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5 0 Y I L L I K YO L C U LU K


FROM AUTOMOBILE TRADE TO THE AUTOMOTIVE INDUSTRY


From Automobile Trade to the Automotive Industry THE FIFTY-YEAR JOURNEY OF TOFAŞ Research and text Arzu Karamani Pekin Consultants Ahmet Altekin Murat Kuter Translation Melis Şeyhun Çalışlar Project coordination Asu Ege Ece Göyen Book design Ersu Pekin Interview decipherment Gülden Sargın ISBN 978-975-7710-63-9 Printing and binding Mas Matbaacılık San. ve Tic. A.Ş. Hamidiye Mahallesi Soğuksu Caddesi No: 3 34408 Kağıthane/İstanbul Phone: +90 212 294 10 00 Fax: +90 212 294 90 80 book@masmat.com.tr Certificate No: 12055 Publisher Mas Matbaacılık San. ve Tic. A.Ş. Hamidiye Mahallesi Soğuksu Caddesi No: 3 34408 Kağıthane/İstanbul Phone: +90 212 294 10 00 Fax: +90 212 294 90 80 kitap@masmat.com.tr Sertifika No: 12055

Photographs Tofaş archives 32–33 (panoramas), 69, 107, 122, 124, 148, 150, 151, 155, 157, 159, 163, 169, 177, 178, 179, 185, 187, 188, 195, 196, 197, 209, 211, 216, 217, 218, 219, 223, 226, 230, 231, 232–233, 235, 237, 238, 241, 243, 245, 246–247, 250, 253, 255, 256, 274, 277, 282, 285, 290, 291, 294, 295, 304, 305, 306–307, 310, 317, 326, 332, 333, 335, 337, 338. Hadiye Cangökçe, Aras Selim Bankoğlu (Tofaş archives/ reproductions) 21, 27, 31, 32, 33, 34, 36, 38, 39, 41, 44, 45, 46, 47, 48, 49, 53, 54, 55, 58 (üst), 60, 61, 62, 63, 66, 72, 73, 75, 76, 77, 78, 80, 81, 82, 84, 85, 87, 89, 90, 91, 99, 100, 101, 109 (üst), 111, 119, 128, 129, 143, 171, 172, 173, 222. Murat Germen 10, 30, 104, 136, 194, 272, 279, 300 (alt), 322–323, 325, 343, 344–345, 346–347, 349, 350, 352–353, 359, 360–361, 378–435. Salih Zeki İnam, Serkan Şentürk, Metehan Kurt 58, 59, 94, 95, 96, 97, 120, 121, 125, 126, 127, 137, 138, 139, 147, 166, 167, 181, 182, 183, 198, 199, 202–203, 212, 249, 257, 308, 309, 311. Cumhuriyet newspaper archives 42, 63 (right), 67, 98. Nurkan Kahraman 312, 313, 314, 321. Arzu Karamani Pekin 109 (below), 114, 115. Alp Eren 300 (above and middle). Ali İhsan Gökçen 339, 340. Koç Holding arhcives 12. Doğan Batman 153.


CONTENTS

8 — 27 THE 1960s AND THE PRIOR “CARRIAGE AFFAIR 28 — 101 THE 1970s: “A CAR FOR EVERYONE” 102 — 133 THE 1980s: THE CHANGING ECONOMY AND THE NEW TOFAŞ AUTOMOBILES 134 — 191 THE 1990s: INNOVATIONS IN TECHNOLOGY, IMPORTANT MILESTONES 192 — 269 THE 2000s: TOFAŞ ON THE RISE AGAIN 270 — 361 THE 2010s: FUTURE PROJECTS OF TOFAŞ 362 — 377 DRIVING THROUGH TIME… RIDING INTO THE FUTURE… 378 — 435 THE PRODUCTION JOURNEY OF A VEHICLE 436 — 447 TOFAŞ FROM PAST TO PRESENT


We regard our 50th anniversary as an opportunity to review, in detail, the growth of Tofaş and the Turkish automotive industry and to honor the valuable individuals who have enriched Tofaş’s journey by accompanying it along the way. More than 30 thousand people that walked through the doors of Tofaş over half a century created their own stories under the same roof. We hope that as you read their stories, our philosophy of courage, productivity, improvement, world-vision, progress, and constant renewal will also be a source of inspiration for you. We are fully convinced that our vision to stand as a highly praised, leading automotive company will always carry us into new horizons. As ever, we are ready for the future in our 50th year. We would like to thank everyone that accompanied us on our journey.


The 1960s and the prior “carriage affair”


“When an automobile was brought to the Istanbul customs for the first time, it had no listing on the customs tariff. What could this vehicle be called?... A verbatim translation of an ‘automobile’ in Turkish, it was duly called zatülhareke (that which moves on its own)!... Hüseyin Avni Şandan Cited by: Yılmaz Çetiner, Otomobilin Öyküsü. Türkiye’de Otomotiv Sanayii Nasıl Kuruldu? Anılar-belgeler-fotoğraflar (İstanbul: Milliyet Yayınları, 1996), 32.


According to

Sermet Muhtar Alus, Züheyr Zade Ahmed Pasha, one of the pillars of Basra and a member of the Council of State’s Tanzimat Unit, had ordered first automobile that “made an appearance” in Istanbul. Known as “çifte kumrular” or love-doveys, the Pasha’s daughters would ride around in the car driven by an Ottoman-Greek lad with a “curled moustache,” while women fainting at the sight of carriage horses rearing up by the noise of the vehicle and its blasting horn would fret and fume exactly in this manner. Alas, to no avail! The first automobiles that curdled the blood of these ladies during the proclamation of the Constitution of 1908, would soon fill the streets of big cities, most notably of Istanbul in a matter of a few decades, as roads multiplied as rapidly as the number of cars did. Car owners may have been less than a handful at first, but as commerce evolved into industry, “buying a car” would no longer constitute a distant dream. In each country, things progress in line with the makeup of that land, its people, and their experiences. If we are to look back from the 60s into the 50s, we realize that automobile production was a highly debated subject and that different people defended different views at different times. Should Turkey have gravitated towards agriculture or the automobile industry? Some would argue, “What good is the automotive industry for a country that can barely meet its own needs?” How involved would the government have to be in a land with serious capital problems? There was strong alliance among diverse political groups that regarded engine production, an integral part of the military strategy. The debates ended as state intervention prevailed; The Mechanical and Chemical Industry Corporation (MKEK) united several engine-production companies and state economic enterprises (KİT) and strived to create an investment force at the time. MKEK would later become one of the first partners of Tofaş. Turkey wanted to produce automobiles, but similar to most developing countries, the urgent need was in the fields of agriculture and transportation. Therefore, advancements were first made in these areas.

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TofaลŸ founder Vehbi Koรง at the wheel of the Tempra.


Adapazarı Factory, founded by Türkiye Zirai Donatım Kurumu (Turkish Agricultural Supply Institute) in 1944, to manufacture agricultural vehicles and engines, Türk Traktör (Turkish Tractor), founded in 1948, by Türk Hava Kurumu (Turkish Aeronautical Institute), as an airplane engine factory, and, transferred in 1951 to MKEK, to produce tractors and agricultural tools, and Federal Türk Kamyonları Fabrikası (Federal Turkish Trucks Factory), were among the precursors of the movement that began prior to automotive production, geared towards private consumption, which had not yet been extensively deliberated upon. During that period, factories were established with the logic of combined production; Türk Traktör, for example, could manufacture all the parts from the engine to the exterior body of the truck. Over the years, this kind of factory organization was relinquished across the world and the concept of local production dominated by a supplier chain would become much simpler. When did the automotive industry become a topic of discussion in Turkey? Heroes, in every field of every country are to be found among its own people. The automotive industry was created through the efforts of pioneers who spent substantial time, energy and money and endeavored selflessly and relentlessly towards this goal and the diligence of people who believed in them and in the future, creating their own heroes. Their names known or unknown, from workers and engineers to technicians and administrators, countless people combined their skills, expertise, and wisdom to establish a highly unfamiliar sector by joining forces, training teams that would carry this sector into the present. The person to give them the “go ahead” was none other than Vehbi Koç, who had undertaken virtually all the initiatives of Turkish industry. While everyone else deliberated over the disadvantages, Vehbi Koç was not only able to imagine the extent to which each one of these endeavors would reach and outline the ways to get there, but he stopped at nothing to pull up his sleeves and get right down to work. When Koç acquired the Ford franchise in Ankara in 1928 and embarked upon the “automobile business” in his words, he had all but one objective: to make progress in this field. He was absolutely certain that business would thrive… Vehbi Koç had one principle he embraced throughout his professional career and advised to others: “pick good executives!” He did exactly that from the onset and appointed Bernar Nahum to the Automobile Department of Koç Ticaret A.Ş. This business collaboration that began in 1944, this incredible union thus constituted the beginning of one of the most important endeavors of Turkey’s automotive industry. If one is allowed to spend only a few words on the history of the automotive industry in Turkey, one of the first names to emerge is Vehbi Koç, whereas the other is Bernar Nahum. Nahum dedicated his 60 yearlong professional life to the establishment and growth of the automotive sector in Turkey. Recognized internationally today, Turkey’s automobile industry owes tremendously to his determined efforts, skills, initiative, and dedication to his ideals. While the Koçzade Vehbi Company became

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a Ford agent in the October of 1928, he had begun working at the Buick agency as a young man of 17 in June of the same year and, almost 15 years later, had transferred from the Burla Company to Koç Ticaret as now an expert of the field. The 44 years of collaboration he shared –along with other committed individuals– with the Koç Company brought Turkey from automobile trade to automobile production. Business at the Automobile Department of Koç Ticaret expanded considerably over time and an executive decision was made to transform the department into a company. Otokoç was thus founded on January 21, 1958. Two years later on August 2, 1960 Otosan was born. THE E ARLIEST COLL ABOR ATION BET WEEN KOÇ AND FIAT

The first commercial ties between the Koç Automotive Group and Fiat had begun in the 1950s. In September of 1953, Bernar Nahum met with a Fiat official for the first time and learned from him that “Fiat’s smallscale endeavors Turkey could only grow if they were to be handled by a company such as Koç.” Eventually, an agreement-in-principle was reached; accordingly, business would be conducted in the Çukurova region and until a new organization was set up in Adana, Fiat’s truck and spare parts franchise would be taken under wings of Egemak Company. After the draft dealership agreement was signed, a limited company was founded with the Adana dealer Fevzi Dural. Soon thereafter on July 29, 1956, Tormak A.Ş. was established with a capital of 600 thousand Lira with the following partnership: 40% Tetico, 20% Egemak, 30% Fevzi Dural, and 10% Hüsamettin Dural. Tormak became the first property owning company of the automotive group. Once Egemak became the general distributor of Türkiye Traktör, relations with Fiat entered a significant development period. In fact, attempts were made to establish a common truck production-assembly plant. Italian executives visited Turkey countless times and were engaged in meetings with official authorities. However, their application was denied on the grounds that the supply had already exceeded the need in this area. With the opportunities provided by the Law for the Encouragement of Foreign Capital, petitions of objection were submitted to the ministers of commerce, industry, and finance, but to no avail. Earlier, Tormak had taken advantage of the quotas to begin importing trucks from Fiat and, through a special quota accepted in 1958, had even imported a number of automobiles. All these endeavors had warmed the relations between Fiat and the Koç Group. Consequently, the idea to co-establish a factory with Fiat, which never came to life with Ford, began to prevail. In his memoirs, Vehbi Koç writes that his faith in establishing an automobile industry in Turkey was strengthened in the early 1960s; the letter he wrote to Bernar Nahum on September 14, 1963 is a clear reflection of this:

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I believe… Trucks and automobiles must be manufactured in this country. There will be a large car market. The Ereğli factory will be completed in 1965. A large part of the raw materials will be provided at this country… You know the rejection letters we received in response to our persistent offers we made to Ford to produce sheet metal car parts. With their expertise, models, and their familiarity with us, Fiat is best suited for this endeavor. I would like to visit Yugoslavia and Spain to see their production on site. After this point, assembly alone will not bear any long-term consequences.

Meanwhile, work on the Anadol prototype had begun in 1963 and the car was released within a matter of years in 1966 despite all the obstacles in the way, allowing the remarkable story of Anadol to assume its place in the history of automobile production in Turkey. Bernar Nahum relates his thoughts on Anadol in his book as follows: Despite what most people thought, Fiat representatives followed the positive progress of our Anadol project, which, in turn, encouraged them further to pursue our desire to design a new car. Hence, they began to consider their negotiations with us more seriously. In fact, it is even possible to say that if it weren’t for the Anadol project, the establishment of an automobile industry in Turkey may have been delayed for a longer period of time. … What the Anadol car taught us, made us more knowledgeable and more experienced as we embarked upon the Fiat automobile project. It gave us the advantage of being on a par with the Italian group as we entered negotiations.1

AN OFFER FOR FIAT: AN AUTOMOBILE FAC TORY IN TURKEY

As days went by, each new year of the 1960s brought along another exciting initiative for the Koç Automotive Group. As one new endeavor was under way, deliberations on the next one ensued. Every step was interconnected and part of the progress being made. On one hand, works on Anadol, a fiberglass automobile continued, whereas on the other, the idea of setting up a car factory in Turkey with Fiat was being articulated. In 1964, Fiat decided to conduct a survey in Turkey. However, the study yielded negative results; the Italians decided that it was still too early to set up this kind of an industry in Turkey. The outcome was not enough to deter Vehbi Koç and Bernar Nahum. In fact, in April of 1965, the two, in Nahumn’s words, “Traveled to Torino together to meet with Fiat’s reigning boss Prof. Valetta.” Upon Can Kıraç’s suggestion, Vehbi Koç went horseback riding with Prof. Valetta. This warm encounter marked the beginning of the acceleration of the traffic between Italy and Turkey. 1

Bernar Nahum, Koç’ta 44 Yılım, Istanbul 1988, 160.

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Bernar Nahum’s next visit to Torino was two months later, on June

7th. The first serious meeting on “establishing an automobile industry” was

held the next day. The meeting included the Fiat team led by L. U. Vinea, as well as other executives, Fiat’s marketing and technical units, and plant establishment groups abroad. Nahum worked until the next morning to bring together the outcome of the meeting and wrote a memorandum. This memorandum is the first written offer considered as the real starting point of the Tofaş factory. The date has been recorded as June 9, 1965. Following extensive negotiations with the executive group presided by Vinea, a decision was made to manufacture the Fiat 850. The project would cost an estimated amount of 300-350 million Turkish Lira. 1965 left its imprint on the automotive history of Turkey not solely by this memorandum, but by another important project letter: As Otosan strived to obtain permission to start producing Anadol, Vehbi Koç presented then-Minister of Industry Mehmet Turgut a report entitled, The Koç Automobile Group Projects on the Automobile Industry on December 8, 1965. This report was both an assessment of the Koç Group’s initiatives and endeavors and contained details of the said projects. The subject treated under the heading “our second project” in the report pertained to the factory to be established with Fiat:2 … We have been working on the second project in collaboration with Fiat for almost a year. This project is in need of foreign capital; it is quite large and requires a capital of approximately 150 million Turkish Lira. 35% of this amount will be provided by Fiat, 35% by a public economic enterprise to be determined by the state –quite possibly the Mechanical and Chemical Industry Corporation (MKEK)-, 15% by our group, and the remaining 15% by two Fiat dealers outside of our group and one or two national banks. The project was well prepared in complete detail. The partnership project was complete. As soon as the government was ready to appoint the state-owned economic enterprise, negotiations and the work could begin at once. This project is comprised of a two-door automobile with a sheet metal body (Compared to our first project –that would be Anadol- the Fiat 850 model is much smaller, both in terms of horse power and in size) and two four-door models of a size relatively similar to the first one, but with a slightly higher engine power. The project entails the gradual local production of the mechanical parts and the engine in particular. The body parts are to be imported. In time, through the growth of the project, we may already estimate the investment alone to reach 250 million Turkish Lira. Should we decide on the start of the project today, the first vehicles may be out of the factory in two and a half to three years at best and can go on the market. 2

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Bernar Nahum, Koç’ta 44 Yılım, Istanbul 1988, 129.

