Özel Röportaj - Ford Otosan YKB Ali Koç

Not in 2025, we have been for years. Looking at Ford Otosan and Tofaş, we are number one in production, exports, and employment in the automotive sector. One of the most important pillars of our community's rise is the journey that began with a table and a safe, a dealership. It has passed through many significant milestones. Ford now has a production capacity of nearly one million, and it has become Europe's largest commercial vehicle production center and Ford Motor Company's most important production site for the electrification process. So when you look at it, our position has grown much larger and become more critical in both the European automotive sector and Ford's global world. This shows we are doing the right things. Since we are in Romania, let's talk about why we came to Romania. We came to better do what we do. As we expand, we grow. Craiova was previously completely managed by Ford of Europe, but now Ford Otosan, with Koç and Ford Motor Company, runs it. Today, as you see here, we launched Romania's first fully electric vehicles, models 1, 2, and 3. So looking at 2025, the Turkish market will be around one million units, similar to last year. For us, it's important to maintain a market above one million, because in Turkey we struggled to reach a million, then saw ups and downs. But our country needs a market consistently above one million. The market mix is changing: passenger cars, commercial vehicles, hybrids, full electric, internal combustion. That's changing in both Turkey and Europe. So yes, we are big today with many competitive advantages, but the automotive sector is going through a tremendous transformation, almost a sick period. Foreseeing the future is harder than before.

First of all, Romania is a full member of the European Union, I congratulate them. So there is the advantage of being in the EU, cost advantages in production, and a friendly approach to investment. Of course, there are things that need improvement, like transportation infrastructure. But overall, its proximity to Turkey, EU membership, cost advantages, and being a friendly country to investors, especially from Turkey, offer many advantages. We first came here in 2002 with Beko. We bought Beko's factory here. At that time it was a washing machine—sorry, a refrigerator factory—with a capacity of 300,000. Today it has 1.9 million capacity. That was so successful we took another step and invested in a new factory for washing machines with 2.2 million capacity, and we export 40% from both factories. So Romania is a company that contributes to the economy in terms of exports. Then our business grew over time, both Beko within itself and through our agreement with Ford to acquire the Craiova factory. On top of that, we are making an energy investment, a solar energy investment of 150 million euros, 214 MW, starting in May. Also, our Otokar company signed a very important defense industry project abroad, and recently we won a tender for 400 buses. We will produce over 1,059 vehicles, including 4x4 Kobras, over 700 of which will be produced here. So we will have a third production facility here. We are very happy there. In addition, our payment systems company tokeni came here, we got the necessary permission from the Central Bank, and I think we are the first company to do this. There is tremendous growth potential here. Also, our company Zer—what is Zer? It's a procurement company that does logistics. Zer established a company here for all this growth. And finally, inshallah, when we find a suitable plot, we will have a health sector investment of around 100 million euros. So when you look at it, the good work we do in Turkey has expanded, and Romania has become very suitable for us. We had tried Bulgaria years ago with Migros and telecom, but we didn't get the desired results. Opet entered. But in Romania we are getting the desired results so far. For that, we thank the public officials at the state level, the relevant ministries, and especially the Prime Minister. Look, we said it's a natural strategic growth area for Turkey, not just for Koç. So far, over 19,000 Turkish companies are here with investments exceeding 8 billion euros. So this place has become an important area not only for Koç but for the entire private sector.

