“Supply Industry Targets Turnover Of Us$18 Billion”

Orhan Sabuncu is the automotive group chair of Orhan Holding, one of the giants of the Turkish automotive supply industry… He notes that the figures in the automotive market will double in size in the period 2003-2007. He says that this will also have an impact on the supply industry and continues as follows: “In 2003 the output of the supply industry was valued at around US$9 billion. Exports totaled US$3 billion. If domestic production doubles then the supply industry’s exports may rise to US$5 billion. The value of total output may reach US$18 billion.”

A few months ago Automotive Industry Association (OSD) Chair Turgay Durak announced that automotives had reached the limit of their capacity and that new investments were needed. Turgay Durak said that US$1 billion was needed to create new capacity of 250,000 vehicles adding that when the supply industry was included then this figure rose to US$1.5 billion.

Boosted by exports, automotive production is expected to rise to 836,000 vehicles in 2007. This means a doubling in the size of the market. A doubling in the size of the primary market will impact on the supply industry and result in output of US$18 billion. This means that all of the companies in the supply industry will grow.

With its 11 companies, Orhan Holding accounts for an important share of the supply industry and it has begun new investments in order to be ready for this new era. Over the next year the automotive group will make investments of US$12 million. Orhan Holding Automotive Group Chair Orhan Sabuncu says: “We may enter new businesses, new production. We shall adapt to the expected increase in production in Turkey.”

Orhan Holding Has A Number Of Companies Which Are Active In The Automotive Supply Industry. When You Bring These Companies Together How Big Are They In Total?

Orhan Holding has 21 companies. 13 of these are active in automotives. Two of them are in France where they operate as engineering and sales companies. The others are producers based in Bursa. Last year the Holding realized total sales of €327 million. In terms of turnover, the automotive group accounts for 93 percent of this total. The holding has set a target of €400 million in turnover in 2004. As with last year, 93 percent of this will come from automotives.

The Forecast Is For Output In The Sector To Reach 900,000 Vehicles. When Will It Reach The One Million Figure That Has Been Dreamed About For So Many Years?

I want to think that the figure will easily surpass one million in 2010. There are several risks in the domestic market. But in order to halt the export market we need to make some major mistakes. I am of the opinion that we shall not make such mistakes.

If Automotive Production Doubles What Will Be The Impact On The Supply Industry?

In 2003 the total production of the supply industry was valued at around US$9 billion. Exports totaled US$3 billion. If domestic production doubles then I think the supply industry’s exports may rise to US$5 billion. If we look at it in total, then we can say that the production value will reach US$18 billion.”

Will This Growth Attract New Investments And New Players?

More foreigners are coming in with new models. If a foreign producer has not granted a license then it can enter Turkey with new models. The growth of the Turkish automobile market has made it an attractive place. For these two reasons I think that some foreign players may enter the market. Anyway, there are already foreign companies which are coming.

Is There An Important Player Which Has Not Yet Come To Turkey And Which Could Change The Balances?

Around 80 percent of the European supply industry manufacturers have already entered Turkey anyway, either through licenses or through partnerships. There is no player which could come in and change the balances of the sector.

Ebru Firat
efirat@capital.com.tr