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The project is exhaustive and demands further studies; the acquisition of a number of machines will be necessary and these machines will be delivered in a year, after the factory orders have been completed. If this project is realized, the mechanical portion of the automobile industry in Turkey will have begun. We hope that the government will appoint a state-owned economic enterprise for this project, enter negotiations, and, if found appropriate, that the Minister of Industry will pay a visit to Fiat in Italy.

The report ended with the observation that the two projects and complementary and offers a summary of projections for the future years, expressing, in conclusion, the wish that the “projects will not be drowned in red tape.” Intended to set the government in motion, as this letter was being deliberated by officials, relations with the Italians were moving forward rapidly in 1966. Finally, on March 12, 1966, a letter was sent to the Ministry of Commerce and Industry, offering the creation of a committee for the execution of this project. Meanwhile, after touring the Paris Fair in May of 1966, Vehbi Koç traveled to Madrid, Spain to visit the Seat factory. He was hoping to explore the factory to see on site how the system worked. After this visit, he was convinced that a Fiat factory of this kind could be established in Turkey and that an automobile with sheet metal body parts could be manufactured. In June, Fiat, sent a “letter of intent” to the Ministry of Commerce and Industry to reveal its commitment to the project. The wheels were set into motion in the ensuing years: On September 12, a formal request was made to Türkiye Sınai Kalkınma Bankası and İş Bankası to become partners in the project. Both banks replied that they would look positively upon putting in 10% of the capital without exceeding 20 million lira. Later, the participation of Sınai Kalkınma Bankası was not accrued. MKEK’s participation was realized with 25% capital, 10% of which would later sold to the public and the necessary Cabinet decision was passed in accordance with the laws and regulations of State Economic Enterprises (KİT). In November, the Fiat team visited Turkey to conduct another market study. Presided by Brizio, the team settled into an apartment in Taksim and worked for a month and a half. Finally, in the report drafted on December 27, 1966, it was determined that following a strong marketing organization, there was a potential to purchase 20 thousand cars per year in Turkey. According to the projections of the Fiat executives, certain parts of the factory would work in two shifts. In order to recover the costs, 14 thousand of the 20 thousand cars had to be sold. At this point, the Koç Group had another proposal: noting that the market, accustomed to large American cars, would find the Fiat 850 considerably small, a different model had to be selected. This point was extensively deliberated.

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Lengthy discussions ensued and finally ended with a three-day meeting that began in Torino on February 23, 1967. Bernar Nahum and Can Kıraç represented Koç Group during deliberations. Can Kıraç had joined the Koç Ticaret’s Department of Automobiles as, in his own words, “Bernar Nahum’s apprentice” in 1950 and had partaken in the Koç-Fiat project through Egemak in 1956. Can Kıraç took the minutes of this meeting and made them into a report. Extending from the pricing of the automobile to be manufactured and licensing details to the work schedule, this memorandum assumed its place in history as the agreement that would lead to Murat 124 to be released four years later: Both parties agree that production at the factory in Turkey will begin with a single model, namely the 124 Saloon type. At this point of the story, let us leave it to Can Kıraç to paint a portrait of Bernar Nahum with whom he began working at the age of 23. Great investment projects have always been executed by teams. Each team requires a maestro to succeed. The conductor of the Tofaş project was none other than pioneering businessman Bernar Nahum. In the course of the 41 years that have passed since my first day and the day I retired from Koç Holding as CEO, I have always taken pride in working with Monsieur Bernar Nahum. Raised in the early days of the Republic, Nahum was among the leading figures of the Turkish business world. His efforts and endeavors can be seen in every stage of the establishment of the Turkish automotive industry and the growth of car dealerships. With his dedication, faith in and loyalty to his country, he was a pioneer. In the business circles, he was a well-respected leader that refrained from pomp and flare. Apart from all these redeeming qualities, he was a humble thinker and an infallible judge of character. A practical leader, Monsieur Bernar believed in numbers. According to him, it was possible to accurately measure almost anything. After familiarizing himself with a new subject, he would pay attention to detail and focus his concentration on avid learners who would strive to improve themselves. This is why his close friends would call him “Hoca” or the Master. Throughout his life, Monsieur Bernar prepared, with boundless energy, his colleagues for the future by offering hope and encouragement and thus defined the work culture of the Koç Group. In return, members of the Koç community generated the tradition of addressing him as “Monsieur.” With his expertise of 60 years, the values he instilled in others, the individuals he trained and guided, his accomplishments and glories, he truly deserved to be honored as “Monsieur” in the Turkish business world. I respectfully bow before Bernar Nahum’s memory on the 50th anniversary of Tofaş.

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STEP BY STEP TOWARDS THE FAC TORY…

The most important step of 1967 was the drafting of the preliminary project of the factory and, in line with the orders of the Ministry of Industry, its presentation to the Undersecretariat of the State Planning Organization on September 26th. The year; however, also had some unpleasant surprises in store… Initiatives taken by competing firms in the automotive industry could have reversed Koç Group’s ongoing negotiations with Fiat as news that could potentially unnerve the Italian executives circulated: Indeed, in September, Oyak announced that they had entered an agreement with Volvo to establish an automobile factory. The announcement prompted Fiat executives to invite Bernar Nahum to Torino to assess the situation. He explained that as Volvo would be an upper-class vehicle, it could not possibly compete with the 124, but failed to convince the Fiat executives. Nahum made a decision right there and then, which demonstrated the courage and initiative it took to overcome these obstacles. During the meeting he held with Calvi and Pittagula, along with Mr. Minola, who was in charge of Fiat’s commercial activities at the time, he made an offer: “A distribution company to be set up by Koç Holding will be responsible for purchasing 70% of all production; in other words, this company will take over the responsibility of purchasing the number of cars required to run the factory without any loss. This can be added to the protocol to be signed.” Let us hear the rest from Nahum: They asked what we would do with the cars we can’t sell. “We’ll drive them into the sea.” I responded. Of course, they did not get the reference. I explained it to them. I also told them where Sarayburnu is located and how strong the currents are there. It was past 9 PM. Finally, they smiled a little and said, “It is evident, we cannot give up this project either,” they said.

Vehbi Koç’s reaction to these developments was as follows: “You are in charge of this project. If you feel you will sell, let us hope that things will go as planned and that you will succeed.” An accord was reached, but unpleasant surprises were endless; as if testing the patience and commercial intelligence of the Koç team, another situation that would unnerve the Fiat executives emerged. During the days the Fiat decree was published, Oyak’s agreement with Volvo was broken, for Volvo had thought that once Koç signed with Fiat, the two brands would not sell in a small market such as Turkey’s. Thus, Oyak gravitated towards Renault. At this exact point, the Koç team began to work even harder, as it was clear that another competitor with a similar price range and target group would be released around the same time. Nahum once again headed to Torino, but this time, Fiat gave him the go ahead. Slowly, the project was being put into action; the struggles began to bear fruit. Finally, in July of 1967, the original contract of the company to be established was drafted. Vinea traveled to Ankara at the end of

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that month and held another meeting with the Ministry of Industry on August 1st-3rd. Soon thereafter, on September 23, Fiat officially applied to the Ministry of Industry. In November, further negotiations were held in Italy, a protocol of consensus was drafted and at the end of the same month, meetings were held with the State Planning Organization (DPT) for the decree to be issued in accordance with the Law number 6224 for the Encouragement of Foreign Investment. Quite evidently, nothing was proceeding as quickly as they are conveyed in these few lines. The meetings with DPT were quite a challenge. The engineers at the Planning Organization were asking Fiat to forgo a large part of its demands, settle for less profit, and for locally manufactured parts to reach 67%. The meetings were extremely tense, though they often ended in some reconciliation. Nahum, who wrote about these meetings in detail, summarizes the final destination as follows: The most troublesome issue was determining capital and reserves, as well as the rate of profit. Finally, through Vehbi Bey’s intervention, the Fiat Group agreed to a 16% rate of profit and a consensus was reached.

Once DPT and the Ministry of Industry expressed their opinion in favor, the government decided for Koç Holding, MKEK, İş Bankası and Fiat to establish an associated company with Aliberti brothers of Izmir, who were the Turkey representative in car sales. With the approval of the Italians, a draft resolution for the Cabinet was prepared and presented. Once the resolution was affirmed, after three years of intensive research, the Cabinet decision on the founding of Tofaş published in Resmi Gazete (Official Gazette) on May 13, 1968. The decree entailed the establishment of Tofaş with the partnership of Fiat automobiles, Fiat license, and partnership, and a 13.8 million USD loan from the Italian government with the support of Fiat to manufacture twenty thousand automobiles. It was the birth certificate of the factory… Meanwhile, we must mention another meeting held in Torino with Fiat Chairman of the Board Giovanni Agnelli in 1968: the chair, board members, and members of the supervisory board of Tofaş were appointed during this meeting, which included Koç Vehbi Koç, Rahmi M. Koç, and Bernar Nahum from Koç Holding, as well as İş Bankası VP Ayetulah Üsküdarlı, MKEK General Director Mehmet Özgür, VP Turhan Onur, Finance Director Mümin Gökgönül, and Giovanni Agnelli and his brother Umberto Agnelli, and other executives of Fiat. In his book entitled, Sanayide Bir Mühendisin 60 Yılı, Turhan Onur then-VP of MKEK, relates the early years of Tofaş and mentions this meeting in his detailed account of that period. His accounts relate the period following the establishment of the company and reveal the magnitude of the work extending from finding the land for the factory to the selection of the machinery: This meeting was followed by the first official board meeting. MKEK General Director Mehmet Özgür was also present at that meeting. The

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The meeting that brought together Vehbi Koç and Giovanni Agnelli in Torino in 1968 during the founding of Tofaş. From left to right: Turhan Onur, Giovanni Agnelli, Mehmet Özgür, Vehbi Koç, Ayetullah Üsküdarlı and Rahmi M. Koç.

chair of the board, board members, and supervisors were selected. It was decided that the executive board would comprise as board members Bernar Nahum, Turhan Onur and General Director Giuseppe Guarnero. During the meeting in Torino, the executive board was assigned with the task of purchasing workbenches, equipment, machinery from Turkey and abroad, conducting preliminary studies for the selection of the factory’s location (which I was later given the task of finding), supervise construction and assembly practices, and complete production on time, under the best conditions with optimum cost and durability. 3

TOFAŞ NAME , FOR THE FIRST TIME

On July 23, 1968, in other words, two months after the decree was published in Resmi Gazete, all Koç automotive members came together for a highly important ceremony. It had only been two years since the most prestigious and only five-star hotel of capital Ankara had opened. It was one of the rare examples of modern architecture at the time and was the most popular venue for large business meetings and important ceremonies. On July 23rd, the hotel welcomed such a momentous occasion: officials of relevant ministries and executives of Koç Holding to sign, in the presence of a notary, the Original Agreement of an automobile factory that would begin production in Turkey. The agreement was published in issue no. 3478 of the Turkish Trade Registry Gazette on October 9, 1968. 3

Turhan Onur, Sanayide Bir Mühendisin 60 Yılı, Istanbul, 152.

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TÜRK OTOMOBİL FABRİKASI A.Ş.: Foundıng: Article 1- A joint stock company has been established in accordance with the provisions of the Turkish Trade Law between the founders, whose names and addresses are mentioned below: • Koç Holding A.Ş.: Istanbul, Meclisi Mebusan Caddesi 33, T.C. • Makine ve Kimya Endüstrisi Kurumu: Ankara, Tandoğan Meydanı, T.C. • Türkiye İş Bankası A.Ş.: Ankara Ulus Meydanı, T.C. • Ege Petrol T.A.Ş.: İst. Cumhuriyet Cad. 31, T.C. and, • Internationale Holding FIAT S.A.: Piazza Ciocarro 2/V, Lugano Switzerland. Trade name: Article 2- The name of the company is: “TOFAŞ Türk Otomobil Fabrikası A.Ş.” and is henceforth referred to as “Company” in this original agreement. Intent and fıeld of busıness: Article 3- The Company is founded with the primary intention of the production, assembly, and trade of the engine, parts, and spare parts of automobiles of FIAT license as part of the automotive industry. In the application of this article, the provisions of decree no. 6/9910 and future amendments to this decree or provisions of new decrees that may be enacted in the future will be taken into consideration.

The names of the individuals present in the first board of directors were listed as follows at the end of the agreement: • Eng. Luigi U. Viena (representing Internationale Holding FIAT S.A.) • Eng. Cesare Bracco (representing Internationale Holding FIAT S.A.) • Eng. Luigi G. D’Agliano (representing Internationale Holding FIAT S.A.) • Dr. Cesare Rolando (representing Internationale Holding FIAT S.A.) • Mr. Turhan Onur (representing MKEK) • Mr. Mümin Gökgönül (representing MKEK) • Mr. Vehbi Koç (representing Koç Holding A.Ş.) • Mr. Bernar Nahum (representing Koç Holding A.Ş.) • Mr. Ayetullah Üsküdarlı representing (T. İş Bankası A.Ş.)

One would think that naming Tofaş was quite simple, after all, the project in question was an automobile factory and “Turk” had to be a part of it, which would naturally lead to Tofaş, namely Türk Otomobil Fabrikası or Turkish Automobile Factory, abbreviated as the acronym TOFAŞ… However, we must note here that six months after the Original Agreement was published on October 9, 1968, an amendment was made and it was re-published in April of 1969. For, this amendment concerns the name of the factory and is made not once, but twice. Let us take a look at a footnote in the Agreement: The title of the Company in Article 2 of the Original Agreement published in issue no. 3478 of the Turkish Trade Registry Gazette on October 9, 1968

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is mentioned as “Türk Otomobil Fabrikası AŞ.” however, pursuant to the amendment made in the same issue, the title of the company has been changed to “Tofaş Otomobil Fabrikası A.Ş.” The change of title has been added to the end of the original agreement text in the aforementioned Trade Registry Gazette and has been published separately. In this instance, once the Cabinet conceded to the use of the name “TÜRK” in the company name with decision no. 6/10997 and dated 19. 11. 1968, the company name has been changed to “Tofaş Türk Otomobil Fabrikası A.Ş.,” and has been registered as such and the pertaining announcement has been made in issue no. 3627 of the Turkish Trade Registry Gazette on April 10, 1969.

An interesting meeting took place in Torino in the early months of 1969: among the group that traveled to Torino were Vehbi Koç and Bernar Nahum, along with Rahmi M. Koç. Serving as the General Coordinator of Koç Holding at the time, Rahmi M. Koç had begun his career at the age of 28 in the automotive sector and had learned much from Nahum. They had shared the entire experience in their dealings with Fiat and had traveled extensively together. This time, they were in Italy for a very high-level meeting and had requested an appointment from Giovanni Agnelli to discuss certain topics they deemed problematic. The appointment was at the Mirafiori factory at 11 A.M. Writes Nahum, The meeting proceeded in a very cold atmosphere. Vehbi Bey was trying to control his temper and was giving curt answers to the questions being asked. Rahmi Koç was acting as the translator. I could do nothing but worry. What began as a tense meeting ended the same way. We returned to the hotel immersed in thought. As we were having dinner at the hotel, M. Vinea called me to tell me that M. Giovanni Agnelli was inviting us to dinner at his house. He stressed that he had never before invited any dealers, clients, or prospective partners to his home and insisted we accept the invitation. After telling him that we would respond in half an hour, I conveyed the telephone conversation to Vehbi Bey and Rahmi Bey. We agreed to go. M. Giovanni Agnelli, his brother M. Umberto Agnelli, their wives, and M. Pedrana of Fiat were also present at the house. Cocktails, dinner, and conversation continued into midnight. This invitation dispersed some of Vehbi Bey’s concerns and hesitations about Fiat. Furthermore, it allowed Fiat executives to act in a more tolerant and conciliatory manner in their dealings with us.

