In the global marketplace, “BRIC” is turning into “MINT” – that is, the top emerging markets for growth is moving from BRIC countries (Brazil, Russia, India and China) to the MINT community (Mexico, Indonesia, Nigeria and Turkey). Turkey, in particular, holds particular opportunity for the automotive aftermarket.
The Overseas Automotive Council (OAC) of the Automotive Aftermarket Suppliers Association (AASA) has partnered with Frost & Sullivan on delivering insights and opportunities on the Turkish automotive aftermarket. The overview of the Frost & Sullivan report, “Strategic Analysis of the Turkish Automotive Aftermarket: Capitalizing on Growth in Vehicle Maintenance and Repairs” which appears in the Q3 issue of the OAC / AASA Global Report, notes that aftermarket industry growth in Turkey is driven by the aging vehicle parc in Turkey.
Turkey’s average age for passenger cars is 11.8 years, making its vehicle parc three years older than most other European Union countries, according to the Frost & Sullivan report. In the light vehicle segment, nearly 65 percent of the vehicle parc is above five years old. This shows a considerable amount of vehicles are in the aftermarket “sweet spot” in terms of needed repair and maintenance.
New vehicle sales are generally higher in the western part of Turkey, which creates a transition of new vehicles shift from west to east. However, new light vehicle sales decreased around 16 percent in the first 10 months of 2014, the report noted. This decrease stems from an increase in the special consumption tax on new vehicles, the fluctuation in the Turkish lira and the loan limitation by the Banking Regulation and Supervision Agency. This negative trend in new vehicle sales caused the secondhand vehicle market to increase 5 percent.
As a result, Turkish motorists are using their cars longer than before, and, in turn, these vehicles require more maintenance. When new car purchases do increase, this will trigger secondhand market growth because more used cars become available for purchase.
The Frost & Sullivan report noted that one of the top challenges in the Turkish aftermarket is the proliferation of counterfeit parts. Local parts manufacturers often produce counterfeit products as second-line quality under the name of quality global brands. In addition, very low priced products are being exported from Eastern counties, dramatically affecting aftermarket revenue. Without a regional distribution channel, parts can be sold anywhere around the country.
The Turkish aftermarket also is challenged by the diversity of the country’s car parc, which consists of 59 different brands. This diverse car parc means that small independent facilities need to stock a large inventory of products.
The OAC and AASA will launch a three-year plan to promote North American exporting through trade missions to 10 different countries, beginning with a trade mission to Istanbul, Turkey on April 3 to 7, 2016. The OAC also offers international outreach opportunities during AAPEX 2015 at its Global Reception on Nov. 3. For details on the 2016 OAC Trade Mission to Turkey, the 2015 OAC Global Reception at AAPEX or other Council programs and services, email [email protected].
For details on the complete Frost & Sullivan report, “Strategic Analysis of the Turkish Automotive Aftermarket: Capitalizing on Growth in Vehicle Maintenance and Repairs”, click here. Members of the AASA Overseas Automotive Council can receive a discount on the report by contacting Angela Hall of Frost & Sullivan, [email protected].
Editor’s note: Ben Brucato is the director of membership and sponsorship of the Automotive Aftermarket Suppliers Association (AASA) and executive director of the AASA Overseas Automotive Council (OAC).
The OAC promotes the sale in foreign markets of automotive and heavy-duty products manufactured in North America. Those products include components, accessories, chemicals, hand and power tools, service maintenance and repair equipment, and paint and body supplies for both cars and trucks. OAC has more than 350 members in more than 40 countries. More information is available through its Web site, www.oac-intl.org.
AASA (www.aftermarketsuppliers.org) exclusively serves manufacturers of aftermarket components, tools and equipment, and related products, which support 710,000 employees in the United States. AASA is a recognized industry change agent – promoting a collaborative industry environment, providing a forum to address issues and serving as a valued resource for members. AASA is the light vehicle aftermarket division of the Motor & Equipment Manufacturers Association (MEMA).
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