Analysis
21 Sep 16

Turkish Fleet market set to continue 15% growth

Following last year's pattern, the Turkish Fleet market grew by 6% in the first half of 2016. Strong SME demand continued to power the progress. Fleet sales continue to grow in parallel to overall market growth. But will this rosy picture persist into 2017?
 
According to reports by Frost & Sullivan and others, there currently are a total of 13.3 million cars on the road in Turkey, with 1.6 million of those used in as corporate vehicles. Of these, about 18% are managed in Operational Leasing, for a total of 48,147 customers – an increase of 13% over H1 2015.
 
Significant increase
In its half-year report, Turkish Fleet and Lease Association TOKKDER stated that 68,221 new vehicles entered Turkey’s Lease fleet, representing 20.2 % of all new automobiles sold in Turkey in the first six months of 2016. Over the last few years, the Fleet share of overall car sales has increased significantly, up from 14% in 2013.
 
The half-year figure represents 57% of last year's total, equalling a growth of about 15% - another sign of the market's vitality. This brings the total Turkish Lease fleet to 293,800 units. In monetary terms: 4.8 billion Turkish liras (€1.45 billion) was invested in the fleet and lease sector in H1 2016, bringing its total value to 19.9 billion liras (€6 billion).
 
SME involvement
Meanwhile, in a sign that SMEs are getting more and more involved with leasing, the average number of cars per fleet customer has dropped from 11.1 units in 2010 to 5.7 units this year. The leading brands in the Fleet market are Renault and Volkswagen. Type-wise, the Fleet market is dominated by the C (53%) and B (27%) segments.
 
That is the picture so far. But how will the sector evolve over the coming months and into the new year?
 
“The Turkish Fleet Rental sector is still immature”, says Inan Ekici, Otokoc Otomotive and Country Manager for Avis/Budget & Zipcar. “In mature markets, the Fleet Rental market has a 30 to 45% share. So we still have a great growth potential. As vehicle prices increase and companies focus on cost and risk management, we will see this potential realised. We foresee 13% growth and a 300,000-vehicle park by the end of 2016”.
 
Sustainable improvement
Barbaros Citmaci, CEO Fleetcorp, has an even more optimistic forecast:  “At the close of the year, we foresee a park of around 305,000 and 315,000 leased vehicles, or around 20% of the entire corporate fleet”.
 
Despite fluctuating exchange rates and political turmoil, Ilkay Ersoy, General Manager at DRD Filo Kiralama, remains optimistic as well: “We assume that the Turkish Operational Fleet Leasing market will continue its sustainable improvement by 15%, in parallel with the last 3 years”.
 
Turkay Oktay, President of TOKKDER and CEO of LeasePlan Turkey is a bit more prudent: “Government’s efforts to vitalize the economy may work but will come with a lag, Fleet market will continue to grow but with a slower pace than last years”.
 

Authored by: Céline Gilson