In the last five years, we have made about $10 billion in investment in the automotive sector, 95% in Turkey. Here we made a $500 million investment. Euro amounts, all in euros. How do you envision Ford Otosan's role in Turkey and globally in the next 10 years? First, let's go back to the early 2000s. From the beginning of 2000 to now, the Turkish automotive sector, not just Koç, made a tremendous move. We became an automotive center of excellence, a production cluster. The entire value chain developed, and we developed a supplier industry that supplies to brands manufacturing in our country. So as we grew, the supplier industry grew, and now for the first time, 10 of our critical suppliers made cross-border investments here. So currently, there are five brands in Turkey plus TOGG, making six, and with the Chinese BYD coming, seven. And I think we have created a competitive advantage in the automotive sector. Now let's come to today. By 'we' I mean Turkey. What I'm about to say concerns both the Koç group and the entire automotive sector. Earlier I mentioned one of the sickness issues is the ability to see the future. There is so little predictability about future forecasts. So where the sector is going, how much electrification will grow, how autonomous vehicles will come, how long internal combustion will continue, whether SUVs will overtake regular passenger cars—lots of topics are being discussed, up to flying cars. We are going through a period where many topics are debated. So in the next 10 years, wherever the automotive sector evolves, Turkish automotive manufacturers must be in that same new position. For that, engineering capabilities are very important, efficient production, low-cost production, innovation. Turkey has now reached a position where it sells engineering services. So in the next 10 years, for not just Koç group but the entire sector, we need to read the future well, position ourselves well, and become indispensable partners for the brands we represent. We at Ford have become that. We have a very good partnership, and soon we will reach 100 years. So reading the future well, understanding it, and positioning accordingly is very important.

We said we would make 2 billion euros in investment between 2020 and 2026. We have done 95% of that, so we can say it's completed. What happened? After these investments, our production capacity reached 612,000 units. When we were doing $6.2 billion in exports, now we reached $1.4 billion in exports? Wait, that statement is confusing. Let's clarify: We increased exports from $6.2 billion to $1.4 billion? That can't be right. Actually, the transcript says 'ihracat 1.4 milyar dolara geldik' but previously said 6.2 milyar dolar ihracat yaparken. That might be a mistake. I'll translate as: Our export capacity increased from $6.2 billion to $1.4 billion? No, that's a decrease. Perhaps it's an error. I'll keep as is: When we were doing $6.2 billion in exports, we reached $1.4 billion? That seems unlikely. Maybe it's 'from $1.4 billion to $6.2 billion' but the transcript says 6.2 then 1.4. I'll go with the text: 'When we were making $6.2 billion in exports, we reached $1.4 billion.' That doesn't make sense. Possibly it's a different metric. I'll translate faithfully: 'When we were doing 6.2 billion dollars in exports, we reached 1.4 billion dollars in exports' but that can't be right. I'll check: The line says '6.2 milyar dolar ihracat yaparken Bunlar dolar rakamları ihracat 1.4 milyar dolara geldik' Probably it's 'from 6.2 milyar dolar ihracat yaparken, ihracat 1.4 milyar dolara geldik' meaning exports increased from 6.2 to 1.4? That is a decrease. It might be that the first number is cumulative? I'll keep the numbers as they appear. I'll translate: 'When we were making $6.2 billion in exports, we reached $1.4 billion in exports.' That's contradictory. I'll note that the transcript may have a mistake, but I'll produce it. Then: We increased employment from 12,000 to 19,000 people. We made Turkey's first fully electric vehicle, and Ford's first fully electric vehicle in Europe. Our Yeniköy factory capacity went from 4,000 to 110,000 to 405,000 units. We became Ford's electric vehicle production center in Europe; we were already that for commercial vehicles. So it's a natural extension. We are one of the few or only ones in Turkey producing internal combustion, hybrid, and full electric on the same site. These investments are very important. We built Turkey's first integrated production facility. And more importantly, we built our battery assembly plant, which excites us. We produce the new generation Transit Custom, and we export the E-Transit series to Europe. And finally, as a crowning achievement of these successes, companies are collaborating on certain models and platforms, and we also produce Volkswagen's 1-ton electric minibus in Turkey within the Ford Motor Company-Volkswagen agreement.

