TURKEY: Toyota plant opens

28 October 1994

A complex at Adapazari to manufacture vehicles made by Japan's Toyota Motor Corporation was opened on 16 October. It represents the largest individual investment from Japan to date in the Turkish economy.

The plant is owned and operated by the local Toyotasa. The company's shareholders are the local Haci Omer Sabanci Holding with 50 per cent, Toyota Motor Corporation with 40 per cent, and Japan's Mitsui & Company with 10 per cent. Investment in the project has totalled more than $300 million, and Toyotasa itself has a capital of TL 3.3 million million ($94 million).

Toyotasa will produce the latest range of the Toyota Corolla, and production will reach full capacity of 100,000 vehicles annually in two to three year's time. Toyotasa has also opened 36 distribution, sales and service complexes across the country.

The proportion of locally made parts used in production is now 35 per cent, but is expected to rise to 70 per cent. This may be achieved more quickly than at first anticipated. With the recent appreciation of the yen, Toyota has been looking to increase parts production outside Japan.

Competition has increased considerably in the Turkish car industry since the late 1980s, fuelled by rising demand. Annual car sales are forecast to increase to 1 million by 2000 compared with about 340,000 in 1993. New foreign entrants like Toyota are challenging the dominance of existing manufacturers including Fiat-licensee Tofas and Oyak-Renault. Existing manufacturers have also increased production capacity and have introduced new models.

Although output fell by 37 per cent in January-September compared with the first nine months of 1993, Toyota says it views the project as a long- term investment. Other Far Eastern manufacturers are also proceeding with investment plans. Japan's Honda Motor Company expects to award a construction contract soon for a plant and is aiming at an eventual output of 100,000 vehicles a year (MEED 21:10:94).

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