Sales may decline, we shall grow through leasing

Anadolu Group Automotive Group President Metin Ecevit’s expectations for 2006 are not very optimistic. “I don’t think the market will grow,” he says. “It may even contract by 5-10 percent.” Then he makes the following forecast for his own group. “The business resulting from new retail outlets, second-hand sales and operational leasing could result in growth of 10-15 percent.”

Per capita national income in Turkey has begun to exceed US$4,000. The business community is making calculations for the future based on per capita national income. Their calculations focus on how much of the increasing amount of money in the consumer’s pocket will be used for purchases.
In Turkey there are 80 vehicles for every 1000 people. This figure demonstrates the potential. But the fact that per capita income has always remained low has for years prevented this potential from being realised. According to Metin Ecevit’s calculations, when per capita national income rises from US$4,000 to US$6-7,000 then the market will double in size. That means that the total market will comfortably reach 1.3 million vehicles. This forms the basis for long-term calculations.
But the short-term calculations are that the market will remain at its current level in 2006. Metin Ecevit says that the market has grown since 2003 and that in 2006 the total market may even contract by 5-10 percent.
The Automotive Group is compensating for the $150 million in turnover that it lost through its split from Honda through KIA and new business and, when Samsung is included, it has turnover of close to US$760 million.
Anadolu Group Automotive Group President Metin Ecevit answered Capital’s questions as follows:
* What kind of target have you set for 2006?
I don’t think that the automotive market will grow in 2006. The total market may even contract by 5-10 percent. Because the market has been growing continuously since 2003. It may be possible to sell a little less than last year in terms of automobiles and a little more in terms of commercial vehicles. But the total market will be close to the previous year.
If there is no major change in 2006, the figures will be the same as 2005. We are also making our calculations based on the assumption that the market will not grow. But I think that growth resulting from the opening of new showrooms, the impact of second-hand sales on the new market, and operational leasing will enable us to secure growth of around 10-15 percent in 2006.
* You said that the market has grown continually over the last three years. How has the number of vehicles per thousand people increased?
I believe that at the moment there are around 75-80 vehicles for every thousand people. But this figure is 160 in Bulgaria, 600 in Germany and 600-700 in America. As a result, as income levels rise in Turkey so this increase will continue.
* When one looks at the amount of money in the consumer’s pocket, how many people are there who can buy vehicles?
There are a lot. When your income increases a little, and if you don’t have enough money to buy a house, you will think of buying an automobile. There is nothing in between. In other countries there are bicycles and motorbikes. As a result, as soon as  your income increases, you buy an automobile. When we look at things from this perspective, when per capita national income increases from US$3-4,000 to US$7-8,000 then the market will more than double in size from its current level. I mean, I think the total market will easily surpass 1.3 million vehicles.

EBRU FIRAT
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