The Mobility Ecosystem Rapidly Prepares for Electrification With New Products

How Do You Evaluate the Future and Competitiveness of the Turkish Automotive Industry?

The automotive industry has long been the driving force of our country's exports with its consistent growth and competitiveness. As in every business line, the automotive industry's ability to closely follow today's global trends and offer products that meet customer expectations at the highest level is crucial for its competitiveness and sustainable growth.

 

Globally, perhaps the most pressing issues today are environmental pollution and climate change. Leaving a clean and livable world for future generations should be a priority for all of us. In this respect, for transportation, transitioning from fossil fuel-powered cars to low-emission vehicles, or in other words, electric cars, as quickly as possible is essential. The European Union, one of Türkiye's largest export markets, plays a leading role in combating climate change with its policies and continues its efforts in line with the goal of "making Europe the world's first climate-neutral continent by 2050". Türkiye is also rapidly preparing for electrification with its mobility ecosystem, increasing infrastructure, and new products. The launch of our domestic electric car TOGG, investments in lithium-ion battery production, and the growing number of locations with fast-charging stations are significant steps in this direction. I believe that with its outstanding performance in this process, our country's automotive industry will further enhance its competitiveness.

 

What Are Your Thoughts on the Development of the Car Rental Sector in Our Country?

According to the TOKKDER Operational Leasing Sector Report for the first quarter of 2024, the operational leasing sector's total assets reached 194 billion TL, with a total vehicle count of 254,000. Compared to non-bank financial institutions, our sector's asset size has reached a significant point. Our sector's equity capital has reached 95 billion TL, almost half of our sector's total assets. Our sector finances half of the required funds with its equity. The non-performing loan (NPL) ratio in our sector is below 1%, indicating a healthy structure. Although our sector's vehicle fleet has grown by 3-4% in the last two years, the actual growth potential of our sector is much larger. According to Eurostat data for 2022, while the number of cars per 1,000 people in the European Union is 560, this number is only 167 in our country. I estimate that there are 2.5 million motor vehicles used for business purposes in our country. Despite the many advantages it offers in terms of efficiency, savings, and risk management, only about 10% of vehicles used for business purposes in our country are financed through operational leasing. In the European Union countries, the share of operational leasing in financing company vehicles has increased from 48% to 57% over the past seven years. Based on all these data, I can say that our country's operational vehicle rental sector will grow steadily and sustainably in the coming period. 

 

I also think that the daily car rental sector will perform well this year. If the desired activity in tourism is achieved, the demand for daily car rentals will also be positively affected. In such a case, I estimate that the daily car rental sector will serve its customers with approximately 70,000 vehicles on average annually and 110,000 vehicles during the high season. 

 

What Are Your Predictions for the Future of Mobility and Car Rental? What New Trends Will Emerge?

Vehicle ownership is no longer among the priorities of the new generation. The "Y" generation in Europe and America has been preferring the rental system over vehicle ownership for a while. Interest in vehicle ownership further decreases with the "Z" generation. New-generation consumers prefer the "pay-per-use" alternative in transportation.

 

Our sector continues to digitalize its processes and provide holistic services through data-driven advanced analytics to design the best customer experience. Most sales in daily car rentals come from digital channels; we predict that almost all sales in daily car rentals will be made through digital channels within the next 3 to 5 years. Investments in digitalization by our sector will increase further. The world is also moving in this direction. Considering customer expectations and needs, providing customers with a faster and more comfortable car rental experience and keeping it sustainable through innovation and digitalization strategies has become the biggest focus of our industry. 

 

In parallel with policies to combat climate change and energy conservation, we expect the number of hybrid and electric vehicles in the car rental sector's fleet to increase day by day. The data from the TOKKDER Operational Leasing Sector Report supports this prediction. According to our report, the share of hybrid and electric vehicles in the operational car rental sector's fleet has increased significantly. While the share of hybrid and electric vehicles in the operational car rental sector's fleet was 6.5% at the end of 2021, this share reached 9.4% by the end of the first quarter of 2024. Thanks to the rental method, consumers can obtain electric vehicles with reasonable monthly rental payments, without the initial cost and the risk of second-hand price uncertainty.