The Global Automotives Market & Tofaş
Although the lingering effects of the Covid-19 pandemic continued to abate, 2022 was nevertheless a challenging year owing to ongoing global supply & demand issues, to the war in Ukraine, and to historically high inflation and soaring interest rates everywhere.
The European automotives market (EU + UK + EFTA) suffered a 4% contraction in 2022 owing to production hampered by disruptions in the supply of semiconductors. Although the impact of these disruptions has since lessened, the shortages contributed significantly to last year’s contraction. Looking at principal national markets in detail, Germany’s grew by 1.1%, while France’s, Spain’s, and Italy’s shrank by 7.6%, 5.4%, and 9.7% respectively. What with the contractions witnessed in both 2020 and 2022, the European automotives market closed the latter year at around 13% below its 2019 pre-pandemic level.
Tofaş’s exports recovered by 8.0% in 2022, with the company shipping a total of 121,485 vehicles abroad. This performance also gave Tofaş a 12.3% share of Turkey’s total exports as measured by volume. Although passenger vehicle exports were down by 15% year-on, light commercial vehicle (LCV) exports were up by about 24% as compared with 2021. The drop in passenger vehicle exports was attributable mainly to supply-chain issues and to an unexpectedly rapid market-preference shift towards hybrids and all-electrics. The rise in commercial vehicle exports was nourished largely by more people buying more things online and by demand coming from the North American market. Tofaş’s own export earnings slightly more than doubled (up 109.6%) year-on and amounted to TL 29,903 million in value. Looking forward, the company anticipates export sales on the order of 70-80 thousand units in 2023.
The Turkish Automotives Industry & Tofaş
According to figures published by the Automotive Distributors Association, the Turkish retail passenger car and light commercial vehicle market booked sales of 783,283 units in 2022, an increase of 6.2% over the previous year.
The principal factors driving vehicle demand in Turkey in 2022 were (1) pent-up demand that arose from market contraction in 2018-2020, (2) consumers’ desire to protect the purchasing power of their money against high inflation and a weakening Turkish lira, and (3) the steady increase in e-commerce and online shopping. Fourth-quarter LCV demand surged (up 47%) on a Q/Q basis owing mainly to a modest improvement in vehicle market availability but also to low base effects.
Tofaş sold a total of 150,013 vehicles in 2022 across its lineup of Fiat, Fiat Professional, Jeep®, Alfa Romeo, Maserati, and Ferrari brands. Tofaş’s own sales as measured by volume were up by 20.3% year-on and corresponded to a 19.15% share of the overall market.
Turkey’s passenger vehicle market grew by 5% with a total of 592,660 units sold in 2022. Tofaş’s share of that market increased by 31.8% year-on and reached 17.03%. A total of 100,932 units were sold. Tofaş’s Fiat brand remained the Turkish market’s leader in both the passenger vehicle and LCV segments last year. The 146,435 units that the company sold in 2022 corresponded to a market share of 18.7%. Fiat’s share of the domestic passenger vehicle market rose to 16.4% in 2022. This performance was nourished by the continued success of the Fiat Egea family. With 68,779 units sold, the Fiat Egea Sedan remained Turkey’s best-selling car in 2022, this time for the seventh year in a row. Both the successful early-2021 launch of the Egea Cross, the brand’s crossover model, and the strong performance of the Fiat Egea Hatchback and Station Wagon models all contributed to the stout defense of Fiat’s overall market share.
Turning now to the LCV market, a total of 190,623 vehicles were sold in 2022, up by 8.6% year-on. Tofaş successfully maintained its strong 25.7% market-share position in LCV sales with its Fiat and Fiat Professional brands. In the minivan segment, makes up a substantial part of the LCV market, the much in demand Fiat Doblò and the Fiat Fiorino continued perform strongly.
Tofaş continues to closely monitor the effects of the earthquakes that struck Kahramanmaraş and affected ten of the country’s provinces on 6 February 2023 to determine the impact that they are having not only on the company’s operations, business continuity, and performance but also on its employees.
From the very moment the earthquakes struck, Tofaş moved to come to the aid of victims to help bind the wounds of the disaster. Tofaş immediately dispatched a team of 17 search & rescue and medical personnel, who reached the area the same day. Tofaş closely coordinated with AFAD in support of search & rescue areas in earthquake-affected areas. Relief and materiel provided by Tofaş and also donated by its employees were transported to stricken areas aboard Tofaş-owned trucks and distributed to those in need.
Tofaş worked with other Koç Group companies in the building and equipping of Koç Holding Umut Kent container cities in disaster areas. Tofaş Sports Club is coordinating with local coaches and the Turkish Basketball Coaches Association (TÜBAD) in the provision of basketball training resources to local kids.
Looking forward, Tofaş anticipates that between 975-1,025 thousand vehicles of all kinds will be sold in Turkey in 2023 and that its own sales will be in the 190-200 thousand range.