FIRST TOFAŞ TE AMS, FIRST STEPS TOWARDS THE FAC TORY

When you work for the same company for an extended period of time, were young when you first entered that institution and find yourself

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well into your middle ages by the time you retire, the time you spent with your colleagues amounts to a longer period than the time you spent with your family. Especially if you had been there from the onset and witnessed the growth of that company, with you as one of the people helping it flourish, it means that you have dedicated the most fruitful years of your life to that particular business and have become one with it. The adventure of Tofaş began exactly with that kind of a dedicated group. With the connections they established, efforts to transform difficult tasks into a positive outcome, these individuals welcomed every challenge to channel them into their work with true dedication, selflessness and hard work, and thus shouldered the establishment of an entire industry. From workers to engineers, executives to employees, all understood that it fell upon them to take the responsibility of making most of the chance that came the country’s way; when the need arose, they undertook all sorts of chores, never refrained from performing any kind of tasks, poked into tasks, which were not meant to be under their responsibility. Thus they served both to the institution and to the city in which they lived. They generated a concept that came to be known as “Tofaşlılık” (Tofaş-ism), a notion that evolved and changed over the years, but always maintained the essence of being a part of this institution… The first members of the Tofaş team were only a handful. In 1969, when Tofaş was in the early stages of its establishment, Erdoğan Karakoyunlu was among that handful as the Vice President in charge of financial and administrative affairs. He was a young account specialist from the Mülkiye, the School of Social Sciences. He had begun working at Tofaş upon Koç Holding financial group director Samim Şeren’s request, with the approval of Bernar Nahum. The rest of the team comprised the following individuals: Italian general director Giuseppe Guarnero, an Italian financial affairs assistant, who worked alongside Erduğan Bey, but was only in charge of transmitting information to Italy and serving as the editor, the personal chauffer of the general director, an office boy, and a janitor… The team began working at a 100 square meter flat on the top floor of the five-storey Sakarya Apartment above the PTT overlooking Şişli Square in Istanbul. As per the agreement with the Italians, the following plan was to be pursued in the administration of the company: the general director and the factory director would be Italian and their deputies would be Turkish. A Turkish engineer would be appointed to the Italian department heads and chiefs and the number of Italians would be reduced in time. Signor Guarnero managed Tofaş for a long time; he stayed with the company until 1980. He was extremely resourceful, conciliatory, and experienced; he was quite the gentleman, much liked by everyone. Selçuk Öncer, who began working at Tofaş in 1973 as a finance, budgeting, and running accounts specialist, retired as the director of corporate relations and internal auditing in 2014, and is still serving as a consultant in the company, offers a rather vivid portrait of Guarnero:

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He was a very classy man. He walked around in his fedora and wore a cream-colored suit in the summer. His pants were always creaseless. He would take the elevator up, but always walk down. I never forget his colored pens with thick tips; he would always sign his large signature with those. He was very interested in antiques and souvenir coins minted at the Darphane… We would collect samples for him from Darphane. His salary would be brought from there as well. At the time, salaries were always put in envelopes and distributed in cash. We would collect a certain sum from the bank and the cashier would envelop the necessary amounts. Guernaro’s always consisted of untouched banknotes.

He was remembered by everyone who ever worked with him. An anecdote by İnan Kıraç beautifully portrays Guarnero’s connection with others: One day, I visited the holding; it was located immediately across from the port at Kabataş…. On the floor, where Suna’s room was located, Monsieur Bernar was causing great commotion! He had a personal assistant also named Suna Hanım, who said, “Sir, İnan is here!” “Let him in,” he shouted. I walked in, “This man,” he said, “is going to kill me! Where did you ever find him?” Next to him was Guarnero…staring at him without understanding a word… “Go give him a tour of Otosan!” he said. As it turns out, Guarnero had been insisting on building the spare parts containers out of sheet metal and Bernar Bey was adamant about using wood… That is how Otosan was using the crates delivered from Otosan. Sheet metal had a budget of 10 million lira… It was a huge amount for Monsieur Bernar… In the end, I was alone with Guarnero. He said, “Let us not go to Otosan. Why don’t you take me out to a nice fish restaurant? I will explain it to you.” He then enlightened me on the difference between wooden and sheet metal crates, emphasizing that damage to different parts was greater in wooden containers, as the materials get crushed or distorted, which was not the case, in metal containers. Hence, the containers would pay back the investment in nine months. On top of that, they could be reused. Together, we visited Monsieur Bernar again and made his case. Monsieur Bernar read the reports over and over again and said, “We learned something new today.” He conceded…

“We all learned something new during Guarnero’s term,” writes İnan Kıraç. He recalls, for example, how Guarnero would impose offering lunch at a perfectly set-up table with white tablecloths to the personnel working on the assembly line. For, Guarnero believed that these were special people doing delicate manual labor. He was convinced that if they were given special care and attention, they would show the same care and attention to their work. After the establishment of the company, one of the most important tasks of the supplier team was to get organized for finding the right

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property for the factory. Meanwhile, the first teams of the factory were being created. The most important individual at this point was Enrico Martinotti. An unforgettable name among Tofaş employees, the first factory director had played a critical role in laying the foundation in a fast and rapid manner and was an outstanding manager who could operate speedily even under the most difficult of conditions. Unlike Guarnero, he was quite stern. Hired in October of 1970 as an assistant to Martinotti and undertook various responsibilities in the erection of stamping shop, body assembly and welding line, paint shop, automobile assembly line, the machining shop where the small engine parts are produced, as well as the assembly line of the engine, Kaynak Küçükpınar vividly recalls Martinotti’s stern demeanor: Mr. Martinotti was responsible for everything that went on at the factory. One of the two legendary names in the founding of Tofaş was Bernar Nahum; he was my first mentor. It was winter in the early days; there were no heaters or radiators—we would walk around in coats and sweaters at the shops, but were freezing at the offices. I asked for an electrical heater, so I wouldn’t get sick. “You need to bring a written instruction from Martinotti,” they said. I wrote him a letter and said, “I cannot work in this cold; I will surely get sick. Can you please approve of an electrical heater?” His answer: “il freddo fa ringiovanire!.. The cold rejuvenates you!..”

A straight-A student at Torino Polytechnic, Martinotti had a bright future as an engineer at Fiat. Sabahat Gözne, who worked as an employee for the first few years of Tofaş, and, the wife of Yılmaz Gözne, who began working in Bursa as employee number “001” in the final months of 1968, clearly remembers Martinotti’s colorful personality: “If the shift started at 8:00, he would be irate with those that punched their card at 8:01. He loved skiing so much that after supervising the factory, he would go straight to Uludağ with the skis on his back.” Martinotti was sent to Turkey to help with finding the right piece of land. When it was time to find the right location for the property of the factory, other demands began to emerge. Minister Industry, Mehmet Turgut was the deputy of Bursa; he was hoping for the factory to be established there and attached great importance to that fact. The Italians and Koç executives were concentrating more on the Orhangazi region. After visiting properties in Istanbul, İzmit, Adapazarı, Arifiye, Orhangazi, and Bursa, Bursa was chosen. As a member of the team in charge of selecting the location Turhan Onur points at interesting details in how Bursa came to fore among other locations. In his book, Sanayide Bir Mühendisin 60 Yılı, he writes, The infrastructure for the Bursa Organized Industrial Zone was being laid. There were no developments to the north of Nilüfer Creek, which

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Located 10 km from Bursa, the property of Tofaş was a 1000-hectare land that belonged to the villagers of Demirtaş. The property was combined into a single unit after purchasing the 437 individually owned plots.

ran under the Bursa-Istanbul road; a significant part of the area reaching Demirtaş was barren pasture. There were no peach orchards in this property. It was also very easy to recruit blue- and white-collar workers from Bursa. The soil was solid and the water table was not too high.

Thus, began the work to purchase from Demirtaş villagers the 1000-decare land located 10 km from Bursa. The task was arduous, as many of the plots had not been transferred from deceased owners to their inheritors nor were registered in the land registry, and the majority was tied up in court. The acquisition of these plots and their collective combination was handled by a strong time that consisted of then-Bursa Chamber of Commerce and Industry President Abdi Biçenge, General Secretary Ergun Kağıtçıbaşı, Reis İbrahim Örgün of Demirtaş Municipality, Hulki Alisbah of Koç Holding, İbrahim Bükülmez, and lawyer Emin Üreten of Bursa. Erdoğan Karakoyunlu, who followed up on the process, recalls: Abdi Biçen was the Chair of the Bursa Chamber of Commerce and Industry. He was a highly popular, well-known and highly trusted local…. He played a significant part in convincing his fellow townsmen. He toiled endlessly to ensure that a factory of this size would be built in his town. A total of 437 properties were purchased; I remember quite well, 437… Some were 250 square meters in size, others were 400 or 1200… After they were purchased plot by plot, a lawyer named Emin Üreten, who was also the legal advisor to the Bursa Chamber of Commerce, took care of the legal side of the enterprise. He was a young, competent lawyer. He skillfully worked on managing the properties. Imagine, 437 farmers you have to speak to individually. Later, they were all incorporated and made into a single title deed.

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The 1970s: “a car for everyone”


“A car is a need. I regard it as a shoe. I am not talking about luxury cars. It is a vehicle that you set your foot into to take you comfortably and in time to work and to other places.” Vehbi Koç Mehmet Ali Birand, excerpt from an interview with Vehbi Koç, Vehbi Koç Belgeseli, Birand Yapım, undated.


The indoor

construction area of the factory that would manufacture thousands of cars and make the dream of buying a car a reality was to be 73,465 square meters. A simple groundbreaking ceremony took place on April 13, 1969 with the participation of the governor of Bursa and shareholder representatives. The project had been designed by Fiat in Italy. All the technical details and the technical licenses required by the know-how of an automobile factory to be established in accordance with the licensing agreement were ready. Giulio Bertone was the site manager in which

The groundbreaking ceremony of the Tofaş Factory on April 13, 1969. Rahmi M. Koç walks in front.

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Italian engineers worked as well. He had assumed supervision of the construction of the building and its facilities. Construction was tendered for a contract. The six or seven companies entering the tender were deliberated and finally it was contracted to Tekfen İnşaat ve Tesisat A.Ş. and Intes Kollektif Şirketi. This was Tekfen’s first large-scale construction project as well; Tekfen undertook all infrastructures including the levelling of the land, construction of roads, and foundations. Intes built the steel constructions. Electrical installation was undertaken by Simko Ticaret ve Sanayi A.Ş., elevators by Burkhard Gantenbein, steel construction assembly by Muzaffer Coşkuntürk, boilerplates by Sungurlar, and the air-conditioning system by Selnikel. The only flaw in this unproblematic process conducted by meticulously selected names occurred when the companies responsible for heating, plumbing, and fire safety equipment

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Opposite page, top: View from the groundbreaking ceremony. Rahmi M. Koç shovels dirt. On the right side of the photograph, the third person on the right is Vehbi Koç. Other photographs portray the early stages of the factory construction. The entire construction was completed in 22 months.

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did not keep their promises. Tofaş itself was forced to complete the job, but that did not affect the flow of things. Another mishap in the course of construction was the earthquake that shook Gediz and environs on March 28, 1970 with a magnitude of 7.2 on the Richter scale. The auxiliary buildings of the complex collapsed during the earthquake. It took three months to collect the debris and resume construction. In the end, the entire project was completed in as little as 22 months. Let us quickly review the early setup of the factory, which can only be described as a “spaceport” by outsiders with its robots, machinery and computers of state-of-the-art technology, and R&D labs. The factory comprised of a stamping shop, in which 40 tons of sheet metal were processed, as well as, the main building that included the mechanical, bodywork, paint, and assembly shops. Annexes that housed the thermal power plant, garage, fire station, fuel and demineralized water systems, as well as dressing rooms for workers, showers, kitchen, and cafeteria, were all part of the same complex. GET TING RE ADY FOR PRODUC TION

During construction, the purchase and delivery of machines necessary for production was well underway. A purchasing committee was set up for this important operation. The committee included Otokoç vice directors Aslan Köksal, Turhan Onur, and an Italian official. Bernar Nahum, who was accountable to the Board of Directors, approved purchasing decisions.

Opposite page: Roof and steel constructions of the factory.

The committee continued to work for nearly two years. All the necessary equipment, molds, pressing machines, and maintenance spare parts were purchased following intensive work conducted in Istanbul, Bursa, and Italy. Highly favorable decisions were made during this period. Machinery and equipment orders were placed and the goods were delivered to Turkey in time. In order to transform them into capital, appraisals were made by the Ministry of Industry, State Planning Organization, and University lecturers. The appraisals were approved by the administration with minimal differences and were registered by the Ministry of Finance. This particular aspect greatly contributed towards the completion of the factory on time.

Erdoğan Karakoyunlu recalls, “Aslan Köksal, who eventually became the director of the factory was a very efficient, honest, objective, calm, and versatile man… Turhan Onur, VP of MKEK, was quite the gentleman—he was honest, diligent, and one of the most dignified and honest people I had ever seen…” The choices made by these men allowed a factory of this size to operate seamlessly, in the most efficient manner.

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These gentlemen made the selection of all the machinery. The Italians would tell us which machines to buy for which line, where they were manufactured –Germany, Sweden, Italy- and where they could be purchased. But which one? Of course, there were pricing, quality, delivery conditions to think about… Some delivered fast, others over a longer period of time… Considering all these options and making final decisions was the task of this committee of three. Working systematically in perfect harmony, all the machines were purchased and paid for. They began to function like clockwork.

Images of the advanced stages and completed state of the factory construction.

Let us recall that Tofaş had set out to manufacture 20 thousand cars; from executives to workers, from administrative personnel to engineers and technicians, a team was put together to contribute towards production and to learn, collectively how an automobile could be manufactured… Bernar Nahum relates that Italians were convinced –after heated deliberations- which parts of the “local contents” of the car would be manufactured in Turkey and which others would be purchased. Fiat had demanded the mechanical parts to be produced locally and the body sheet to be imported. Yet, the Koç Group thought the exact opposite. In other

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words, the body would be manufactured here, and the mechanical parts would be “produced locally step by step over time.” This offer required a greater investment. They believed that this would be “more visible and have a positive impact on the highly sensitive public opinion.” So, how did this “content” come about? Turhan Onur explains in detail in his book:1 A decision was made to manufacture the body sheets in Turkey, to manufacture and assemble the body, spray paint the small parts, and dipcoat other, larger parts with a primer, and to paint the base coat and the clear coat with paint droplets charged with 33 kV electricity. The seats were to be manufactured at the factory; the gears would be provided from Turkey and abroad, the electrical systems would be manufactured at the factory, the gasoline engine would be imported, the brake system would be delivered as knocked down, and a test driving area had to be built for the assembly and other tests. The engine parts and the pressing molds, compression moldings, ball and roller bearings, ignition plugs, and electrical ignition equipment were to be imported. Experienced mechanical engineer Aslan Köksal of the Car Maintenance Department of the Directorate of Motorways was recruited for the purchase and import of machinery and equipment. Köksal traveled to Turin on behalf of Tofaş and was allocated a room in Miafiori. He carefully studied all stages and lines of automobile production. We reviewed all the technical regulations of assembly lines, equipment, and technical systems prepared by Fiat teams and made the final decisions with Fiat specialists.

