Taiwanese Supply Chain Leverages Turkey's Automaking Industry

Taiwanese Supply Chain Leverages Turkey's Automaking Industry

 The Turkish State Institute of Statistic has pointed out that the country’s total export value reached US$180.46 billion in 2019, of which its automobile industry contributed US$ 26.88 billion. The automobile industry accounted for 15% of the total export value, more than any other industry. European countries such as Germany, the United Kingdom, and France received the most automobile exports (approximately 70%). Moreover, according to statistics from the Turkish Exporters Assembly (TIM), five automobile manufacturers ranked among the top ten exporters in Turkey. Number one on the list is Ford Otosan, which exported US$ 5.8 billion; second is Toyota Turkey, which exported US$4.2 billion; and the other three major automakers are Oyak Renault, Tofas Fiyat, and Mercedes-Benz Turkey.
        Turkey's automobile industry began to sprout in the 1950s, mainly due to its proximity to the European market, cheaper labor and land costs, and friendly relations with Western Europe and the United States compared to the North African and Central and Eastern European countries. Subsequently, with the stability of Turkey’s political and economic situation and the industrial layout planning of European countries, Ford Motor of the United States, Fiat Automobiles of Italy, and Group Renault of France have successively invested in Turkey by forming joint ventures with local car manufacturers. With the Turkey-European Union Customs Union coming into effect in 1995, Japanese and Korean brands have also started to invest in Turkey in the hope of establishing a significant presence in the European market. According to statistics from the Organisation Internationale des Constructeurs d'Automobiles, Turkey was the 14th largest automobile manufacturer in the world in 2019, with an output of 1.461 million vehicles. Taiwan ranked 32nd with an output of approximately 250,000 vehicles.
        In 2015, the Turkish government acquired the intellectual property rights for chassis-making from the Swedish Saab Automobile AB. At the end of 2017, the Turkish President announced plans to establish Turkey’s Automobile Joint Venture Group Inc. (TOGG). Using TOGG as a base, the Turkish government invited leading (military and commercial) automobile companies, telecommunications companies, energy and electrical appliances manufacturers, and retail distributors to build up the "electric car national team" to manufacture its own brand of cars. At the end of 2019, the President of Turkey officially released a variety of electric vehicles and ordered the construction of charging stations across Turkey. In 2020, TOGG continues to form international alliances. For example, TOGG has been furthering cooperation with the German EDAG engineering company to make electronic products and systems for electric vehicles.
        According to the statistics of the Taiwan Transportation Vehicle Manufacturers Association (TTVMA), the output value of our country's automobile parts manufacturing industry reached approximately US$13 billion (5% of the national total) in 2019. This key industry for Taiwan is comprised of approximately 3,000 manufacturers of auto parts and accessories, including the original equipment suppliers (OES) and the aftermarket (AM) products and related services. It had an annual output value of approximately US$7 billion. Currently, Turkey is our country's second-largest export market in the Middle East. Taiwan exported US$43 million worth of auto parts and accessories to Turkey in 2019, an increase of 12.9% over the same period in 2018. Our country has long been recognized in the international auto parts market for excellence in terms of high-mix low-volume manufacturing, customization, fast shipping, low price, and high quality. Taiwanese manufacturers have also enjoyed competitive advantages, such as a strong ICT industry, favorable government policies, and robust domestic market demand. All these elements have contributed to the robust development of our electric motorcycle industry. Meanwhile, our electric vehicle makers have commercialized and mass-produced such key technologies as power control systems, power modules, motors, chassis, and on-board telematics systems. In other words, our electric vehicle industry is relatively complete in the upper and middle reaches of the industry. Local electric carmakers are capable of forming alliances with major international manufacturers to quickly cut into the downstream end of foreign markets. At a time when Turkey is committed to promoting its own national brands and developing its own electric car industry, our firms are poised to grab the market.


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