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* Recovery in European demand boosts producers in Turkey
* Ford, Fiat Chrysler, Hyundai rolling out new models
* Autos account for 14 percent of Turkish exports
By Evren Ballim
ISTANBUL, May 30 New models and a recovery in
European demand are set to lift automotive exports from Turkey,
Europe's fifth-biggest producer, this year and next, industry
representatives predicted, shoring up economic growth and
boosting new investment.
The sector's strength will be a fillip for Prime Minister
Tayyip Erdogan's government, with growth in the broader economy
slowing after a decade of unprecedented expansion.
The government is expecting growth of 4 percent this year,
although most economists see that as optimistic.
Global carmakers such as Toyota and Ford have
shifted some of their production to the nation of 77 million
largely to take advantage of its geographical position as a
bridge between Asia and Europe and its relatively cheap labour
costs, serving a growing range of foreign markets.
Toyota began producing a new version of its best-selling
Corolla in Turkey last year, while manufacturers including Ford,
Fiat Chrysler and Hyundai have new model
launches in conjunction with local joint venture partners this
year and next.
German truck maker MAN meanwhile announced last
week that assembly of its coaches and public-service buses would
move from a plant in Plauen, Germany to Turkey by March 2015.
Automotive sales account for some 14 percent of Turkey's
overall exports. The country exported 828,000 vehicles worth
$21.5 billion last year, with European markets accounting for 70
percent of that total.
"The European Union market is growing beyond our initial
expectations," Automotive Industry Exporters' Association
President Orhan Sabuncu told Reuters in an interview this week.
"If this momentum continues, export revenues will reach a
total of $23 billion this year," he said, a 7 percent increase
New vehicle registrations in the European Union and the
countries of the European Free Trade Association rose 6.3
percent in the first four months.
"Turkish commercial vehicle producers are shifting to new
models, causing a temporary slowdown, but with stronger demand
in European markets, year-end export figures will be closer to
900,000 units," Automotive Manufacturers Association
Secretary-General Ercan Tezer said.
As European markets stabilise, Turkish producers are rolling
out new models and expanding capacity to tap the rising demand.
Ford Otosan, a joint venture with Turkish
conglomerate Koc Holding, is the sole global producer
of Ford's new Courier commercial vehicle and is expecting a
sharp increase in exports of the light truck from a current
200,000 a year.
"We aim to reach 300,000 units of exports in the coming
period with the recovery in European markets", General Manager
Haydar Yenigun said last week at the opening of a new plant.
Tofas, a joint venture between Fiat and Koc
Holding, will start exporting its Doblo light commercial vehicle
to North America in the fourth quarter, while production of a
new passenger car will begin next year.
Tofas has said it plans to produce 580,000 units of the car
between 2015 and 2023, a third of that volume for export.
Fiat Chrysler announced this month it will spend 48 billion
euros ($65 billion) over the next five years on the revamp of
its existing models, and analysts expect Tofas to benefit.
"Ford Otosan and Tofas will achieve higher export figures in
2015 with the new models. We expect Doblo and Courier exports to
rise with Europe's recovery," said Esra Suner, an analyst at
Istanbul-based brokerage Is Invest.
Hyundai is meanwhile set to enter the European commercial
van market with its Turkish partner Karsan and will begin
production at the end of this year.
It plans to build more than 200,000 of the large vans during
the first seven years.
Hyundai's separate Turkish venture Hyundai Assan, which
started production of its small i10 passenger car at the end of
2013, expects to reach full production capacity of 200,000
vehicles this year, with 78 percent going to export markets.
"Since March, we have been working around the clock. The
increase in orders from British and German markets gives us
hope," Hyundai Assan General Manager Onder Goker said.
($1 = 0.7345 Euros)
($1 = 2.1018 Turkish Liras)
(Writing by Ece Toksabay; Editing by Nick Tattersall and Erica