Turkish Automotive: Turning the corner (Ford Otosan stays BUY, Tofas downgraded to HOLD)
We believe the domestic LV market bottomed out in 1H19, but we see a V-shaped recovery as rather unlikely, given that affordability and interest rates remain high compared to the strong 2016/17, while the leasing market remains subdued. We maintain our BUY rating on Ford Otosan (FROTO), as we believe further export growth could be achieved thanks to double-digit ecommerce market growth in Europe and its impact on Ford’s large LCV line-up (Custom and Transit). On the other hand, following its recent outperformance vs. FROTO, we have downgraded Tofas to HOLD, as we see its domestic market outperformance as priced in already. With the upcoming new Doblo TOP contract, we see the potential for a downward revision, as actual shipments never reached the level of guaranteed demand and, given the lack of an ecommerce boost, the share of LCVsFord Otomotiv Sanayi is an automobile manufacturing company based in Turkey. Co. operates as a joint venture between Ford Motor Company and the Koc Group of Companies. Co. is engaged in manufacturing, assembling and selling motor vehicles, primarily commercial vehicles, imports and sells passenger cars and manufactures and imports and sells spare parts of those vehicles. Co. has two plants located in Kocaeli and Eskisehir, has a spare part distribution warehouse in Kartal, Istanbul and a branch in Tubitak Marmara Research Centre, Gebze Campus Technological Free Zone (TEKSEB).
WOOD & Company is the leading investment bank in Emerging Europe. Founded in 1991 and head-quartered in Prague, our footprint spans the region and touches investors around the globe.
A pioneer in Emerging Europe, WOOD executed many of the first CEE equity trades and landmark investment banking transactions. Our electronic trading platform was the first in the region, and remains the best. We are continually expanding our relevance and reach in these ever-evolving markets.
Our equity market share reflects our stature: 7% in Warsaw, 20% in Bucharest, 16% in Hungary, 40% in Prague and 5% in Vienna. Our distribution is unparalleled, with the largest salesforce in the region, servicing a uniquely diverse investor base.
We couple local expertise with a truly international perspective. With offices on the ground in the region, and in key financial hubs such as London and Milano, we are never far from our clients and we remain at the forefront of what’s afoot in the CEE emerging and frontier landscape.
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