LOCAL REPORT Turkey Paul Stephenson, OATS Ltd

With a population of 82 million, 50% under the age of 30, Turkey geographically spans both Europe and Asia.

In a drive for industrial and economic growth and inward investment, Turkey’s GDP peaked at around £685bn in 2013. However, rising inflation, unemployment and the COVID pandemic, saw GDP fall to near £540bn by 2019, crashing a further 5% in 2020. Yet, some analysts are expecting a dramatic recovery, with 2021 alone forecast to deliver 5% growth.

The vehicle parc, manufacturing and sales Turkey is a key manufacturing base for both automakers and suppliers. It is the largest exporter for global OEMs outside the European Union at an average of 85% (more than one million units at its 2017 peak). Production capacity is almost two million vehicles annually, although 2020 reached just 855,000 passenger cars.

Turkey’s automotive strength developed from Türk Otomobil Fabrikasi A.Ş. (TOFAS), founded in 1968 and now jointly-owned by Stellantis (Fiat Chrysler and PSA) and Koç Holdings. Unsurprisingly, Stellantis marques – in particular Fiat – dominate Turkish manufacturing and on-road presence, although Toyota, Ford and others have invested heavily since 2014. Commercial vehicles account for a large slice of production, making Turkey the second largest CV producer in Europe.

The component sector is also heavily invested in the country with more than 430 Tier One suppliers having a presence including Denso, Bosch, Delphi, Magneti Marelli and Turkey’s own Beyçelik Gestamp. Of Turkey’s 15.3m passenger car parc, some 30% are pre-2005 registered. Top five new vehicle marques are Fiat, VW, Ford, Renault, and Toyota.

Base oil production Turkey’s base oil demand is largely import-supplied (around 405m tonnes in 2019). The country has six licenced refineries, four being active, with diesel- based products being 40% of total output. There are 93 distributors and around 13,000 retailers – domestic suppliers Petrol Ofise and Opet are the largest, followed by Shell and BP. Automotive fuel


consumption in 2019 was 36.2m tonnes. LPG is now dominant, with diesel use 1.5 times greater than petroleum (gasoline).

The Lubricants market In 2019, Turkey’s lubricants consumption was 422,751 tons; predominantly engine oils (206,000 tons/49%) and industrial oils (182,000 tons/43%). Around 100,000 tons of lubricants and 88,000 tons of additives and preparations were imported, offset by almost 178,000 and 9,300 tons exported. Key domestic suppliers are Akpet, Lukoil, Atak and Opet, with Shell, BP and Total the main imports.

Vehicle lubricants are dominated by CV products, with industrial lubes led by hydraulics and processed oils. Viscosity preference for lower-grade lubricants remains strong amongst Turkish consumers, particularly 5W-30, although 0W or OEM-specified product demand has risen sharply as new vehicles start to influence the parc.

OEM-based specifications largely reflect brand popularity. The TOFAS legacy, along with newer Stellantis brands, are predominant, although Ford, VWG and Renault specifications also have significant influence.

In Summary Turkey provides an enigmatic insight into both the automotive and lubricants sector. Situated between Europe and Asia, and courted by global automakers and Tier One suppliers, it could both influence, and be influenced by, global OEM and lubricants development. Yet, domestically, the country appears to be significantly behind Europe and Asia in demand for lower-emission, higher-performance products – whether vehicles or lubricants.

The disparity between industrial and consumer aspirations - plus the tension between increasing market sophistication and a population battling economic pressures - presents an intriguing challenge for vehicle and lubricants marketers.


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