Tofaş, Fiat's joint venture car
manufacturing company in Turkey, has posted a slightly lower
than predicted full year net profit for 2008 as it suffers
from the falling demand for new cars both at home and
abroad. Sales of cars dropped 14 pct last year in Turkey
while light commercial vehicles lost 21 pct. At the same
time export demand to Western Europe, Tofaş' biggest market
slowed down as consumers shunned the showrooms.
Tofaş is a joint venture between Fiat and
leading Turkish industrial conglomerate Koç Holding with
each partner having a 50 percent stake. Tofaş' factory at
Bursa is the global home to production of the Fiat Doblò and
the company is currently developing the next-generation of
the light commercial van due to be commercialised later this
year. The smaller Fiat Fiorino van is also built at Bursa in
a joint venture between Tofaş, Fiat and French carmaker PSA
Peugeot-Citroën. Founded in 1969, Tofaş has a history that
has always been intertwined with Fiat: the first car it
built was the Fiat 124, and today as well as the Doblò and
Fiorino, it assembles for domestic consumption and export
two Project 178 'World Car' family members: the Palio
(hatchback) and Siena (sedan).
For the 2008 full year Tofaş' consolidated net profit fell
slightly to 175.75 Turkish lira (US$106 million)
from 175.82 million Turkish lira the previous year.
Tofaş was expected to make 187.5 million Turkish lira,
according to the average estimate of thirteen analysts
surveyed by Reuters. Fourth-quarter net income was 53.47 million Turkish
liras, almost unchanged on the same period the previous
year.
Tofaş halted vehicle production for most of December to
account for falling demand, and last month the lines
stopped again. Turkish industrial output fell by 17.6
pct in December, the biggest decline since records began
twenty two years ago as a decade of major growth came to
an abrupt halt. Turkish vehicle production dropped a
massive 63.8 pct in January as other car manufacturers
to be represented in Turkey, including Ford and Renault,
joined Tofaş in halting production as the automotive
sector struggles. Around 80 pct of Turkish vehicle
production is destined for export markets.
Total domestic vehicle sales fell 39
pct last month and the passenger car sector was down
29.1 pct at 13,000 units. On Wednesday evening the
Turkish government hastily passed an economic stimulus
package which will include some help for the car
industry; there will be incentives to encourage vehicles
owners to scrap vehicles that are over 30 years old.
Turkey is also seeking an International Monetary Fund
loan of around US$25 billion, the biggest request to be
made in Turkish history.