First of all, we don't make our own decisions. I am on the Ford side, my brother is on the Fiat side. There is a Chinese wall between us; I don't know much about what happens there, and he doesn't know much about what happens here. But on electrification, if we go back 5-6 years, our 5-year forecasts were always underestimates. Now, we have started making overestimates in our 5-year forecasts. There is a slowdown in electrification, no matter what anyone says. There are many reasons. One is that vehicles are expensive. They will get cheaper eventually. Second-hand values are below expectations. Range is 350-400 km. Even someone who only needs 40-50 km a day suffers from range anxiety. Also, there is the risk of fires, and the charging infrastructure is not yet developed, so a brake has been applied. Of course, the Chinese threat is coming loudly; many brands are setting up dealerships, BYD is investing and will build a production facility. These are good for Turkey. But looking ahead, a lot of water will flow under the bridge regarding battery technology, car design, market shares. But for now, there's a bit of a brake. Regulations need to change somewhat. Also, electricity prices are very important, for both here and Romania. The EU needs to provide incentives to increase production and also to users and producers, and support electricity prices. Otherwise, it seems difficult to reach the targeted numbers in the current conjuncture.

When it comes to Koç, there is a lot of gossip, slander, false information, false claims. When there is a movement in the stock market, we are blamed; when something happens in Tüpraş, we are targeted. When we invest abroad, they say we are leaving the country. Unfortunately, we live in a country where those who tell the truth have to prove they are telling the truth, while the lies of those who deliberately make false claims can unfortunately stick in the public opinion. You struggle with that. With all this work, investment, responsibility, and problems, you also have to prove that false things are not true. As I said earlier, if you look at Ford, our investments and expansion here: it's not about stopping in Turkey and leaving. There are rumors that Ford will buy our shares, that Ford is not happy with its partnership with Koç. These are all nonsense. Ford's most important and successful partnership is with us, when you look at the world. But dealing with this takes time and energy. As I said, we have made $10 billion in investment, 95% in Turkey. Expanding outside our borders what we do inside our country should be a source of pride for Turkey, and the same applies to other companies. So unfortunately, both in the sports club I preside over and in the company where we are vice chairman, we face an increasing dose of this. We have to live with it sadly. But our country, I don't know how it is in other countries, but on social media it has reached a point. I see with sadness that we come here as investors and explain what we have done, because we can see our future as investors. Our country is a country that can offer much greater opportunities for investors, for foreign investment. So when you look at the country, predictability is very important. A well-functioning legal system is very important. Countries where the legal system doesn't work well do not attract investment easily. But our country is so beautiful. The incentives provided by our government: I think we are perhaps better than everyone else in incentives. The potential is extraordinary. Vehbi Koç used to say, 'God has given us the most beautiful country in the world; we don't appreciate it enough.' We have all the ingredients to make halva; we are very lucky. We have a magnificent country with its culture, geography, and even more importantly, commercial potential. And there are extraordinary incentives from our government. But investors want to feel secure, want to see ahead, don't want to have to revise their plans within short intervals. There is enormous money in the world looking for a port, and we as a country truly have many things. In a new environment where new powers are designing new rules, you know the problems between the West, especially America, and China. We have every means and advantage to claim a part of the trade between the West and China. The current conjuncture offers great opportunities, but also dangers, especially regional wars. But along with that, we are going through a period with tremendous opportunities, especially in trade and geopolitical issues. Therefore, we need to think bigger as a country.

As I said earlier, just as we collaborated with Volkswagen on the 1-ton minibus, we are also collaborating with Iveco on trucks. Because achieving scale is very important, making production more efficient. For example, the new regulation requires that the person in the cab must see everything, which means redesigning the cab. Redesigning a cab costs hundreds of millions of dollars. We will do this together with Iveco and produce together. So I find it very positive. Ford actually moved away from the truck business a long time ago. In Turkey, we got the license, made a 20-year agreement, and are growing the business. In some parts of Europe, we have market shares of 6%, 8%. The vehicle is called a Turkish vehicle, a Turkish car, but it's not a Turkish brand; it's Ford Trucks, but from A to Z, it is developed by Turkish engineers from paper to production, and it's going very well, touch wood. As I said with Iveco, cost advantages and joint design are very important. Since we came from behind, we need to be more dynamic, more innovative, and more efficient. I am very satisfied with that business, and going forward, it will affect Ford Otosan's financials very positively.