Cengiz Eroldu - Board Member and CEO

Dear Stakeholders,

With the pandemic, the world goes through a process where we can clearly feel the rapid change in the business world caused by issues such as the acceleration of technological developments, economic and environmental crises, along with new working styles, difficulties in supply processes, and changes in customer expectations. In this period, as Tofaş, we continued to create economic value by ensuring the continuity of our business, while prioritizing the health of all our stakeholders, especially our employees, and the protection of employment. Our working principles that we have always adhered to, our R&D, digitalization, and innovation efforts that we have invested in for many years, our knowledge and ability to act agile, continue to give us strength in managing this transformation in our company in the most effective way.

Turkey’s automotive market shrank in 2021 due to the slowdown in the global supply chain. In addition, the market has experienced problems in Europe market due to problems in the supply of semiconductor materials. Despite all these variable and challenging conditions, our company represented 17% of the industry with its 228,544 units of production in 2021, and 12% of it with 112,477 units of exports, while it became the leader in terms of local sales with 97% domestic production.

With our wide brand and product portfolio, we have strengthened our strong position in the automotive industry this year as well. With our strong brands in the automobile and light commercial vehicle market in Turkey, we have reached a market share of 13.1% in automobile sales and 27.4% in the light commercial vehicle market. Our Fiat brand has achieved leadership in the total market for the third time in a row with 121,254 sales and 16.4% market share in passenger and light commercial vehicle total sales. While Fiat Egea became the best-selling vehicle in Turkey for the sixth time in a row, the new member of the family “Egea Cross” was awarded as the “Car of the Year in Turkey” award in 2021 by the Automotive Journalists Association. The most preferred light commercial vehicle of 2021 was Fiat Doblò. Our company also strengthened its competitive position in the market by offering the hybrid models of Fiat 500, Fiat Panda, Jeep® Renegade, and Maserati Levante for sale in 2021.

Our R&D Center stands out as one of the important hubs of the Stellantis Group with its product engineering experience, new product development competencies, and the high technology and diversity of its laboratories. As Tofaş, we were selected as the Best Automotive R&D Center in Turkey by the Ministry of Industry and Technology in 2021, and we were among the top 3 companies in the general ranking within the scope of the “R&D 250, Turkey’s Most R&D Investing Companies” research prepared by Turkishtime. With the importance we attach to R&D and the investments we have been conducting for many years, we are pleased with the level achieved by our R&D Center today.

We prioritize the promotion of the digital transformation and the innovative perspective in all our processes for the sustainability of our business. Our company, which continues to work rapidly towards the smart factory with digital optimization applications for productivity purposes, has also focused on developing information technologies such as 5G, cloud, and cyber security. We also continue to invest in robotic transformation for fundamental infrastructure and operational processes with data analytics-oriented projects. Our Fiat and Jeep brands, which carry their digital competence to sales and after-sales processes to improve the customer experience, launched all models in the product range online in 2021. Fiat continued to enhance Turkey’s most comprehensive connectivity technology “Fiat My Companion Connect” in 2021 with new applications such as “Accident Black Spot Notification” and “Smart Insurance” to provide comprehensive and value-added services to our customers.

On the other hand, we accept it as our main responsibility to create a safe and healthy learning and development-friendly work environment for all our employees within the Tofaş culture. We set all our human resources processes and policies in line with the Tofaş Ethical Principles as well as the principles of inclusiveness, equality, and diversity of the UN Women’s Empowerment Principles (WEPs), which we signed in 2017; and we see all mental and physical differences as a value.

As Tofaş, in 2022, we made commitments to empower women and girls in the field of technology and innovation, which has a key place in our activities, by participating in the “Technology and Innovation” action group of the UN Generational Equality Forum. Today, we aim to increase the rate of female employees, which is 18% in these areas, to 30% by 2026; to increase the rate of female managers working in the same field from 13% to 20%; and to reach 30,000 girls with awareness studies. In this context, we plan actions to strengthen both our candidate pool and our human resources processes and policies with awareness studies to increase the number of girls studying in the fields of science, technology, engineering, and mathematics.

The increase in the pace of climate change reveals the seriousness of the measures to be taken in this regard. We are aware that we need to take actions beyond our responsibilities to increase our social welfare and minimize our impact on the environment in all our processes in order to ensure the long-term sustainability of both the Turkey’s economy and our company. Our company, which supports the circular economy and accelerates its work within the scope of the transition to a low-carbon economy, aims to reduce the environmental impact in all its processes, use and protect resources and energy responsibly, increase efficiency, reach zero waste level, raise awareness of its stakeholders in this regard, and continues the necessary improvements in this direction. As a corporate member of the Climate Platform, we support the transition to a low-carbon economy with energy efficiency studies. In 2021, we prevented 5,148 tons of CO2 emission by saving 77,974 GJ thanks to 384 energy efficiency projects we implemented to reduce energy consumption and CO2 emissions. We reduced the amount of freshwater used in the production of each vehicle, which was 2.98 m3 in 2020, to 2.91 m3 in 2021. With the recycling works we have conducted; we plan to reduce this level to 2.86 m3 by 2024. Within the scope of these studies, as Tofaş, we have ensured the reuse of sixty million m3 of water in 2021 thanks to the in-plant circulation system. In this direction, we will continue our efforts to achieve our goals of being a carbon-neutral facility in the long term with confident steps.

On the other hand, with a plain and proactive occupational safety approach, and in accordance with the legislation in force, protecting all our employees from injuries and occupational diseases because of occupational accidents is our most important and unchanged priority.

As Tofaş, we conduct our corporate sustainability initiatives in an accountable, transparent, fair, and responsible manner in addition to all our activities. In order to ensure the effective operation of the Committees within the Board of Directors, we established the Early Risk Detection and Risk Management Committee in 2021 to conduct studies to determine the risks that may jeopardize the existence, development, and continuation of the company, to implement the necessary measures related to the risks, and to manage the risk.

We strive to move our company forward every day with the responsibility given by the trust in our company and the respect we have for human and nature. I would like to express my sincere thanks to all our parties, especially our shareholders, customers, employees, dealers, and suppliers, who helped us to achieve sustainable values and our goals in this journey.

Cengiz Eroldu
Board Member and CEO