During the time of the factory construction, acquisition of machines, assembly, the establishment and operation of the facilities Turhan Onur met with Bernar Nahum and Guarnero every Friday at 10 AM in Bursa and completed their reviews. In the evening Onur would return to Ankara and the others would head back to Istanbul. WORKING WITH ITALIANS

During this period, approximately 45 Italian specialists lived in Bursa to offer training on assembly and operation with machines. Each Italian was accompanied by a Turkish technician in training who were immediately immersed in the job. The most effective people in transmitting the knowhow to workers that would actually manufacture the vehicles would be these technicians. Once they were done, the Italians gradually returned to their country. Among the most influential and brilliant names of the Tofaş team were Technical Director Savaş Arıkan, Production Manager Osman Mete Altan, and Purchasing Manager Kaynak Küçükpınar.

1

Turhan Onur, Sanayide Bir Mühendisin 60 Yılı, Istanbul 2012, 156.

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During the hiring process, the recruits were preferred to speak Italian or French, as communication was a very important problem. Italians did not speak English and Turks didn’t speak Italian… Turkish courses were thus designed for them in the 1970s as well. Having gone to an interview for the sole reason of being fluent in Italian, could Nedim Karakaş have known, as he began working at Tofaş in 1970, that he would be one of the figures to lend the company, the “Tofaşlılık” spirit?

The chart lists the first Italian executives and technical personnel in the early years of Tofaş. Giuseppe Guarnero was the first general manager of Tofaş and Enrico Martinotti was the factory director.

We had neighbors in Istanbul that worked as subcontractors for Tofaş. The factory was under construction at the time. As I was a graduate of the Italian High School, they asked, “There is an engineer named Bertone overseeing the construction of the factory in Bursa. Do you think you can help him out as a translator?” I said OK. When I got there, the factory only had a main building, the administrative building in the front and the annexes in the back were still under construction.

One of the tens of individuals working with the Italians, İbrahim Bayram was a machine technician hired on April 13, 1970:

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Top and bottom: Italian executives of Tofaş arrive in Istanbul on a private jet. Top, far left: Can Kıraç with Giuseppe Guarnero in the middle. Bottom, second from the right is İnan Kıraç.

The machines were on their way; it was probably September… There was an Italian named Bertone, who later moved on to the facilities; he took me aside one day and said, “We will get these down together”… Fine, I said. I looked to see the trucks on their way, with a number of equipment; the large fans of the painting shop, air-conditioning devices, oversized systems… I thought someone would come to the rescue and take them down… I noticed the porters in the last truck… They set up a large, tripod crane. We got to working; the truck would enter, the truck bed would be lifted, set down, the truck would move forward, and we would lift it up again… By the time we got to the last truck, it was dark and there was no power in the neighborhood. Bertone fetched his car, turned on the headlights, and we were able to unload the last truck.

If there was work to be done, what we would describe as a “job definition” today, would be secondary in such a setting. Yılmaz Gözne… the employee registered as number 001. He began working at the Tofaş office in Istanbul in 1968 because he could speak Italian. Gözne became the director of purchasing; he knew almost all the part numbers by heart. His wife Sabahat Hanım would later recall, “at night he would sleep talk

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components numbers.” Since Yılmaz Bey was fluent in Italian, he would accompany Martinotti with his wife on the weekends and they would teach each other words in their own languages. Meanwhile, the “lost in translation” episodes were piling up among the unforgettable memories of the early days. İbrahim Bayram vividly recalls one such incident: When I began to supervise bodywork method section, there was an Italian in charge of the process. At the time, we were trying to learn Italian. Every day at noon, the Italian would ask me, “Ibrahim, are there any problems?” At times, he would ask Rasim as well. If there were any problems, we would tell him, so he could take down notes and pass them on to the administration. On one such occasion, he asked the same question. “There is no problem, but the new horn is due to arrive and we’re waiting for that; we changed the image on the operation cards, but the horns have not yet arrived,” I wanted to say, but did not know how to say horn in Italian. So, I said to myself, this word must have a Latin root and the Italian would be something like “kornoto.” I turned to him and said, “there is no kornoto (cornuto); it hasn’t arrived.” As I repeatedly said “kornoto,” his face began to change; the assembly lines were running in front of our offices, so he took me there and told me to show him the part. I did. He turned to me and said, “non e’ kornoto… Avvisatore!..” Apparently, that’s what it was called. He went into the meeting with a cross face and I flipped through a dictionary to see what cornuto was. As it turned out, it meant “cuckold”!.. TOFAŞ GROWS CROWDED

With the ongoing construction on one hand and the delivery of the machinery on the other, the number of employees at Tofaş was on the rise and quite rapidly, as production was soon to begin and the number of trained workers had to multiply at once. Two kinds of employees were hired at the factory: engineers/administrators and workers… It was conceived from the onset that about a thousand people would be hired. It thus became evident that a HR director would be greatly needed. An ad was put in the paper, the applications were evaluated, and three, in Erdoğan Karakoyunlu’s words, “were deemed worthy of review.” Karakoyunlu submitted the three names to Bernar Nahum and conveyed his first impressions and his preference. Monsieur Nahum wanted to interview the top candidate personally; after all, a great responsibility was to be given to the prospective director. Nahum met with Yalçın İpbüken. He gave him such an inspiring speech that day that what he said would constitute the ground laws of what would be İpbüken’s long career at Tofaş. When he began working as assistant HR director, he had no idea that he would dedicate his life to Tofaş, that he would contribute endlessly both to the institution and to Bursa, and that he would become the “Yalçın Ağabey” of Tofaş.

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Early years and first teams of Tofaş… Standing in the photograph on top is Erdoğan Karakoyunlu with Bernar Nahum next to him. Middle photograph: On the far left is Gökçe Bayındır with Can Kıraç second from the left and İnan Kıraç on the far right. Bottom, from left of right are Yalçın İpbüken, Savaş Arıkan, Yavuz Demir, and Arslan Köksal in Arslan Köksal’s room at Tofaş.

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I had applied for a job at Koç Holding. I was particularly hoping to meet with Filiz Ofluğlu, who had been hired by Vehbi Koç as a consultant on organizational affairs. She would guide the applicants to the right departments. People told me not to bother, that I couldn’t get an appointment. She agreed to see me nonetheless. She told me about Tofaş. “We are establishing a company with the Italians, I would like to steer you in that direction,” she said. After several trips to Ankara, they called me to Bursa. I met with Enrico Martinotti and Aslan Köksal there. I lacked the qualifications they sought; I did not speak Italian or French; English was my only foreign language, and I had no factory experience. In fact, I had never been inside one. Finally, they invited me to Koç Holding. Erdoğan Karakoyunlu had met with me from the onset; he was in charge of coordination. Finally, Bernar Nahum called me in. “Erdoğan Bey, my dear, he is only a kid”, he said after taking one look at me. I was 30 at the time. He gave it some thought. “Fine,” he said. “We are setting up a factory; the factory is a child and so is this gentleman. If he works hard, he will learn; they will learn and grow together.” Then he gave me an interview I shall never forget an assigned me a very important mission.”

Tofaş classifieds published in Cumhuriyet newspaper; job openings range from bench workers to engineers. Some applications are to be made straight to the factory, others to the Istanbul office in Şişli. The dates of the ads on the left, top right, and bottom are November 4, 1970, February 22, 1969, and June 24, 1970, respectively.

Yalçın İpbüken’s open-mindedness without any prejudgments, his references, and potential growth with a newly established industry had outweighed his lack of experience. İpbüken’s mission, was without doubt, the healthy and strong growth of Tofaş… To tackle challenges

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without damage or mishaps… Bernar Bey had told him, Vehbi Bey puts great emphasis on productivity!” He was, in other words, expected to be diligent and productive. He needed to deliver the goods. Viewed from today’s perspective, we know well our expectations from a new job and what that new job demands… Yet, back in those days, the circumstances could not afford such scrutiny, as the number of qualified personnel was scarce. On the other hand, hundreds more were to be recruited for production. While, ads seeking qualified personnel were published in newspapers, contemporarily, applications of those who were deemed capable were evaluated after interviews. Consecutive ads in newspapers outlined job descriptions. TOFAŞ Türk Otomobil Fabrikası A.Ş. Construction draftsmen sought Construction draftsmen will be hired to work at our factory in Bursa. Qualifications needed: • Experience in equipment and press mold, • Background in the automotive industry, • Sufficient grasp of a foreign language. Please apply to: Tofaş Türk Otomobil Fabrikası A.Ş. Yalova-Bursa Road, 10th Kilometer P.O. Box 267 Bursa. Phone: 6347 Demirtaş Bursa (Cumhuriyet, June 24, 1970)

The exact address of the factory was an important issue as well. There was the Istanbul-Bursa motor road surrounded only by land and nothing else… Erdoğan Karakoyunlu offered a simple solution: “This is the 10th kilometer of the Bursa-Istanbul Road. That should be the address…” It was used for quite some time to locate the Tofaş factory. As construction at the factory was still underway, a communications office had been set up on İdris-i El Surusi Caddesi in Çekirge. The applications were reviewed there. Hired as the employee numbered 74 in 1970, Bahri Ekbiç began working at the Personnel Department’s salary organization desk; the personnel department was the equivalent of today’s Human Resources: The personnel were being hired. We had all just begun working there; there were no application forms and they had to be prepared. Applications were submitted to an office in Çekirge. I applied there as well. Construction was about to be completed but there were still additions; the press molds had just been brought in… There was a telephone magneto at the factory; accounting, purchasing, HR, everyone was using the same telephone; applicants were calling in, purchasing wanted to talk with manufacturers; you would tell the operator it’s express” to be connected faster, but you still had to wait two hours. First, you were connected to the Demirtaş district, then to the central post office. The factory director had a telephone, but no one was allowed to

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use it. As there was no cafeteria, he would take the bus to Bursa for lunch with his coworkers and bring everyone back. During these early days, we were eager to hire the best possible personnel for Tofaş. We had started on square one, but we were constantly striving to improve. We learned everything here, on the job; from performance evaluation to salary structuring and equal pay for equal work.

Here you have an automobile made up of thousands of parts and your teams will complete its production. The city in which you set up your factory does not, despite everything, have the capacity to feed your factory in terms of human resources. What do you do in this situation? As, there were not enough vocational schools in Bursa, graduates were solicited from other cities. In the early years, the number of engineers at the factory amounted to nearly 20. However, the ones to combine the know-how of Italians with the Turkish workers were not engineers but graduates of technical schools. From the assembly of the machinery to the translation of technical details, from deciphering the regulations to learning the fineries of the parts, they undertook a very important task and attended to almost everything.

In fact, the scarcity of trained personnel forced Tofaş to function as an institution that offered the kind of training that would rival vocational training institutes in Turkey in the 1970s. Through the courses organized within the factory, primary school graduate workers were given the required academic formation; their shortcomings were overcome through basic courses such as technical classes, mathematics, and measuring skills. Many workers who benefited from this training were able to ascend the ladder at the factory in the ensuing years. Therefore, calling Tofaş a “school” carries a much different meaning than it does for many other institutions. Whether you were a simple worker or applied for a position as a technician, it was impossible not to realize that such an intuition

Above: the ad published on March 1, 1070 in Cumhuriyet newspapers concerns the issuance of Tofaş bonds. Below: brochure listing the advantages bond owners will have when buying a car.

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Top left: Production receipt of Murat 124 with chassis number 0000001. Above right: Production and assembly approval certificate the Chamber of Mechanical Engineers of Turkey granted for production. Below: Consignment receipt of the first Murat 124.

was being created for the first time and that you were standing on the threshold of a groundbreaking industrial investment. Yalçın İpbüken believes that this awareness existed at Tofaş from the onset. He believes that the human resources methods used then were far more advanced than some of their current counterparts: I am, in fact, assertive about this point. Those who see the Tofaş Cooperative can understand why we feel this way. No place in Turkey had an institution of this kind in the 1970s. Today, we are proud of this Cooperative. From A to Z, from basic personal and family needs to domestic appliances, everything could be provided from there.

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Rahmi M. Koç and Umberto Agnelli on the opening day of Tofaş.

We pushed our working methods to a humane level, perhaps by happenstance… And we began doing that right away, as of the early 1970s. No one had cars at the time. Every weekend in summers, we would take several busses full of people, along with the cooks, and go to the sea or go picnicking on the mountains. The way we regarded people was different. We made great efforts to change the social fabric within the factory.

One of the first undertakings prior to production, was issuing Tofaş bonds. During the extraordinary general board meeting held in November 1969, the decision was made for Tofaş Türk Otomobil Fabrikası A.Ş, to issue bonds and it was announced in the newspaper ads of March 1, 1970 that bonds worth of 20 million Lira would be sold on March 5, 1970. The bonds would be issued in one thousand, five thousand, and twenty-five thousand bills, would be bonds to bearer, and would generate an annual interest of 13%. Moreover, Tofaş bondholders would also have priority in purchasing the Tofaş automobiles manufactured with the Fiat license to be delivered in early 1971. FAC TORY OPENS, PRODUC TION BEGINS

The first Murat 124 assembly was completed in December of 1970 at Tofaş. Taking advantage of the date’s proximity to the New Year, a celebration was held at Çelik Palas Hotel. It was a coming of age for all parties involved. Now was the time to open the gates of the factory. Tofaş was inaugurated with a large ceremony on December 12, 1971. After 22 months of hard work, the factory was ready to be revealed. It was an unforgettable opening

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Guestbook dated February 12, 1971 designed for the inauguration of Tofaş. Below: Umberto Agnelli’s signature and note: “Bravissimo!”


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ceremony in every aspect. The participants included high state officials of Bursa, members of the Koç and Agnelli families, and Fiat and Koç Holding executives. President Cevdet Sunay, Prime Minister Süleyman Demirel, Chief of Staff and General Memduh Tağmaç, Minister of Industry Mehmet Turgut and several other ministers, State Planning Organization Undersecretary Turgut Özal, Muammer Dolmacı, commanders and general directors, the Governor of Bursa and administrators, members of the Bursa Chamber of Industry and Commerce, and a long list of guests… A group of executives from Fiat accompanied Umberto Agnelli. Italian guests arrived from Istanbul aboard the privately rented Dolmabahçe ship. The ceremony began with the speech of the Governor of Bursa, followed by Vehbi Koç on behalf of the Chair of the Tofaş Board of Directors, and Umberto Agnelli as the Chair of Fiat Board of Directors. Next, the Minister of Industry Selahattin Kılıç and Prime Minister Süleyman Demirel delivered speeches. Stressing, “We do not have another hour to miss,” Vehbi Koç referred to Tofaş as a “handiwork” Mr. President, Mr. Prime Minister, Esteemed guests, Over the years, several different attempts have been made in Turkey to establish and expand the automobile industry. Among these attempts, the Tofaş Automobile Factory, which will be inaugurated today, will constitute a step forward for the Turkish automotive industry. On behalf of Tofaş Board of Directors and myself, I would like to express my gratitude and appreciation to our President and Prime Minister, the ministers and high officials, our commanders, and our esteemed guests for their presence and support. After the end of World War II, almost all the developing countries run by various different regimes witnessed the rapid growth of the automobile industry. Only 90 million a decade ago, today the car pool has reached 180 million. Hence, automobile production companies have greatly expanded and largely contributed to the economic growth of the countries in which they are established. One of these giants is the Fiat Company, which has invested in our country as our partner. Among other partners of Tofaş are Makine ve Kimya Endüstrisi Kurumu, İş Bankası and Koç Holding. With these partners, Tofaş constitutes an example that befits the mixed economy principle envisaged in our development plans.

Itinerary designed for guests.

The foundation of the factory was laid on April 13, 1969 and construction was completed in 22 months with a budget of 400 million TL, spent on all the facilities of the Türk Otomobil Fabrikası.132 million of this amount was met by the Turkish partners; in addition, 127 million Lira of external and 48 million Lira of internal financing has been provided.

