Car parts makers expand abroad with acquisitions

Emre Özpeynirci - ISTANBUL / Hürriyet

Turkey’s automotive parts maker companies set 50 plants in five continents and 25 countries as the investments worth $2 billion in last two years.

Turkish automotive parts manufacturers are expanding across the world with $2 billion worth of international acquisitions in the last two years.

Sub-industry companies in Turkey that manufacture parts for some of the world’s biggest automotive firms showed a considerable hike in their foreign investments and acquisitions particularly after the global economic crisis, with the sub-industries pulling in more than one third of total automotive exports.

Turkish companies will see almost 50 automotive plants expand in five continents and around 25 countries, including the United States, Russia, Brazil, India and Mexico, according to data from the Association of Automotive Parts and Components Manufacturers (TAYSAD). However, there could be more investments with similar numbers that have not been reported to TAYSAD, as claimed.

The companies’ foreign investments in the automotive sector generally consist of direct plant investments, whereas there are also valuable acquisitions. This period is accepted as “peak” in terms of foreign investments that Turkish automotive parts maker companies’ international investments and acquisitions with 50 facilities reached $2 billion in last two years.

Developing countries in target

Turkish companies mainly prefer to invest in developing countries. While the companies find the investment incentives in these countries attractive, they also aim to support their present customers in global investments.

These foreign investments do not represent an alternative against the investment habitat in Turkey, but they could consolidate it, executives of TAYSAD said. They pointed out that the companies’ investments would continue to increase in the countries that have similar products with Turkey, such as customer portfolio and vehicle models.

A major portion of exports made in 2012 by the automotive sector totaled $19 billion in exports volume, according to figures revealed by Turkish Exporters Assembly (TİM). Despite a 5.5 percent decrease when compared to 2011 due to Eurozone crisis, it was still the dominant item in the exports list last year.