreed.

* What kind of relationship did you have with Bernar Nahum?
When I completed my military service, they sent me to work with Bernar Nahum. One day he summoned me to him and said: “Look, my boy. I am the manager. You are Vehbi Koç’s son and you will work alongside me.” They gave me a tiny office. Even the secretary’s office was larger than mine. For my first job, they put me in the garage. Bernar Nahum tried to raise me according to the philosophy of” “you take the meat and I’ll take the bones.” From him I learned things related to marketing, commerce, money and bureaucratic procedures. For Mr. Bernar, customer satisfaction came first, profitability second.”

* How many years did you work at Otokoç?
I worked at Otokoç for approximately three years. I did not just sell automobiles. I also sold trucks, combine harvesters and minibuses. At that time, the main problem was getting hold of foreign currency. When you found foreign exchange, you could sell a car when it was still on the ship. There was no such thing as selling. Indeed, everything sold like hot cakes.

* What were the most important milestones in Koç’s growth in automotives?
When you look at the history of automotives at Koç, you can see four distinct periods: the first was importing, the second assembly, the third manufacturing and the fourth exporting. We successfully went through all four of these periods. Of course, during the transition from assembly to manufacturing we formed partnerships with global brands. When we entered the automotive business, there was no supply industry in Turkey. As a result, we also had to establish a supply industry in Turkey.

* What do you think will happen in the automotive business in the next 5-10 years?
There are a lot of manufacturers in the global automotive sector. They sell automobiles for virtually no profit. As a result, I predict that mergers in the global automotive industry will continue. There will not be any small companies left. There will also be a consolidation in the automotive industry in Turkey. Those who remain will produce more vehicles. Some will disappear.

* The acquisition of Tüpraş and the sale of Migros have changed Koç’s portfolio. What place do automotives have in this new picture?
As you know, we decided to concentrate on four sectors. The first is banking and finance, the second is energy, the third is automotives and the fourth is white goods. Before the sale of Migros we had five main sectors. We still have a presence in retailing through Koçtaş but our retailing business is no longer as large as it once was. We have two flagship businesses. One is Tüpraş and the other is our bank Yapı Kredi. But our automotive group has a history, accumulated experience, financial power and is an export business. Automotives will continue to be one of our four man branches of business. We shall continue to invest.

* In the last 5-6 years, the Koç Group has been growing rapidly. What is the reason for this?
We saw that it was impossible to survive in the world without growing. For that reason, we looked to grow fast. We focused on specific businesses in order to keep pace with global developments. We accelerated our growth. We began to try to ensure that at least 50 percent of our revenue came from exports.

Vehbi Koç’s Important Business Rules

He Did Not Like To Grow Too Fast
The late Vehbi Koç saw that we had made the 500 largest companies in the world. He had some very strict rules. He believed that rapid growth was dangerous. He would absolutely never approve of growth through taking a lot of loans.

Eggs In A Different Basket
The second was that he did not like to put all his eggs in one basket because the economy in Turkey was always fluctuating. He would say: “I shall pay my debts on time but I may not be able to get what is owed to me. I can never do anything which might damage my reputation.”

Investment From His Own Resources
We were criticized a lot during Vehbi Koç’s time. They used to say: “You use a lot of your own resources.” We would use our own money for 60 percent of our investments. The consultants and economists who came from abroad used to criticize us.

We Did Not Send Any Money Abroad
We did not smuggle any money abroad when the Turkish Lira was not convertible. At that time, everybody had money outside the country. We had none. Nobody could understand why we did not have any money abroad.

He Brought The Best
He always used to find and employ the people who knew the subject the best so as not to make any mistakes. This was sometimes an advantage and sometimes a disadvantage. It used to restrict us.

M. Rauf Ateş / rates@capital.com.tr
Sedef Seçkin Büyük / sseckin@capital.com.tr