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Vehbi Koç delivers a speech at the inauguration of Tofaş.

The factory’s current production capacity is 20 thousand automobiles per year. However, it is foreseen that this capacity can be doubled with a small additional investment. Our objective is to please our buyers with the quality of our vehicles and service. During the three-year operation period of Tofaş, foreign exchange savings of 67% will be made per automobile. This alone indicates that Tofaş will spend only 435 US Dollars per car on imported goods. The foreign exchange savings will rise to 85% per car, in the subsequent three-year period.

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There have been years, in which the number of automobiles entering our country in various ways have exceeded 15,000. The average unit worth of these cars is 2,000 – 2,500 USD. Today, we are able to produce at least five locally manufactured cars with the same amount and we can say that, as of 1975, we will be able to manufacture – in our current and future facilities – more than 50 thousand cars with half of this foreign currency spent by Turkey through direct or indirect means. In addition to the foreign currency savings, new lines of business will be launched, additional labor force will be required in the main factories and the suppliers, and, with the growth of the business volume, industrial, commercial and service sectors will become more profitable, and opportunities will be created to pay more taxes to the state. Indeed, in the first year of its establishment, Tofaş’s total orders to suppliers have reached 125 million Lira. Next year, this will amount to 350 million Lira. On the other hand, we believe that the level of prosperity an automobile brings to a person and to family life is just as important, as the strength, this industry lends to the economy of the country. A small automobile is not a luxury item, but a requisite for the general population. However, in order to meet this need, the cost and sale price of automobiles must be kept at a sensible level. The taxes levied by the most recent Financing Law have raised the cost of the cars to be manufactured by 25 to 30 percent. Therefore, the retail price of the Murat car will be 57,000 Lira, but will cost 62,000 Lira to buyers when Vehicle Purchase Tax is factored in. A portion of the industry already established or being established, in our country generates foreign currency savings, whereas the other portion increases our imports. Working at full capacity for the industry that contributes towards the economy is critical in terms of lowering costs. We are a developing country. However, we are still behind compared to most of our neighbors. We have entered the Common Market. In order to overcome the gap between ourselves and other member countries and to have a stronghold against competing industries, we have to strengthen our industry and economy. The main objective is to establish a productive industry that will create new job opportunities, generate foreign currency and savings. We do not have another hour to lose. In order for the public and the private sectors to maximize gain from investments that reach billions of Liras, three important factors must be considered and managed in harmony with each other. • The labor of workers must be compensated for. • Companies should be fully operational and generate profits, in order to make new investments. • The state should be able to collect sufficient and balanced taxes, in order to provide the necessary public services.

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For two years, we’ve lost much work force for various reasons. In order to make progress, our country needs optimum profitability and savings. Therefore, working in harmony in every line of business is one of the critical issues of this country. The entrepreneurs and executives of the Türk Otomobil Fabrikası, the opening of which you honored today, diligently work with this mindset. Those who helped bring this factory to life here have also contributed greatly towards the beautiful city of Bursa and its residents. Soon, Bursa and its environs will become the center of the Turkish automobile industry with its main and supplier establishment and this region will develop very rapidly. I consider it a most pleasurable duty to extend my thanks and appreciation to our government, for helping to prepare the basis of this handiwork, to the relevant state departments for their support in the completion of this project, to Fiat executives for bringing this advanced technology to our country, to all the specialists that worked tirelessly for the completion of the facilities, to all the engineers, technicians, and engineers, to all our partners that have believed in this endeavor and contributed to the capital of the company, and to all local and foreign institutions that have provided loans. It is my most sincere wish that Tofaş Türk Otomobil Fabrikası be highly beneficial for our country and that everyone working at these modern facilities thrives and succeeds. I would like to thank our valued guests and pay my respects. Chair of the Tofaş Board of Directors.

The highlights of Umberto Agnelli’s speech were on cooperation and on suppliers that would rapidly multiply, and on the growth of localization of production. Mr. President, Mr. Prime Minister, Esteemed Ministers, Dear Guests, It is a great pleasure and honor for me and my colleagues to be present at such a ceremony, honored by Mr. President and the highest officials of the military and the state. The inauguration of the company is a giant step forward for the Turkish automobile industry; as Fiat, we take pride in being part of this achievement. The automotive industry is a driving power in the economy. Various other businesses grow increasingly rapidly around it, for supporting industries such as the road network, repair and maintenance shops, and gas stations are indications of the prosperity of a free country. The automobile is perhaps the most effective means in bringing people

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closer, getting them acquainted, and establishing both economic and social ties between free individuals. Our experiences show that the automotive industry encourages wider consumption, broader investments, and larger imports. On the other hand, the growth of employment in the automotive industry leads to double figures of employment in the industry. In Italy alone, 2,300,000 people work directly or indirectly in the automotive industry. This labor force represents one sixth of the total work force employed in the industry or industry-related fields. A large segment of these workers are highly skilled; 15 out of each 100 are employees, whereas 28 are qualified or specialized workers. The automotive industry also has a significant impact on the field of research, as it encourages technological research far more advanced than all other sectors. The establishment of the automotive industry with the will and support of the government has been possible only through certain conditions. First of all, with the increase of the local market potential, the country shall reach a much higher level of motorization. Perhaps more importantly, the people’s determination to work and progress and the nation’s commitment to an industrial growth and development program have played a critical role in this endeavor. The Tofaş company was designed and established in this setting, with the combined forces of both Turkish and foreign official sectors. This project has been prepared to maximize the use of locally produced parts in car manufacture. Therefore, from the onset, it requires the support and help of the Turkish supplier industries. Even in their early stages, we do hope that the supplier industries will go to great lengths to meet the needs of the Tofaş Factory. Having contributed to the establishment of this factory, Fiat not only lent its technical know-how, but has also accepted a program that would lead to almost entirely local production in the foreseeable future. This demonstrates the importance the Fiat company places on international collaboration. We believe that this constantly developing international collaboration has become an integral part of modern economy, that it is an effective tool in bringing nations together and a productive way of living together in peace and harmony. Fiat has blazed the trail of this mindset in a number of countries. Our collaboration with Turkey should be considered the groundwork for accession into the Community economy system that six countries of the European Economic Community, including Italy, have been diligently working to establish. I believe that the factory we are opening today will face one major challenge and that is the challenge for growth and expansion. We will spare no support or service in this regard.

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Umberto Agnelli delivers a speech at the inauguration of Tofaş.

The official inauguration of Tofaş in Bursa coincides with the release of the first Murat car to be manufactured here. Murat is the equivalent of the Italian Fiat 124, which his highly popular and widely recognized across the globe. Both in terms of technical specifications and production, the car has an advanced technology; I sincerely hope that this vehicle will help develop a better way of living in your country. After all, mobility is a most valuable requisite of today’s civilization. On behalf of all the Fiat team members that have worked with you, I would like to thank all of you for your dedicated collaboration and wish you the best of success.

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The ceremony continued with the President cutting the ribbon. The first car off the assembly line was offered as a gift to Abdi Biçen, President of Bursa Chamber of Commerce and Industry, for his contributions to the industrialization of Bursa and the extraordinary efforts he made during the establishment of the factory. Although made ready in time for the inauguration and its name already assumed, mass production of Murat 124 had not yet commenced. However, Istanbul and Bursa offices were united in their efforts and everyone was tending to business as if they were working under a single office. The Istanbul team was spending half of the week in Bursa. Work continued until midnight for months until the production of the first vehicle; a number of cars had been manufactured by the opening. Mass production began shortly thereafter. Nedim Karakaş, who remembers the production of the first car fondly recalls, “Sometimes even I tightened a screw or two as the engineers worked to the bone.” Karakaş was deputy production manager as the factory was operating around the clock prior to the inauguration:

Arslan Köksal offers President Celal Bayar, Prime Minister Süleyman Demirel, and guests a tour of the factory on the day of the opening.

Kaynak Küçükpınar was the assistant director of the factory at the time. He walked into the room one day, looking rather pensive. I was curious, so I asked him what was wrong. “They handed me the organization of the factory’s opening. I don’t know what to do,” he said. “I will help you,” I assured him and we got right down to work. We were tossing some ideas on what to do… imagining laying down carpets, placing the guests. But, where to find the carpets? We consulted Bernar Bey: “go ask for some from the Otosan Bursa dealer Evkuran,” he said. Fine, we said. Evkuran, as the name implies, led us to assume it was a home furnishing store…. Behri Ekbiç and I visited Hilmi Evkuran’s office, told him what we had in mind: “we need carpets for the opening”.

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“How many?” he asked, so after a rough count of the officials, we gave him the approximate measurements of the space. “I’ll see what I can do.” He said. Just as we were leaving, “please make sure they’re all the same color!” we blurted. Hilmi Bey turned abruptly and said, “What color? I’ll just pick up what I can find from the neighbors!”

Kaynak Küçükpınar vividly remembers the carpets brought to the factory’s gate on the day of the opening. “Honestly, it seems very difficult to find so many carpets, but Bernar Bey’s wish is my command,” said Hilmi Evkuran. The next day, a truck full of carpets was delivered to the factory. We had vacated the hall of the maintenance shop and created a foyer there. We received the carpets and laid them down. They were all of different kinds: Bünyan, Isparta, Ladik, Kayseri, in a plethora of colors and motifs… They were all spread across the floor and made you want to run! Bernar Bey walked in and saw our predicament: “This can’t work, remove them all at once!..” he said. We picked up all the carpets, loaded them back on the truck and sent them back. At the time, there was a new investment being put into operation in Bursa. The Halıfleks factory had just been opened. The company’s boss was our neighbor from the apartment block and Mehmet Koçak was one of the partners. “Please Mehmet Bey, you need to produce this many square meters of Halıflkes in two days!” we told him. Of course, it was possible to use it on the day of the opening and then distribute them to the offices; no need to rent. We had the carpets made, bought them, and had a lovely red-carpet ceremony.

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Everything is so different today! Imagine, the production manager and deputy factory director looking for carpets everywhere for the opening ceremony… “It’s not my job” was not an option; our only option was to do the best we can. We were learning on the job, accumulating experience, to make progress. This is how automobile production was embarked upon; no one was rolling out the red carpet under our feet! Today, many things still remain as a problem to be concerned with regardless of one’s position. Making most of the situation and taking it upon oneself continues without falter, at Tofaş today. Nedim Karakaş’s exciting stories in the backdrop of the inauguration day that may have seemed like a simple ribbon-cutting ceremony were not limited to this. Everything had been well thought of. What could possibly go wrong? Guests were admitted from the front door of the factory still used today. The “VIP” guests were met in the area currently used for vehicle delivery. We were constantly in touch with our colleagues and kept running around. Suddenly, I received word that Rahmi Bey and Mr. Agnelli had arrived. I rushed over to greet them. However, I witnessed the following scene on the road in front of the factory: The police had cut off the road and was not letting Rahmi Bey and Mr. Agnelli in. I immediately ran over there and told him, “Sir, these are the partners of the factory: Rahmi Koç and Mr. Agnelli… — That’s not my prerogative. Police Commissioner Mustafa gave me strict orders not to let anyone in from here! Meanwhile, Rahmi Bey got out of the car and approached us: — This gentleman is our Italian partner, he said. But the answer he received was the same. — That’s not my prerogative; Police Commissioner Mustafa gave me strict orders... Right then, Rahmi Bey did something I could never forget: he turned around and without flinching, he approached Mr. Agnelli and said: — As it turns out, we have to walk from this point on!

This unexpected mishap could have become rather problematic, but was easily resolved thanks to Rahmi M. Koç’s quick thinking. A day before the ceremony, another incident that bewildered the inexperienced organization team occurred: this time, it was the speaker’s stand. Nedim Bey remembers well the story of the stand Kaynak Küçükpınar had sketched: As we had little knowledge of what the stand should look like, we had an oversized one designed; after all, journalists would set up microphones there. Bernar Bey walked in and asked to see the stand. It was set up at the pressing shop, so we all went over there to see it. All hell broke loose when we walked in! — What is this? Have you never seen one, don’t you know what it’s supposed to look like?…

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We couldn’t understand what was wrong. Can Kıraç came over that instant: — Boys, don’t be upset and don’t say a word, he said. As it happens, these types of stands were to be small and narrow with concave sides, so the people delivering their speeches behind them look impressive. We decided to have it cut, but the ceremony was the next day… Gone was our stand! We were at a loss. Berç Usta from the paint shop came to our rescue. “Don’t worry kids, he said” and designed a new one, painted it, dried it in the heater in which the cars were dried, and the stand was out up in time.

That evening, guests were invited to a reception at Çelik Palace Hotel. The organization team included Bahri Ekbiç and Sabahat Gözne, along with Nedim Karakaş… At one point, there was a commotion at the doors of Çelik Palace… Karakaş ran over and realized that the hostess at the door was asking to see Vehbi Koç’s invitation! As it turns out, they were strictly ordered not to let in anyone uninvited. Vehbi Bey embraced the situation just as Rahmi Bey did: “Is this young lady working at our factory?” he mused. At this point of our story, let us rewind from the moment the factory was established, the first car was released and celebrated and hear the story of Tofaş from Rahmi M. Koç, who recounts Vehbi Koç’s unrelenting faith in the need to establish an automobile factory in Turkey and the thrill of the early days: When the late Vehbi Bey became engaged in industry, his true driving force was to manufacture products the public needed at affordable prices. In fact, Arçelik was established with this philosophy in mind. Subsequently, Vehbi Koç took Henry Ford as his model and wanted to give the public an automobile they could use and afford. A truck assembly agreement had been signed with Ford. We wanted to introduce automobiles into the agreement, but Ford declined. We requested a letter of rejection. We took the letter and went our way. Meanwhile, Egemak became a Fiat Tractor dealer. Our Tormak Company in Adana was able to take the Fiat Truck dealership with Fevzi Durak, who was previously a Fiat Tractor agency. Through this opportunity, we were able to strengthen our ties with the high-level executives with the Fiat Agriculture and Fiat Commercial Truck departments. Next, we acquired the Fiat automobile dealership. We became distributors and we entered negotiations in 1965 to co-manufacture cars. Upon hearing this, Ford suddenly decided to manufacture automobiles in Turkey and applied to us. We showed them the previous letter of rejection. They retired the gentleman who signed the letter in six months. Six years after the negotiations that commenced in 1965, we had achieved Vehbi Bey’s objective and fulfilled his desire with the release of the first Murat 124 from the assembly line.

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MUR AT 124

Reminiscing a vintage automobile, do people first list its engine size, number of cylinders, and speed per hour? Or do they begin by describing how it looks? It is usually the second option in most cases. We begin describing it as if we’re remembering an old, beloved friend. “His eyes were blue, he had a lovely smile, and was a little overweight…” is what we might say. Before we explain what he did, we first portray the kind of person he was… Murat 124 was exactly that: fondly remembered and described by its users with nostalgia and a big smile. For, this car was a “first.” Owning this first car was tantamount to having personally lived through a period in Turkish history. Therefore, what mattered most was not the technical details, but how it was purchased, what roads were taken, what adventures were experienced with it. If you listen carefully, you can hear that each Murat 124 owner impatiently waits for others to finish their story, so he can tell his own; used for years, Murat 124 is a life experience, a cabinet of memories.

Currently displayed at the Tofaş Museum of Cars and Anatolian Carriages in Bursa, the first green Murat 124 featuring the original logo of Tofaş on its front grille. Below: The dashboard. Next page: The first Murat 124.

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Various production stages of Tofaş’s first automobile: Murat 124.

