Renault to Increase Turkey Production on Recovering Local Demand

Renault SA (RNO), whose plant in Turkey makes more than half the cars manufactured in the country, plans to increase local production to take advantage of a market expected to grow slightly compared with last year.

Oyak-Renault Otomobil Fabrikalari AS, a joint venture between Renault and Turkey’s military pension fund Oyak Group, will try to use as much as 92 percent of the 360,000 vehicles-a- year capacity at the Bursa plant this year, compared with almost 86 percent in 2012, Tarik Tunalioglu, chief executive of the joint venture, said in a news conference in Istanbul today.

“We want to increase production because we are expecting a bigger demand for our new models this year, especially Clio 4,” Tunalioglu said. “More than half of our production this year will be the Clio 4 model.”

Turkish car and van sales are expected to grow about 3 percent to 780,000 this year, said Ibrahim Aybar, chief executive of Renault Mais Motorlu Araclar Imal & Satis AS, the sales joint venture between Renault and Oyak Group. Turkey’s total vehicle market contracted 11.5 percent last year after a September tax increase on cars combined with slower economic growth to curb consumer demand.

Market Share

Renault’s 2012 sales in Turkey were $4.2 billion, Tunalioglu said, without giving a year-on-year comparison. Exports fell slightly to $3.15 billion from $3.21 billion in 2011. Renault produces sedan models of Fluence, Clio 4 and Megane at the Turkish plant.

Renault Mais, which also sells imported Dacia models, expects to introduce new models in Turkey in order to increase sales from 118,000 units last year, Aybar said. “We want to increase our market share in Turkey this year from 13.1 percent in 2012,” he said.

Renault will start selling nine new models in the Turkish market this year including Scenic, Latitude, Dacia Sandero and electric vehicle Zoe, Aybar said.

Oyak-Renault will continue its three-shift production at the plant, Tunalioglu said, while competitor Tofas Turk Otomobil Fabrikasi AS (TOASO), a joint venture made up of Fiat SpA (F) and Koc Holding AS (KCHOL), said Jan. 2 it will cut shifts to two because of weak demand from European markets.

Toyota Motor Corp. (7203), Honda Motor Co. (7267) and Hyundai Motor Co. (005380) are among manufacturers of cars, vans, trucks and buses that sell local and imported brands in Turkey. The country’s total motor vehicle sales fell to 815,000 units in 2012, said Mustafa Bayraktar, head of Turkey’s Car Distributors’ Association.

Renault will invest 55 million euros ($73 million) in the Bursa plant, compared with $212 million last year, Tunalioglu said.

To contact the reporter on this story: Ercan Ersoy in Istanbul at eersoy@bloomberg.net

To contact the editor responsible for this story: Benedikt Kammel at bkammel@bloomberg.net

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