Market leadership after 8 years
Tofaş was founded in 1968 by the late Vehbi Koç, founder of Koç Group of Companies and is currently under the shared management of by Koç Holding and Fiat S.p.A. Today, Tofaş is one of Fiat Auto's 3 strategic international production centers. Tofaş represents unassailable value and strength within the Turkish Automotive Industry. Tofaş has the distinction of being the only division of Koç Holding that manufactures passenger cars for international export by virtue of its compact sedan models, the Fiat Linea, Doblo, and Fiorino. These vehicles are manufactured under the Fiat brand by the Minicargo plant in Bursa plant.
Tofaş achieved great success by increasing its sales at the rate of 38.8% in the total domestic market with an increase of 12.8% market share in 2009, and recaptured the leadership of the passenger car and light commercial vehicle market with a share of 15.3% after eight years. It closed 2009 as the leader of the light commercial vehicles market with a share of 29.5%, the highest rate ever.
The most important reasons for this success include:
• The Fiat brand image improved to a considerable extent as clearly evidenced by consumer surveys;
• Tofaş Fiat is the only company that manufactures both passenger cars and light commercial vehicles within the domestic market;
• Tofaş is able to respond to sudden increases in demand by its extraordinarily efficient and flexible production methods.
Tofaş export numbers had a slow start in 2009 in parallel with the European markets. However, by focusing on aggressive marketing and competitive pricing strategies it reached pre-crisis monthly numbers by the end of the year. Specifically because Fiat Fiorino won high recognition in Europe as well as Turkey, CBU (Completely Built Unit) vehicle exportation did not decline in 2009, when compared to 2008.
A strong player during the crisis
Tofaş carried out its policy of continuous cost reduction successfully in 2009 by means of the strong R&D and other engineering talents it possesses and its World Class Manufacturing (“WCM”) activities. Tofaş decreased its operational costs down to the lowest level in recent years. The company's “cost plus” purchases and guaranteed export agreements provided predictability and security in an otherwise unstable economy. As a consequence of its strong balance sheet, effective working capital management, immunity to exchange rate risk, and ability to meet all financial requirements incidental to its projects through extremely low cost agreements made prior to the crisis period, no additional financing was required during this period. By means of these precautions, Tofaş succeeded in completing the year 2009 in a financially strong manner with significant advances in many fields.
Tofaş - the highest quality and most effective manufacturing center of Fiat worldwide
Having been continuously improving leader since 1984, Tofaş was elected as the most successful production center of the Fiat Group in 2007 and reached the bronze level within the scope of the WCM program. Tofaş has carried this success to the silver level in 2009 as a result of intensive activities in 2008, and also achieved the success of being the first and highest scored production center in the world of Fiat.
The 3 millionth vehicle in the 41st year of Tofaş
With great success globally since its introduction to the market, and representing the Fiat brand of the Minicargo project that was performed for 3 different brands in the Bursa plant (with 400 thousand production capacity) Tofaş celebrated its 41st anniversary in 2009 with the Fiat Fiorino being the 3 millionth vehicle produced by the company.
The biggest R&D center of the Turkish Automotive Sector delivers R&D investment values above global standards
Within the scope of the vision, “to be the most competitive and self-sufficient passenger car and commercial vehicle development center of Fiat in 2010”, Tofaş owns the biggest R&D center in the Turkish Automotive Sector. Being one of Fiat's 2 biggest centers in Europe and third in the world, the Tofaş R&D center holds 100% of the intellectual and industrial property rights and design responsibilities of MiniCargo and the new Doblo models. Tofaş increased the percentage of annual R&D expenses above 4% of net turnover, thus achieving the success of exceeding the global standards in terms of R&D investment values. Tofaş aims to:
• improve product development capacity within the scope of its strategic targets;
• to take control of the vehicle lifecycle management responsibilities of the products it develops; and
• to perform all the technological activities concerning the product as a technology and production center.
Koç Fiat Credit
Koç Fiat Credit delivers financing solutions for five Tofaş brands and Case New Holland under the Fiat brand. The company began by providing credit for the acquisition of Iveco branded commercial vehicles, trucks and heavy vehicles in February 2009 and introduced “Loan Protection Insurance” to the market in May, 2009.
Koç Fiat Credit provided 14,918 loans in 2009, capturing 45.5% of the credit sales and 17.5% of the total sales of Tofaş.
Corporate Governance Index
Tofaş increased its rating from 8.16 to 8.24 amongst all ISE companies for compliance with internationally recognized corporate governance principles. Tofaş is one of the pioneers that has followed the principles comprising the ISE Corporate Governance Index since 2007.
New Doblo
The new generation of Doblo, Fiat’s award-winning entry in the light commercial vehicles sector began production October of 2009. The Doblo is now exported to many countries around the world. Tofaş holds many international patents for the innovative technology designed for this light commercial vaehicle. The New Doblo is slated to be produced in 120 thousand units annually. The total investment made in the new Doblo reached EUR 386 million between 2007 and 2009, and additional investment of EUR 64 million is being made in 2010. Two thirds of the production of the new Doblo, produced pursuant to a purchase guarantee provided by Fiat, will be exported.
2010 and beyond
For 2010, Tofaş has established its priorities for 2010 with the goals of:
• Achieving a zero-defect record of quality;
• Increasing cost competitiveness;
• Maintaining and solidifying its sector leadership;
• Increasing customer and dealer satisfaction; and
• Creating value for all of its stakeholders through sustainable and profitable growth.
The long-term strategy of the company was established within the framework of sustainable and profitable growth to retain the success it achieved within the “WCM -World Class Manufacturing” program (Gold Level). Tofaş will share the benefit of this experience with its subsidiaries by virtue of it being Fiat's ‘preferred’ regional R&D and production center, and being self-sufficient in terms of R&D and production.
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