The naming of Murat 124 is part of this cabinet of memories, as well. Fiat did not wish its partners outside of Italy to bear the Fiat name; the vehicles manufactured in Spain had taken on the name SEAT (Sociedad Española de Automóviles de Turismo S.A.), for example. Therefore, despite Tofaş’s persistent offers and the commitment to relinquish the brand name Fiat, should the partnership be resolved, Fiat did not break its principles. Thus, began the search for a name for the new automobile. 15-20 names that could be appropriate were selected among the many. The jury, put together to select the name Anadol, became involved this time for the Tofaş car. Comprised of Cevat Fehmi Başkut, Burhan Felek, distinguished Prof. Nazım Terzioğlu, Hulki Alisbah, and Bernar Nahum, the jury, focused on five names. Nilüfer, inspired by the creek running near the factory; Ova, alluding to the plain of Bursa; Koza, proposed in connection with the famed sericulture of Bursa; Uludağ, the mountain, on the skirts which, the city is located, and

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finally, Murat, which recalled the Ottoman sultan Murad-ı Hüdavendigar that once lent Bursa his name… Among these names, the Italians also preferred the name Murat, which reminded them of a general from their national history. Following the decision of the Board, the automobile ( model?) was given the name Murat 124. SALES BEGIN

At this point of the story, it might be a good idea to take a closer look at the economic policies of the 1970s and the growth of the means of production in the automotive sector. The most outstanding factor in this tableau was the car body molds, which were the largest and costliest item of automotive investment. It was time to build sheet metal car bodies, which meant the beginning of an important line of industry in Turkey. Considering that, the size of the market in Turkey was limited to approximately five to six thousand cars per annum, promising to sell 20 thousand meant, quadrupling the sales. We are talking about the cars, Bernar Nahum had said, he would “drive into the sea from Sarayburnu.” Fiat allowed the transfer of the 124 molds to Turkey only under these conditions. Thus would begin the “assembly industry in the automotive sector,” which would be criticized for a very long time. However, mass production required a different technology; in order to establish heavy industry and a supply chain in the future, this step had to be undertaken at first. Once mass production began, it attracted people into the business and some small investments came to be made. It is important to note here that when the first Tofaş teams took charge to assembly the first vehicle of their factory, their partner

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Fiat was already more than 70 years old and the Ford Company was nearing 70. The automotive industry in Turkey overcame the distance of a hundred years, in as little as 50 years. Today, Tofaş’s level of quality equals that of Europe. If that weren’t the case, would it have been possible to sell the majority of the production to Europe? Realization of production in the automotive industry in this mode was consequential with regards to the economic policies in Turkey. Prior to 1970, everything was manufactured by the state and there was no real internal capital to speak of. In the 1970s, the import-substitution policies, implemented in all the newly industrializing countries in the world, was adopted in Turkey, as well. The import of goods manufactured abroad was limited by high customs taxes and their production was provided locally. The idea was to create industrialization through this system. The question was to create a domestic demand. Potential investors were incentivized. Considering that, the optimum scale of automobile production was several hundred thousand a year, starting with 20 thousand capacities, as Tofaş did, was a small-scale investment, directed entirely towards the domestic market. Hence, the price of the first Murat 124 was determined accordingly. The sale price of the automobile was very carefully calculated of course; among the questions raised were, would it sell, for how much it would sell for, where the purchasing power would take us to, and at which point could we begin making profits… While discussions were going on, Turkey experienced a serious devaluation. In August of 1970, 1 dollar shot up from 9 to 15 Lira. As calculations were made to keep the unit price around 30 thousand Lira, the projected amount neared 60 thousand!

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The first advertisements of Murat 124 include long texts listing the features of the automobile and the ways in which it makes life easier.

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At some point, production was almost halted due to concerns that, the cars would not sell. Yet, things progressed as planned. Gökçe Bayındır, who was recruited to Tofaş Oto Ticaret as the marketing director in June of 1971, vividly remembers the first sale price of Murat 124: 56,964 TL… such an odd price… I asked my colleagues how they came up with this number; “Ask Bernar Bey”, they said. “This is the result of a refined calculation; moreover, if you round up the number, you’d seem to be profiting too much,” he said.

Murat 124’s market placement also reflected a very unique period. The well-educated, professional, high-income female driver; a nuclear family that spends savings on family holidays… The story of the kind of development that runs alongside the modernization of society… This was also demonstrated in the advertisements of the Murat 124; the hopes of individuals and families were being concretized with the dream of a car. Tofaş Oto Ticaret A.Ş. was founded in 1971 as a distribution company. İnan Kıraç was the head of the company. He had been recruited from Otoyol. Kıraç believes that sales were just as important then, as they are today. Manufacturing cars in Turkey was easy; the important thing was to sell them. Cars were now being manufactured, but I became the head of the marketing department to set up the organization. We established our own standards: we traveled to Samsun, for example, and thought, who would buy cars here? Doctors could, high-paid civil servants could, lawyers could, etc… You add the numbers up and it amounts to 70-75 people… You look at who is paying taxes and factor in another 8 or 10. What about next year? Who are we going to sell cars to? In all sincerity, at first we were truly miserable, but then we set up a very good organization. You need to get to know the region accurately, find the right people there. Then, you have to keep the organization alive, closely follow the competition. I think the greatest achievement of this organization is twofold: One, we brought the factory to 50 to 60 thousand in a decade. After that, in my last term, production was at 220 thousand per year, can you imagine that?

İnan Kıraç had hired Gökçe Bayındır as deputy general manager; today, he remembers Bayındır with the words, “he had this guy, he would send out to competitors and have him count the number of cars still waiting in the parking lot.” Bayındır’s application and recruitment to Koç Holding was orchestrated by the unforgettable Filiz Ofluoğlu, who had paved the career paths of many executives that held critical positions at Koç Holding. Filiz Ofluoğlu was my teacher at Robert College. When I had first applied to Koç Holding, I had turned them down due to the ambiguity

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of the job definition. Before long, Ofluoğlu called me again and told me I would be put in touch with İnan Kıraç. He and I had an understanding “at first glance.” I became the VP at Tofaş Oto Ticaret. Kayhan Kantarcı had assumed the same position before me. I can say that I always followed in İnan Bey’s wake throughout my career. He had a very motivating approach. We enjoyed a very affable relationship for thirty years—despite the fact that he was an avid Galatasaray fan, and I rooted passionately for Fenerbahçe…

As business at the Tofaş group comprised of Tofaş Sanayi, Otoyol Sanayi, Türk Traktör Fabrikası, Karsan Sanayi and Otokar Sanayi, began to expand in those years, İnan Kıraç was appointed as the deputy director of the group and Bayındır became the general manager of Tofaş Oto Ticaret. AN UNEXPEC TED STRIKE AND ITS AF TERMATH

In the early days of the factory, Human Resources Deputy Director Yalçın İpbüken was faced with a troubling a period during which the responsibility Bernar Nahum had placed on his shoulders would brutally test him. A month into production, a strike broke out at the factory in May. The workload was incredible for everyone... The task we had undertaken was extremely heavy… Everyone was chasing after something else. There was a deadline and everything had to be ready by then… I fell sick, but didn’t tell anyone because there was no time for sharing concerns or complaining. While we were still under construction, we were faced with unionization. A local union was established quiet unexpectedly and registered a portion of our workers at the assembly line. We found out that, later on. At the time, we were coordinating worker-employer relations with Koç Holding. The legal counsels we consulted with were also at Koç Holding, but the news came out of nowhere. Production aside, even construction had not been completed yet. Just as the machines were being installed, we were informed of the situation. So, we were faced with very serious incidents from the onset.

After the first 30-day strike at Tofaş Factory, a Collective Labor Agreement was signed in June of 1973. A month later; however, five thousand workers at Karsan, Burçelik, Mako, Coşkun Öz, SKT and Çemtaş factories along with Metal-İş, Tofaş and Renault factories went on strike. The disagreement between the employers and the union ended in strikes and lockout decisions. The automobile industry in Bursa came to a halt. Accord was reached only in late August and the strike and lockout were lifted. More than five thousand workers employed at the eight business of the automotive industry went back to work on the morning of August 27th.

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DE ALERSHIPS AND GENER ATING CUSTOMERS

The question of dealerships was very important in the professional career of Vehbi Koç. In all the businesses he set up, particularly in the early days, he knew all the dealers personally. He would visit most and listen to their problems firsthand. He had friendly relations with some; he was one of them. Despite how expensive a product was for Vehbi Koç, it had no value in his eyes unless it found its buyer. Rahmi M. Koç is among many that closely followed his father’s approach to dealerships. Vehbi Koç always believed that providing after-sales service was just as, if not more important than, sales. He always said that a good service system would largely guarantee sales in the long run. Indeed, the success of Arçelik and Aygaz is rooted in that principle. The same philosophy was valid for the Automotive Group. Dealerships and their services are the true treasure of Tofaş. It is absolutely critical for the dealership to profit and survive. If you do not give a dealership that opportunity, not only will you fail to find qualified and loyal dealers, but you also elicit off-the-book transactions. During Vehbi Bey’s time, we did not have such a broad network of dealers. Vehbi Koç always followed up on the respectability of each dealer in his area, his family life, the taxes he paid, the meticulousness of his balance sheets, and his business ethics. His least favorite kind were the ones that would make money in the provinces, then move to Istanbul, Ankara or Izmir. So much so, that he would warn them from time to time. He would make a point of inviting spouses to the dealer conventions. He always encouraged dealers to become involved in social responsibility projects in the cities they were located. He would guide them in that respect. If necessary, he would provide technical support for their projects.

The first Tofaş automobiles at dealers.

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Hence, the last words were always exchanged by looking out from the same window and not by sitting opposite to one another.

As company-dealer relations changed over the years, the weight put on dealers was always on the forefront and solid working relations were fostered. This approach was embraced from the very first day of Tofaş’s establishment: the founding of Tofaş Oto Ticaret in the early days of production was one of the prerequisites of the same mentality. In order to say “we are here and we are coming to you with this service and product,” Tofaş began placing advertisements in the newspapers in 1971. When the ad of February 2, 1971 was printed, the factory had not yet been inaugurated. Dealers were also included in the full-page ad, featuring the specifications of the car. The ad published, in as little as seven months later, released the addresses of the dealers in 28 cities: “in the eighth month of production, here is Murat and here is the organization” read the heading… Gökçe Bayındır clearly remembers the 28 dealers set up in the days he first began to work at Koç. The only way to raise sales was by increasing the number and quality of the dealers… What did it take to accomplish that, back in those days? No one knows that better than Gökçe Bayındır:

Newspaper ad announcing the service shops and dealers scattered across various cities from West to East of Turkey in the 1970s. Cumhuriyet, September 1, 1974.

28 dealerships had been established when I began. However, that was not enough; we had to increase the number. I think there were 67 cities at the time, which meant that we had dealers in only half of the cities… We asked the Fiat executives, “you cannot set up dealerships without being able to set up service,” they responded. Then, they gave us some norms: A diagnosis tool was to be purchased to determine failure; it cost 300 thousand Lira at the time. They needed land; the cheapest piece of property the dealership would buy costed 50 to 100 Lira… It was almost a million lira of investment. The dealer could only sell two or three cars in the city… His profit was 2,500 Lira on each car…. I did the math: we were asking for one million and giving five thousand in return… Everyone was running away; we were stuck at 28. We toured the cities; I had district managers, they travelled back and forth, but no one was interested. So, I said, this is not going to work; I am lifting the service requisite! They would sell first and if they made profits, if we could help them make profits, then service would follow. Furthermore, we would help them as Tofaş, in the service department. Services were built with Ytong blocks at the time. I would ask the dealer, “Did you buy your land?” Yes. Then, I would pile trucks full of Ytong blocks on his property. We, as Tofaş, would compensate for the cost. That approach pushed things, in a sense. In one year, we had more than 70 dealerships. After that point, things were running the right way, at least with respect to dealerships. If you ask Turks to do something sensible, they’ll do it. Although a few dodged the responsibility, the vast majority – even if the sales were not enough - invested from their personal savings and built the services.

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As 1971 was ending, the ads were highlighting 106 main dealerships, branches, and secondary dealers, as well as 54 service stations. These numbers would rapidly multiply. In order to win these dealerships, Tofaş teams traversed the meandering roads of Anatolia. Gökçe Bey would join them, from time to time. You want to sell cars, fine. But will you give dealerships to anyone, who would and can afford the investment? Who should be a dealer? We must remember that in the 1970s, during which industrialization was beginning to flourish, not one single region of Turkey was like the other and the country had a very diverse population. It was a challenge to impose on the people of Anatolia, who had their own ways of doing business, the business rules, a seventy-year-old European firm had long established, and to ensure that they earn money both for themselves and for you. Let us hear about dealership conditions from Gökçe Bey: The first thing I would say to those who applied to acquire a dealership was this: “two things are forbidden”: 1. Politics 2. Exclusionary Clubs. If you become engaged in them, you cannot spare time for the dealership. There was this thing in Turkey: when you went somewhere in Anatolia, the richest people there would be sought out. Particularly in Southeast Anatolia, the agas (local landlords) were the richest. Once, I noticed that one of the dealers almost had his hand kissed by the customer who was trying to buy a car from him! Because that’s what he was used to. If that hand is kissed, then the dealer will give him the car. If an ordinary townsman walks into the dealership, he is expected to show respect. Yet, what we wanted was the exact opposite of that. We wanted the dealer to go from door to door, selling cars to people, who did not even think of buying one. It was so paradoxical: we are saying “you need to kiss the hand”, he is saying, “no, they should kiss mine”! I later realized that having too much money is not advantageous sometimes. For, the rich do not strive to profit. The sheer title of being a Koç dealership gives them prestige, so they apply to hang that sign above their door. Then you realize that he is only selling 20 cars in that town, when he might have the possibility of selling perhaps 100. If the money they make is for their sustenance, then the dealerships are working tooth and nail for it. If they are already well-to-do, then they see no need to make the extra effort, they become a dealership of “signboard.” Yet what we look for is the real dealership.

The “real” dealerships, Gökçe Bayındır speaks of, grew with Tofaş, over the years and benefited from proper collaboration and programmed growth. Selami Özpoyraz, who says, “We opened our eyes with Tofaş,” began his career in a tiny shop that sold spare parts of Tofaş automobiles in the 1970s. That was just the beginning… Over the years, he neither relinquished the brand, nor Vehbi Koç’s business principles:

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We came to Izmir in 1967 and began working at the famous Kemeraltı bazaar after we arrived. Thanks to my father, who advised that this job had no future and that we should all learn a profession, I began working at a spare parts shop in 1970. Until 1973, I toured the entire country as a door-to-door salesman—what they call a sales representative these days… From Trabzon, Edirne, Datça, Korkuteli, Antalya, and Adana to Diyarbakır, Mardin, and Ankara… Later, I said, I can do this spare part business too, but I had to pick a brand. I made the decision to sell FiatTofaş spare parts, which I had grown fond of. Call it instinct.

Selami Özpoyraz kept his spare parts business until 1983 and was even expelled from college for absence. He eventually took care of that, as well and graduated from the Department of Journalism at Ege University. It was finally in 1992 that he became an authorized dealer and began selling cars as part of the Enriko Aliberti Company. His company became a main dealer in 2002. “You know how you say your vows when getting married—for richer or poorer, in sickness and in health … Well, we chose

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Newspaper ads introducing the factory and announcing the first dealerships. Published in Cumhuriyet, the factory ad is dated January 31, 1971.

