Koç Group sweeps aside Turkish PM’s local car production push

ISTANBUL

Koç said his group was already producing truck brands, such as the Ford Cargo, which are almost 100 percent made up of Turkish sections. AA Photo

Ford Otosan Chairman Ali Koç has said his group does not intend to abandon its long-standing partnerships with global auto giants Ford and Fiat to create an indigenous brand, which has been urged by Prime Minister Recep Tayyip Erdoğan.

Erdoğan had repeated his call for a Turkish company to manufacture a locally designed and branded car during an inauguration ceremony of a new Ford Otosan plant in Yeniköy on May 22, stating “it’s time to brush off hesitations” and “Turkey dreams of developing its own brand.”

However, speaking after the ceremony, Koç appeared to brush off the prime minister’s pressure. “As I told our prime minister during the meeting when we invited him to opening of Yeniköy plant, we have two long-term partnerships that have clearly-explained boundaries and agreements, no matter how economical and feasible or good this idea [of local car production] could be,” he told reporters.

“According to our agreements, we, as the Koç Group, are not in a position where we can leave our Ford or Fiat brands and create another brand,” Koç added.

The government has been calling on local industrialists for the production of a local car brand in Turkey as part of its 2023 goals, which aim to make Turkey one of 10 largest economies.

Koç said his group was already producing truck brands, such as the Ford Cargo, which are almost 100 percent made up of Turkish sections.

Speaking at the same meeting, Ford Executive Chairman Bill Ford, also stressed that all the engineering of the Ford Courier, which is the carmaker’s latest commercial light vehicle that will be produced in the recently inaugurated Yeniköy plant, was undertaken in Turkey.

“We buy from Turkey. We use Turkish talent to develop the vehicle and export to world. We already do most of the things desired by Erdoğan,” he said.

Koç-government relations

The local car production issue had stirred a row between the government and Koç Holding, whose companies account for around 9 percent of Turkey’s GDP, last year, with Koç Holding Chairman Mustafa Koç describing the attempt as “commercial suicide.”

Relations between Koç and the government were also badly strained during last summer’s anti-government Gezi protests. A contract for Koç Holding to produce six corvette ships was cancelled after Erdoğan publicly slammed the group for allegedly supporting the protests, after Istanbul’s Divan Hotel, which is owned by Koç, was opened to protesters escaping police violence.

When asked about his attendance at the Yeniköy plant opening ceremony, Erdoğan admitted that his relations with the group had become tenser during the Gezi protests, but said he couldn’t remain indifferent to such a large investment.

“I’ve attended many opening ceremonies of the Koç Group. However, they saddened us during the Gezi process. Of course, they don’t admit it. They say, ‘We didn’t do such thing,’” he said.

“This investment is around $500 to $600 million. Inaugurating such an investment was an important thing for my country’s interest. As a prime minister, I wouldn’t hold a grudge against a group or a person that will invest in my country. It would be wrong,” Erdoğan added.

Ali Koç’s remarks also indicated that Erdoğan’s participation was a sign of a thaw in relations, as he described previous rifts as “misunderstandings.”

“These kinds of misunderstandings can happen in environments where sedition and slander are knee-deep. We prefer to focus on our business rather than politics,” he told reporters.

“We don’t plan our long-term future with short-term fluctuations. Both our past and our future is in Turkey. We are trying to do our best with our best intentions and sincerity on the path that we know is right. We see that this is closely watched and sometimes applauded by our government,” he added.