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18.04.2013 18:55 News >> Domestic Car 'Commercial Suicide,' Says Ford Otosan Owner Koç

Domestic Car 'Commercial Suicide,' Says Ford Otosan Owner Koç

A fully domestic automobile would please Ankara but prove "commercial suicide" for its producer, Turkish business magnate Mustafa Koç reportedly said during a recent business meeting that was taped and leaked to the Turkish media on Thursday.

A fully domestic automobile would please Ankara but prove "commercial suicide" for its producer, Turkish business magnate Mustafa Koç reportedly said during a recent business meeting that was taped and leaked to the Turkish media on Thursday.

The comments allegedly made by Koç, who heads Turkey's largest business conglomerate, Koç Holding, are the most pointed words yet from an already hesitant private sector regarding Ankara's dream for a domestic car.

Koç's blunt assessment saw Economy Minister Zafer Çağlayan later in the day "reject" the report, telling the press: "If he said this with the meaning we've understood, then it's a description as wrong as can be. This is a comment unbefitting of the Koç group." The minister in turn said that Turkish businesses should be less critical of the government's directives, and, citing a favorite Turkish pop song, sang: "Turkey, Turkey, step on the gas! Whoever may try to stop you, step on the gas!"

Çağlayan's comments came as no surprise after he last month predicted that Turkey would at least be producing one domestic sedan and one light commercial vehicle by 2023, a goal that Prime Minister Recep Tayyip Erdoğan has called part of a "brave plan" for strengthening Turkey's auto industry.

Turkey's auto producers meanwhile have been content with a business model in which they operate as subsidiaries to larger international producers, basing final production in Turkey but leaving engine construction and car design to their more experienced partners. That business model saw Ford Otosan, a subsidiary of Koç, sell around 317,000 vehicles in 2012 and has made the company, Tofaş-Fiat and Oyak-Renault Turkey's leading exporters in recent years.

But that practice should only be a means to an end, Science and Technology Minister Nihat Ergün told the press on Thursday. "We don't count cars produced in Turkey as domestic cars, we count them as domestic products but not domestic brands," he was "ed by the Anatolia news agency as saying. Responding to news of Koç's own reported comments on a domestic brand, Ergün said Koç was welcome "not to play the game" and added that "it might not be easy to make a new brand, but if we hadn't stopped taking steps toward this goal before, we would be in a much better position for a domestic car."

The government has increasingly pitched a domestic brand in the last five years, though most auto industry analysts say a new brand isn't likely given the added costs, sagging European car sales and the already razor-thin margin of profit involved in the auto industry. Last year, Tofaş-Fiat CEO Kamil Başaran said the idea was simply "not feasible" and would likely remain off the table for the private industry.

Ankara is meanwhile hoping that a new incentive package that offers tax breaks of up to 60 percent to builders of new auto facilities will boost the country's auto industry. Last year, Turkey exported $19.6 billion worth of vehicles and automotive components to overseas buyers. Economy Minister Çağlayan has said that the number will grow to $75 billion over the next decade.

Koç's taped comments during the closed meeting also reportedly included frustrated comments over the firm's vetoed $5.7 billion bid to purchase a massive network of İstanbul bridges and toll roads. "The bridge and toll road book is closed for us," Koç allegedly said. Koç Holding originally won the bid for the network in January, but the contract was later nixed by Erdoğan, who said that he would be a "traitor" if he allowed the bridges to be sold at the agreed price, which he deemed too low.

(Cihan/Today's Zaman)



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