Italian daily newspaper Il Giornale last week suggested that Fiat is set to take a controlling interest in Tofaş, its Turkish-based auto manufacturing joint venture, although Fiat was very swift to deny that there was any truth in the report. A single-sentence statement issued in Turin by the Fiat Group - just hours after Il Giornale hit the newsstands -  read: “The news published today on an Italian newspaper concerning Fiat’s intention to acquire a controlling interest in the Turkish company Tofaş is a baseless rumour."

Tofaş is a joint manufacturing venture between Fiat and Koç Holdings, Turkey's leading conglomerate, which assembles the Palio, Albea and Doblò models. Tofaş is very rapidly growing in importance within Fiat's future planning strategy and its CEO Alfredo Altavilla is one of Fiat CEO Sergio Marchionne's key senior management team members, and a central figure in developing new industrial alliances for the Group. Tofaş carries out the sole assembly for the Doblò light commercial vehicle range, and is currently developing two new models for Fiat: a new low-cost saloon (codenamed "D200"); and a new small commercial van (codenamed, "Minicargo") which is being developed in conjunction with PSA Peugeot-Citroën.

Established in 1926, Koç Holding operates in the automotive, durable goods, food, retailing, energy, financial services, tourism, construction and IT industries. The shares of the 22 Koç Group companies are traded on the İstanbul Stock Exchange and the Group has consolidated 118 companies, 87,000 employees and 12,000 dealers as well as agencies and after-sales services. Koç Group operates having in mind international standards in the areas of corporate governance, corporate social responsibility, environmental protection, customer satisfaction and human resources. Il Giornale suggested last week that a complex transaction could see the Agnelli family's investment vehicle, IFIL, involved in the manoeuvring which could cost around 700 million euros. The newspaper also reckoned that two banks - PNP Paribas and Mediobanca - were both advising on the deal which could see Tofaş become Fiat's main strategic 'gateway' to the Asian region.

TOFAŞ

One of the greatest dreams that Vehbi Koç had in his life was to build an automobile factory in Turkey. Realizing this dream in the year 1968, he set up the Turkish Automotive Factory Inc., TOFAŞ in short. The foundations of the Turkish automotive industry were laid with this large project. Today, Tofaş still retains its quality as being one of the flagship organizations not only in the Turkish Automotive Industry but also in the Turkish economy. It produces vehicles for both the home market and many countries around the world. The foundations of the factory, of which the headquarters are in Istanbul, were laid on 13 April 1969 and production got underway on 12 February 1971.
 

The area of the factory was 735,170 square meters with 61,848 square meters being enclosed space. Now, following a continuous increase in investment it amounts to 1 million square meters, of which 350.000 square meters is enclosed space. Founded in the first place for producing 20,000 cars, Tofaş has grown by taking into consideration the continuously expanding home market and the export potential. As a result, it has become a modern enterprise which has the economic scale for producing 250,000 cars a year today.

Starting its serial production with the model 124 following its foundation, Tofaş launched the production series 131, and later on Tempra simultaneously with Fiat Auto. These models were followed relatively by the Tipo and Uno. Today Tofaş still produces the Palio, Albea and Doblò. The headcount of workers, technicians and engineers, which was 1,000 at the beginning has today come close to 5,000 with the rising capacity.

Having made ‘quality’ a philosophy of life from design to the materials used, from production to after-sales support, Tofaş marked a first in its industry by obtaining the ISO 14001 Environmental Management System Certificate in November 1998 following the work it initiated to that effect. In January, 2002 it was entitled for the second time to obtain the ISO 14001 Certificate. Having made an investment of 10 million dollars for the protection of the environment since the year 1990, Tofaş pays attention to using materials that do not lead to environmental pollution in the cars that it produces. In all Tofaş models, the catalytic converter system is used for preventing the waste gases from creating air pollution. It has also fulfilled long ago many other new rules of the European concerning air pollution. 95% of the waste created during production is recycled. The other waste that cannot be recycled is rendered harmless in accordance with the legislation. Tofaş adopted the norm Euro 3, which includes the new rates of European Union concerning emission, in all its products as of the beginning of the year 2001.

Like all the other leading automotive organizations of the world, Tofaş also dedicates special attention to the motor sports. Being initiated into the racing arena in 1970s, Tofaş brought about a fresh excitement to the race circuits with the Uno Cup which it organized in the year 1993. This adventure continued with Tipo Cup and Palio Cup. It obtained the title of Turkish Champion of Brands with the Fiat Palio Kit Car, the first rally car in Turkey, by competing in the categories of Rally, Rally Cross, Circuit and Escalation in the years 2001 and 2002. It's rally success is unbroken up to 2006.