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ISTANBUL, TURKEY – The spectre of the global financial crisis hovered throughout the inaugural Automotive Logistics Turkey conference, held from October 14 to 16 in Istanbul. Carmakers, Tier suppliers and logistics service providers all admitted that the extent of the impact on the Turkish automotive industry is unknown, but that “the tsunami is approaching day by day,” according to Doctor Ercan Tezer, from the Turkish Automotive Manufacturers’ Association (OSD).

Managers from Ford Otosan and Tofas admitted that production figures for this year and next would likely be affected. Ford Otosan’s Cengiz Kabatepe said that his company’s production was expected to rise to 286,000 this year, but that the impact in the fourth quarter might bring this down. Tofas’s Onur Yalcin was blunter: “We will lower production, that is for sure,” he told delegates.

But despite the crisis, speakers expressed hope, especially that the tough times would lead to closer collaboration and better efficiency, particularly in logistics. Kabatepe reminded delegates that “those who manage their supply chain will be one step ahead of the others”. He described Ford Otosan’s supply chain across Europe, and how the company’s “backward planning” enabled it to maintain an efficient network with the use of consolidation centres and milk runs. The company has also been able to increase its inbound rail use to 60 per cent of all volumes, versus an average of only two per cent across the Turkish industry. “We are now running four block trains a week from Germany, and are running trial shipments between our plants in Turkey,” he said. “The most important thing is to believe that you should use this service, and we’ve believed in rail for a long time.”

Improvements needed at home

Tofas’s Supply Chain Director, Altan Aytac, said that Turkey has focused on exports in the past decade, exporting 75 per cent of vehicles it produces. But if it wanted to compete with the rising manufacturing in Asia and Russia, markets it supplies in which continued growth is expected to keep Turkish production stable, the industry would have to make many improvements at home.

He outlined three areas of important collaboration moving forward: collaboration between OEMs in Turkey; better dialogue with the government to help shape future policies; and collaboration with LSPs. “Historically, in Turkey we try to identify a certain part of the value chain to make things cheaper,” he said. “It makes for cost savings in the short term, but in the long term we have to change this mentality.”

Toyota Motor Europe’s General Manager (Purchasing) Emin Atac, told delegates that he wanted to see innovation as the response to the crisis, particularly in areas of better planning and improving load efficiency, and in packaging. “We want suppliers to come to us with ideas as early as possible,” he said. “We have many examples where packaging suppliers can even influence the design of parts.”

And while there were many expectations that production could fall or stagnate in the next year or two, several speakers repeated the industry’s expectations for medium term growth: for production to rise from 1.1 million cars in 2007, to 2m in 2012, with 1.5m exports. But for the production to be feasible, massive improvements in Turkish ports would be necessary, both for the import of material and the export of finished vehicles. Dr Metin Tuerkay, from Koc University, presented findings from his recently completed study of a Turkish masterplan for infrastructure improvements in the Istanbul region, including the completion of dedicated car terminals and improved rail links. The 200-page report has been submitted to the government, and its recommendations (if followed) would be “a dream scenario” as Atac later said.

However, the proposals are a long way from becoming real. “K-Line”‘s Peter Menzel pointed out that the Turkish ports have been privatised, and investment is already moving in different directions, so that even if the government wanted to follow the proposals, it would find it difficult to make any impact. “This masterplan is very good, but I fear it might have come too late,” he said.

There were other positive developments, such as the recently completed Autoport, developed by Arkas Group. A tunnel underneath the Bosphorus, linking Istanbul’s Asian and European sections, is expected to be operational by 2012. Delegates also promised to give more information to the Turkish government. Tezer said that he would present findings from the conference, as well as presentations given by speakers, directly to the government. He invited all members of the industry, including OEMs, foreign investors and providers such as shipping lines, to work together with OSD. “If you are ready to come forward and work with us, we are ready to meet you,” he said.