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Fiat and Tofaş for richer or poorer, in sickness and in health. We could have acquired other brands much easily, but after all, we opened our eyes to this brand and we continue with it. I don’t know what they will do after I am gone, but as long as I live, we continue with it.” Tofaş’s Izmir dealer Poyraz Otomotif is one of the oldest companies in the city; it has created its own history. As the automotive industry was being established, Poyraz had been able to assume its place as a dealer and expanded its business. The Enriko Aliberti Company they became affiliated with, as they moved to car sales in 1992, on the other hand, is Izmir’s oldest Fiat and Tofaş representative… It has been doing business in Izmir since 1935 and has traditionally always sold Fiat automobiles since World War II. Today, second and third generation members of the Aliberti family are in charge of business. “Aliberti ve Şürekâsı” (Aliberti and Associates) is one of the 28 names on the aforementioned first newspaper ad. Founder Enriko Aliberti, his son and successor Enriko Riccardo Aliberti, and grandson Andrea Aliberti are among the first people to witness the history of Tofaş and Fiat’s past in Turkey as part of a continuum. Enriko Riccardo Aliberti was only 21 when he began working. Yet he clearly recalls the day he used to roll the wheels at the shop as a child: I remember the thrill of 1971, for a new car was to be launched for the first time in Turkey… Murat 124… Our place was located on Gazi Boulevard at the time. It was only a showroom then; there was no service of spare parts divisions. Car service was located elsewhere. I vividly remember when the cars were brought in. At the time, there were the Tofaş Factory, Tofaş Oto Ticaret A.Ş. that sold cars, a main dealer, and a subdealer. Later, the main dealership system was changed and everyone became dealers. At one point, there were 16 authorized sellers in Izmir; four alone on Talat Paşa Caddesi, each 50 meters apart… There was a very high demand and you had to make no efforts to sell the cars. One showroom, one salesperson, the dealer himself, and tea-maker… That was it… Even if you sold five or ten cars, you could still run your business. Automobiles were highly sought after and sold immediately. If I am not mistaken, Tofaş made the decision to require car service from all its dealers in the 1990s. At this point, most of the 16 dealers were eliminated. Today, we are only three in Izmir.

Ali Topçuoğlu, who was introduced to the Koç Group in 1957, was engaged in fuel oil, spare parts, and automotive business as a young businessman in Kilis, Gaziantep. He entered the sales business by acquiring the dealership of Fiat truck despite his father’s advice otherwise. Next, he began selling Fiat’s tractors. Although sales were low at first, they gained momentum and he was able to sell 46 tractors in 1965. Meanwhile, Fiat released the TIR in 1963. Thereupon, Vehbi Koç invited Ali Topçuoğlu and his father to Adana for a meeting.

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We traveled there together. My father went into the meeting. After a while, he came out. But he had a long face… He was demoralized, his face was red and he didn’t want to talk. He was extremely tense and ready to burst. I asked what was wrong. “They didn’t summon us for nothing,” he said. “They sold us a trailer truck. To whom in Kilis will I sell this truck?” So, I told him, “Don’t worry, we’ll find a way to sell it.” Meanwhile, the truck was immediately sold to us; we signed the bills. We found a driver and brought the truck to Kilis. Everyone kept asking, “Whom will you sell this to?” I used some marketing tactics saying, “factories will soon need this, it will be much more advantageous compared to existing trucks.” My father was desperate for not being able to sell it. I did my research, and then I sold the truck to a young friend in 15 days.

Ali Topçuoğlu sold five or six more of those trucks in the next three years. The successful Fiat dealership continued until 1971, when Tofaş began producing the new car… At that time, 115 people applied to acquire dealerships from Gaziantep. Ali Topçuoğlu was one of the two “finalists” but he couldn’t get the dealership. They continued to sell cars as the subdealer of Adana Regional Dealer Tormak until 1991. But the main target was to become a main dealer without giving up! Let us hear the rest from Ali Bey: In 1990, Otoyol General Director Uğurman Yelkencioğlu became the regional director of Adana. I went to see him and explained the situation. He asked me to be a little patient. A year went by and Uğurman became the general director of Tofaş. I immediately scheduled an appointment and said, “You made me a promise; I want the dealership.” They told us to apply right away. They came to see the place on the 15th of November; we handed them the letters of guarantee. The regional director asked how many cars we can sell per month. “I can double the number of cars the dealer is selling here,” I replied. “He has been a dealer for years and still can’t sell that many. I will set aside you trucks full of cars. Sell one of them and I will send you a second,” he said. Three days later, we got to the shop; parked in front of it was a truck with six cars on it. Before I could set up the display window, I set the automobiles on the sidewalk. By evening, they were all sold out. I called to ask for a second. “Sell out the first one, then we’ll send it,” they said. So I replied, “Those cars are long gone, send me another truck.” By the end of the month, we had sold 96 cars in 15 days… That alone had caused a great sensation in the Tofaş community. HOW ARE SALES?

As the population of the Tofaş’ Istanbul team was on the rise, the company left its offices in Şişli in 1972 and moved to the new headquarters building rented in Mecidiyeköy.

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While dealerships wrote their own histories in increasing numbers, 134,867 Murat 124 cars were sold between 1971 and 1976. The 20,000 target was not met the first year; only 7835 cars were sold. However, expectations were exceeded after 1972: 17,609 in 1972, 24,918 in 1973, 28,839 in 1974, and 29,725 in 1975. Murat 124 was in high demand. People were lining up to buy one, as if proving Vehbi Koç’s projections right. Queues were long… In fact, newspapers and magazines were holding lotteries in exchange for coupons. For example, Hayat, the most popular magazine of the 1970s, had broken the news of the campaign in its January 1, 1972 issue, decorated with the pictures of Murat 124 cars in various colors, which ran the headlines, “4 Murat Automobiles, 32 Philips televisions.” The first few lines of the lottery beautifully summed up the “Carriage Affair” of those years: “Automobiles and televisions are no longer luxuries. They have become a need for families. However, this need is still nothing more than a sweet dream for millions of families in Turkey. Planning a surprise for its readers in the New Year, Hayat now opens the doors of this sweet universe for you.” Various advertorials featured famous movie stars posing with Murat 124s. In 1973, Tercüman newspaper had come

A meeting presided by Can Kıraç at the Tofaş headquarters in Mecidiyeköy. The executive office reflects the interior design trends of the period.

up with a thrilling slogan in 1973: “a car for everyone.” With a 6,900 TL down payment and 690 Lira in installments at cash price, it was possible to buy a Murat 124 or an Anadol… All you had to do was to put the money down in the bank… So, how did the dealers take the news? After all, why were newspapers and magazines selling automobiles at a time in which dealership rules and regulations were just becoming rooted and dealers had to agree to strict conditions to acquire their licenses? They were not pleased, of course, as these campaigns were eating away from their sales. After a while, such campaigns were banned.

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At the time, the sales procedure was, in fact, quite simple: Customers waited in line anyway, so there was no need for any customer satisfaction survey, credits, or different alternatives. Buyers would either pay the whole amount up front or buy on credit. Dealerships were adjusting the terms, based on the financial status and payment flexibility of their clients. In the early years, this demand was created by huge waves. The early reluctance soon evolved into a demand that was not even in the projections. Demand was flowing towards the factory… “We didn’t listen to people who said there was no need to establish a dealership in Adana. We were told Adana locals were like Texans and liked big cars. We set it up anyway. A year later, the entire city of Adana was filled with 124s,” recalls Gökçe Bayındır. Of course, there was the black market, as well… A true mess that had to be dealt with for several years… Automobiles were so valuable and the demand was so high that the emergence of a black market was inevitable. Imagine a customer that has to wait in line for two years… Then someone shows up: he has already waited in line and got his car. So the person still waiting in line says: “I am giving you what you paid for, plus an additional 30 thousand Lira. Will you sell me your car?” Of

Left: Ceremony held for the 50 thousandth Murat 124. On the far left is Bernar Nahum with Guarnero next to him. Below: The Murat 124 presented to Miss Turkey 1970 Asuman Tuğberk.

course, he does and makes a quick 30 thousand! Tofaş’s task at that point was to meet the demand. These incidents occurred during the years when the demand was much higher than the supply. However, the rise of investments, the expansion of factory shops, the growth of the suppliers, and the proliferation of dealerships helped overcome this challenge.

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OPAR IS ESTABLISHED FOR SPARE PARTS

Selling cars demands spare parts availability and their easy accessibility. With this in mind, a company named Opar was founded on May 2, 1973 with hundred percent Koç Holding capital. Opar was an automobile spare part distribution company that sold parts either to the dealers or directly on the market. In addition to Tofaş’ main dealers, it also began generating its own dealers. It significantly contributed to the conception that “Tofaş spare parts can be found everywhere,” and thus played a part in the increase of sales. In addition to Tofaş spare parts, Opar was, at first, selling spare parts for the Magirus buses and minibuses, manufactured by Otokar, as well as, spare parts for tow trucks, trucks and busses, manufactured by Otoyol A.Ş. During the same period, Opar imported for the first time, spare parts from Fiat Recambi. However, as of 1992, it continued only to sell the spare parts for Fiat and Tofaş-made vehicles. In 1997, it merged with Tofaş Oto Ticaret A.Ş. İnan Kıraç believes that Opar played a critical role in helping Tofaş automobiles become widespread. The Tofaş name was never used in spare parts. There was Opar. Hence, spare parts were distributed all across Turkey. A vehicle, such as the 131 Şahin, Doğan, and Kartal, were used for many years, as the systems that had been set up worked flawlessly. The windshields, for example, were slid in. Hard to believe, but an average of 700-740 windshields were shattered every day, because the roads were full of gravel. The bouncing gravel shattered windshields. If the windshield is broken and if it is glued, you can’t move the car for 24 hours. It has to dry; you need to leave the doors open… But if it is slid in, you can take the car anywhere. Things got to a point where the engine had two mounting brackets and four bolts… You could dismantle it, take it home, change and fix the piston and its ring. Then you could reinstall it, get in your car and drive the next morning. TOFAŞ AND SPORTS… BEING PART OF TOFAŞ, BURSA , AND A “ TE AM SPIRIT”

Hardly anyone would disagree that sports and the arts remind people of their humanity, rejuvenate the body and the mind, foster creativity, and bring people’s productivity and commitment to life to an extraordinary level. Arts and sports not only help people thrive individually, but due to their unifying impact, they beautify, brighten, calm every area they enter and bring happiness. Their size notwithstanding, institutions that are not directly involved in arts or sports do differentiate, in as much as they capitalize the charm created by the connectivity of sports or arts. Hence, the

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Above: In 1974, Tofaş Sports Club was merged with Bursa Water Sports, Athletics, and Sports Games Youth Club and the name of the club was changed to Tofaş SAS. Below: The athletics team wins second place in Turkey. Far right: Bahri Ekbiç and Yalçın İpbüken appear side by side.

benefits they provide both for their own people – employees- and for the communities they live in diversify and, by extension, their permanence is sustained. In the early 1970s, while the factory was just pulling itself together amidst a number of economic challenges, the Tofaş company was caught up in the unifying power of sports. In fact, it would be more correct to say that, ‘it was able to get caught up in it’. Business was new, but a handful of executives who had taken it upon themselves to handle the challenges, regarded sports in this manner and although it wasn’t “their job” or they were not even asked to do it, they pulled up their sleeves, at the risk of confronting their bosses. In the end, both Tofaş and Turkey won! Today, anyone who wishes to write about Turkey’s history of basketball, wrestling, or motor sports understands the importance of the Tofaş’ name. The establishment of Tofaş SAS, every stage of its growth

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and development, every step it has taken from small competitions to global achievements, sports training, and sports education policies constitute a lesson in Turkey’s sports history. Created by sports-loving amateurs, Tofaş became an institution that generated unforgettable names in sports. Today, Tofaş is proud of and honored by them. Now, before we describe how these people became engaged in sports, we shall relate an incident that took place a few years after sports activities became organized under a club structure, which summarizes the approach we mentioned earlier. Erdoğan Karakoyunlu recalls: Yaşar Doğu, Celal Atik, Muharrem Atik… They had once shaken Europe with their success at wrestling… Long gone were those days, unfortunately. Muharrem Atik was still trying to do something at Tofaş.

Above, left: Vehbi Koç and Muharrem Atik. Above, right: Rahmi M. Koç presents a Koç Holding badge to wrestler Şenol Tenekecioğlu, who became the champion of the Balkan Youth Championship and Mediterranean Games held in Athens in 1979. Behind Tenekecioğlu is wrestler Nurettin Kurt. Behind, on the left is Yalçın İpbüken next to Tofaş SAS wrestling team trainer Muharrem Atik. Below: the wrestling school of Tofaş. “We were looking for the ‘Yaşar Doğu’s of the future; we recruited these kids from Erzurum. We wanted to make them a part of the school,” explains Yalçın İpbüken.

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Meanwhile, Vehbi Koç, who very much enjoyed wrestling, said, “it’s all fine, but are we a wrestling club? Why go to Europe to wrestle?” Tofaş had won first place at the wrestling competitions in Italy. It was widely featured in the newspapers. The next matches were in Bursa… Vehbi Bey was there too, for some other reason. Yet, he had never seen the wrestling club. He had only read about the news and the expenses!... Meanwhile, Yalçın İpbüken told me, “We must absolutely bring Vehbi Bey to the match!” After some deliberation, we convinced Vehbi Bey to go. We left the hotel in the morning, got in the car and went to the gymnasium. When we walked in, we realized that the whole place was covered with flags; Turkish flags, flags of the countries in which the competitions would be held… Vehbi Bey walked in and as soon as he did, there was a huge round of applause as he was Tofaş’s boss! He was very

Left: Tofaş SAS Wrestling Team was the champion of the 1977 International Wrestling Tournament of Debrecen in Hungary. Muharrem Atik with the trophy in hand. Right: Burhan Sabancıoğlu on the podium as European Gold Medalist at 74 kg.

surprised. The wrestling matches began; first, second, third, fourth… every time we won, the spectators were going crazy, chanting, “Hip hip hooray Long live Tofaş!” From time to time, it was “Long live Vehbi Koç!” The entire atmosphere was electrifying. Vehbi Koç always went to bed at 10; even if the whole world burned down, he wouldn’t change his bedtime. The matches ended at midnight and he still wouldn’t leave. We returned late and went to bed. In the morning, the newspapers were delivered and the news had made the front page!... Vehbi Bey couldn’t resist, “Egad, what kind of a business is this wrestling? We work so hard and get such a minor coverage. Yet, the world falls apart, when you beat here a few foreigners!...”

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Vehbi Koç’s approach changed from that point onwards. “He didn’t oppose much,” says Erdoğan Karakoyunlu, “at first he was against it, then became neutral, and eventually supported it indirectly.” The establishment of a sports club at Tofaş dates to 1973, a few years before the event that took place in 1976. The intense discussions between Yalçın İpbüken, Nedim Karakaş from purchasing, and the corporate doctor Murat Kaçar on how to better organize sports activities at Tofaş date even earlier. After the factory was opened, soccer, volleyball, and table tennis matches held between employees had created great opportunities for the employees to socialize. Having played soccer at Davutpaşa Sports Club and working in the HR structure at the time, Nedim Karakaş had took advantage of his skills and experience; people did not know each other at the factory and some activity was much needed to bring them closer. He first organized a soccer tournament between departments. That was the first sports activity within the factory. Yalçın İpbüken, who had played basketball at Galatasaray and in the young national team, led the way for establishing the club, in the ensuing years: Bernar Bey was the person to give me the green light to establish the Tofaş Sports Club. After he would finish his business at the factory and see what he needed to see, a lunch would be held and the entire executive team would be present there. Therefore, those lunches were a way of giving certain messages to the team. It was one of those days. A few days earlier we had partaken in an interfactory volleyball game and the Mako, Magneti Marelli establishment –and it was a small one- had beaten us 3 to 0. Why? Because all of the team players were professionals at Bursasport. They all had put on company jerseys and competed with us. I was a player there too and weighed 105 kg at the time. I am a national basketball player, but we had fire fighters etc on the team. In the end, they beat us hard. At lunch, Bernar Bey said:

The volleyball game between Tofaş and Mako. Tofaş’s defeat opened the path that led to the opening of the Tofaş Sports Club in 1973.

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— “My dear””, he said, a tiny Mako beat Tofaş, in a simple game of volleyball. What is that”? He was poking around. Of course, I couldn’t hold back. — “Bernar Bey”, I said, “if I do it, I go all the way”. — “Let me see you do it, then”, he answered. That’s all it took. No documents, no business plans, nothing. Just this brief conversation.

The establishment date of Tofaş Sports Club was recorded as September 6, 1973. Arslan Köksal, Yalçın İpbüken, Murat Kaçar, Bahri Ekbiç, Ersin Taş, Nedim Karakaş, Suat Maner, Cemal Kurt, Alparslan Akoğlu, Mesut Felek, and Ali Gök became the founding members of the club. In 1974, the decision was made to merge Tofaş with Bursa Water Sports, Athletics, and Sports Games Youth Club and the name of the club was changed to Tofaş SAS. During Yalçın İpbüken’s term, the name of the club was recognized as such. Eventually, the SAS was removed; but only after being registered by this name, in its days of highest glory. Introduced to the club in 1975 and having served both as a coach and a manager for more than 20 years, Murat Kuter, in evaluating the private sector-sports relationships in the 1970s, clearly defines Tofaş’ place. When we talk about sports clubs, there are a number of city clubs we are familiar with: Beşiktaş, Galatasaray, Altay, Altınordu… Then, there are the sports institutions of official state corporations, such as Şekerspor, the sports club of state-owned sugar factories—founded by the factories, but a public investment. The Tekel monopoly was owned by the state, but still had a sports club. At this point, the first club to emerge in the private sector was Eczacıbaşı. Tofaş Sports Club came immediately after that… However, training was held in difficult conditions at the factory, in the cold. Sometimes, hot sahlep drink would be served to keep the players warm. Comfort in sports is limited to vital basics, but it is very important for a worker at the factory to eat and come out to play volleyball or chase after a football during recreational time. Today, sports in corporate communications are not created from a perspective of social responsibility; nowadays, there is an organization that evolves with excitement, sentimentality, but later cleverly metamorphoses that development over time. Unlike today, it was not something, which had been created by Corporate Communications, from a perspective of social responsibility. Here we have an organization, which had developed through excitement and emotion; but smartly handled the progress very smartly, during the process, for evolving and developing.In this particular situation, Yalçın İpbüken’s vision and his approach, as the Personal(HR) Manager of the period, was very important. People used to believe in extreme specialization in one particular area. However, that is not the problem. The more diversity you have and the more you can integrate that diversity into your own field, then the more farther you can travel. That is what, I believe, Yalçın Bey acomplished here.

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Tofaş played a critical role in the development and spread of amateur sports in Bursa. Bursa locals rooted for Tofaş and Tofaş employees became even prouder of their cities. For, success came in stages. The basketball team, which began by winning the group competitions in Bursa in the 1974-75 season, began ascending the steps one by one. First the second League, then promotion to the first League and winning the Turkish Stars (U18) Championship in the 1975-76 season; the first Turkish Cup won in the 1992-93 season, finalists in the 1996-97 Korac Cup, the joy of embracing, the greatest of cups, The Presidential Cup in the 1998-99 season, the Turkish Cup and the Turkish Basketball League Championship in 1999-2000 … After that, the Tofaş Basketball Team was not to be seen on court for a brief period, as it had decided to pull out of the league. The team returned to the first League in the 2008-2009 season.

Another point to underline in speaking of basketball is how, through the right politics, the Tofaş-Bursa-basketball relationship was established on firm grounds in an intricate and strong manner. One of the reasons Bursa locals embraced Tofaş Sports Club as their own, was the Bursa-ification of the players. In transferring players, Nedim Karakaç would ask them to move to Bursa with their families. Thus, many of these names became Bursa residents. And Bursa locals slowly became Tofaş fans. In the ensuing years, young players trained at Tofaş and settled in Bursa returned to the team as managers or coaches. Efe Aydan was one of these players. He wore the jersey from 1988 to 1992 and became the captain of the team. In 2000, he was the Club President:

The invitation designed by Tofaş SAS Sport Club for the celebration to be held on occasion of the basketball team’s rise to the Home and Away Games Premier League. April 30, 1976.

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Working as the director at the time, Nedim Karakaş would call me every year to invite me to Tofaş. When I was transferred in 1988, he first introduced me to Nezih Olcay and Ersin Taş. That’s when I met Selçuk Öncer as well. I had my first serious transfer meeting with Tofaş. I clearly remember telling them at that meeting, “I am not coming to Tofaş to play here for one season. I have changed teams enough times in the last two seasons. And I am not very happy about that. I am coming to Tofaş with the desire to play here for a long time, to be fully engaged in sports, and to remain as a coach or a manager, should you want to take advantage of me in the long run.”2

When the Tofaş SAS basketball team got promoted, in 1976, to the first League, wrestling team was created in the club, as well. The

Basketball team of the factory. Back row, from left to right: Yalçın İpbüken, Osman Mete Altan, Süha Oğuz, Nur Gencer, Melih Kadıoğlu, Yurdum Mutlu. Front row: Bruno Maggi with jersey number 10.

successes obtained in baskeball had opened the way for wrestlers. Having initiated motor sports earlier, İnan Kıraç told Yalçın İpbüken, “Yalçın, you are doing really well in basketball. But Vehbi Bey enjoys wrestling and loves Yaşar Doğu. He has this vision of supporting a wrestler that would represent Turkey, the way Yaşar Doğu once did. Think about it, better yet, do it!” We don’t know if wrestling-enthusiast Vehbi Koç wanted a team, but Yalçın İpbüken went right down to business. Including the cooks, he found so many sports lovers at the factory that the team was 2

Murat Kuter, Tofaş Spor Kulübü, 35 Yılın Hikâyesi, 107.

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TofaĹ&#x; SAS Basketball team at a game against Istanbul Technical University.


immediately created. Yalçın Bey through long and hard and decided that this could only be undertaken with the help of Muharrem Atik and transferred him from TEKEL. The budget was met partly from the factory and partly from Tofaş Oto. Erdoğan Karakoyunlu eyeing İnan Kıraç, was contributing just as much. Finally, the budget was approved and the team Muharrem Atik trained, became Turkey’s champions. Subsequently, the international rise of Turkish wrestlers began again in the European Clubs Cup semi-final games. Comprised of Mehmet Sarı, Mehmet Güçlü, Reşit Karabacak, Nurettin Kurt, Mehmet Yalçın, Ömer Sakızlı, the Tofaş Free Wrestling Team wrote their names and the name of Tofaş in gold letters in Turkish sports history. It was all about commitment…. The team that had become the wrestling champion of Europe was training in the gymnasiums of high schools in the city. In exchange, Tofaş teams were training their teams. Why? Because those were the years of foreign currency scarcity and Tofaş did not have the means to set aside for a gymnasium. “We did everything we could to find the money, remembers Nedim Karakaş: We sold melons, watermelons, and poplars, to find money. We built our own sports equipment; Yalçın Bey was interested in seeing who could build what tool and how. When the sports team traveled abroad, he would take along a few workers from the shops and study equipment with them. We would have made sketches of the sports and training machines we could never afford and have the workers build them at the factory. They all participated because they, too, embraced the team; they all saw themselves as a part of it.

Meanwhile, an additional building of 18,864 square meters was built at the factory and put to use as of 1975. Another unit was under construction across from the press shop. Formerly one of the tender partners of the factory construction, Intes was building this unit as well. One day, the construction manager of the company came in to see Yalçın İpbüken and made an offer no one could ever forget. Let us quote the words of Yalçın Bey from Murat Kuter’s book:3 “Yalçın, because of your big win at the European Champion Clubs Cup, I would like to do something for you as Intes. “What do you have in mind?” I asked. “I would like to build you a gymnasium. You find the iron, get it from Erdoğan Karakoyunlu and I take care of the rest without asking for any money.”

That’s exactly what happened. A gymnasium was born out of goodwill and altruism. Pretending not to know anything, but keeping a close watch, high-level executives had rejoiced in the initiative of the 3

Murat Kuter, Tofaş Spor Kulübü, 35 Yılın Hikâyesi, 87.

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amateur sports spirit and its ensuing success achieved “against all odds.” There is an important reason for underlining the critical support of Yalçın İpbüken, wrestling enthusiast Erdoğan Karakoyunlu, and sports fan Bülent Sayar at financial affairs: Tofaş Sports Club was not a city club, but part of an industrial institution. Therefore, the value of each little bit of help was appreciated and was returned to Tofaş in many ways. The club continues to reiterate the fact that it derives its strength from Bursa, along with Tofaş. THE FIRST MOTOR SPORTS TE AM

In speaking of Tofaş and sports, one of the first things to spring to mind – along with basketball and wrestling- is motor sports. The idea of establishing a motor sports team in 1973 was brought to life upon the suggestion and support of İnan Kıraç. In fact, Murat 124’s participation in races took place prior to the team’s creation. Only a year after its launch, Murat124s joined Ali Sipahi’s unforgettable project Günaydın Turkey Rally. The first ever rally was held in 1972 and one of its most important prerequisit was that, only locally manufactured cars could compete. The Günaydın Rally routes included more than once city. The first course would begin and end in Istanbul, after driving a total of two thousand kilometers, through Şile, Adapazarı, Kandıra, Akçakoca, Zonguldak, Amasra, Devrek, Bolu, Beypazarı, Ankara, Nallıhan, Taraklı, Bilecik, Bursa, Uludağ, Karamürsel, and Adapazarı. With Mete Oktar and Levent Pekün as co-drivers, Murat 124, ranked second in the general category of 38 cars. In the category known as “modified,” the Murat driven by Ender Kitapçı and Haluk Görkem won the first place. A year later,

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Left page: Only a year old, the Murat 124s join the Günaydın Rally organized by Ali Sipahi. Left: Ali Sipahi and his Murat 124. Right: A Murat 124 at the Günaydın Rally of 1975.

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the number of cars racing in the Second Günaydın Rally of 1973 was 63 and 40 of these were Murat 124. In the fall of the same year, İnan Kıraç was convinced that this had to be handled more professionally. What he had in mind was to create a Tofaş Rally Group directed by Ali Sipahi, one of the best racecar drivers in Turkey. Hence, the foundations of the first professional car racing team of Turkey were being laid. The Tofaş Rally Group was the first team to dedicate all its time to this sport and recruit salaried personnel. Working at BP at the time, Ali Sipahi quit his job and became both the director and the pilot of the Tofaş Rally Group. The chief mechanic of the team was selected as Mario Morigi, the Italian service director of Tofaş Oto. The first sports garage of Tofaş was set up in Şişli in 1973. It was both the service shop and the headquarters of the team. Countless pilots and highly specialized mechanics that would contribute to important initiatives in Turkey’s motor sports would be trained here. Tofaş’s garage moved to Zincirkikuyu to Istanbul Oto in 1975. The motor sports community was deeply shaken when Ali Sipahi died of a heart attack on June 1, 1980 during one of the Günaydın Rallies. After staying active in motor sports for a few more years, Tofaş pulled out of the race tracks for nearly a decade. The engagement of a car manufacturer in motor sports is, in fact, necessary and important in several ways. From this perspective, we find that car races and racecars across the world are interconnected with automobile factories. For, R&D lies at the heart of things… Turkey team director of Fiat Motorsports, Koray Kafkas explains from an engineer’s point of view: One should think of it as test-driving under extreme conditions. The components used in Formula 1 or at the World Rally Championship today are passed down to standard cars for years. There are several examples of teams like that in the world: firms have trusted these companies entirely with the R&D engineering development. Because, our components are tested under extreme conditions. Of course it is not possible to transfer all the know-how from these components to standard cars, but when you do, you can advance very far. One can think of it as a battlefield; all progress is made on the battlefield. The know-how learned from these conditions can be used in standard parts. The strengths and weaknesses of a part used in the racecar and tested on the track are revealed, which help improve the parts of a standard automobile. A simple example: the advancement of the injection system and the transition from automobiles with carburetors to injection systems was accomplished thanks to Formula 1.

These studies are not about the comfort of a car, but are about safety and obtaining significant power from small volumes, such as getting great force out of small engines, brakes… Comfort, on the other hand, concerns

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The Tofaş headquarters in Zincirlikuyu and the Murat 124 cars parked in front of it. Founded in 1973, the first motorsports garage of Tofaş was moved to İstanbul Oto located next to this building in 1975.


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standard vehicles. Yet, imagination never sleeps; when dream meets good engineering and rich R&D, it becomes a reality. For now, we will interrupt our journey into the future and go back to our story. TOFAŞ’S FIRST AUTOMOBILE EXPORT

One of the most important events of 1975 was Tofaş’ export to Egypt: 75 Murat 124 cars… As in the case of every first, this incident too, created its own conditions. The cars sent to Al Nasr firm of Egypt were delivered by a ship named Arzu. It was not, unlike what you’d imagine, a cargo ship in the sense we know today. Selçuk Öncer vividly recalls the details of Arzu’s preparation for the journey: Arzu was a classic freighter, so it was impossible for her to carry 75 automobiles. So, what to do? The ship was owned by Turgut Giray; he was Turkey’s Lloyd at the time. If a ship were built, he would decide whether she could set sail or not. That being the case, he had a solution: he had his own ship cut in half! Additions were made and the hull was expanded to accommodate 75 Murat 124s. The cars were loaded in Gemlik. Cars were supported by mountings to prevent them from toppling. Finally, our vessel reached Egypt without any problems. The cargo was unloaded, delivered to Al Nasr, and the ship returned to Turkey.

The ship named Arzu used for shipping the first exported automobiles of Tofaş to the Al Nasr Company in Egypt.

A solution was found yet again. Imagine the surprise of a 20 year-old when we tell her there was no TV in our house when we were young. This story has a similar shock effect on us, but back in those day, a creative solution was found and the goal was achieved. Mustafa Aslaner is another Tofaş member to have worked with Turgut Giray for years and spent 30 years of his career in the imports and exports of the company. Giray was one of the names a young Aslaner, who had begun working in the imports division, could never forget. I first began working at Tofaş in 1977. The economic crisis broke out immediately after that. It was an unfortunate period. Imagine this: each Friday, a deliveryman leaves a letter on someone’s desk, thanking them for their “hard work…” They were bitter times. The circumstances were different too; all the charts were hand-written. Follow-up was important because if you missed the deadlines for the documents, known as import permits, you were in deep trouble! These challenges taught us the importance of teamwork. We used Arzu both for the exports that began with 75 cars in 1975 and for transporting the materials and sheet metals brought from Italy for production. The ship’s owner was naval architect Turgut Giray. He was of Cretan origin and was quite elderly. After 1977, we went to Egypt

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Murat 131 cars brought to the Port of Gemlik and loaded on the ship to be exported.


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together. We were taking Murat 124s with us. When exports grew, he literally cut the ship in half and extended it by 6 meters. As he was an engineer, he knew everything about his ships. We would load the cars from Gemlik. Turgut Bey would attend to the repair and maintenance of the engines with the master workers until Çanakkale. He truly enjoyed doing it. He would disembark in Çanakkale and the ship would continue its course. Later, Turgut Bey developed a system; we built it at the factory, but he designed it. It was a suspension system. Imagine a box made of iron; you hang it from the ship’s ceiling. This way, the empty volumes could be used and we were able to increase the number of cars aboard the ship to 125. At first its looks simple, but you have to factor in the swinging of the suspension system as the ship is at sea and adjust it accordingly.

The export business is a two-way business; you are dealing with another country with different habits and work methods. Professionalism, ought to be concealed in the ability to maintain this balance. What happened to Temel Atay during those years is a good example of how unexpected details of business can appear in the course of the transaction and how one can learn from this: We were exporting CKD (disassembled) cars to a company called Al Nasr Automotive in Egypt; the cars were assembled there and we had a large share in the Egyptian automotive market. Most of our addressees were considerably slow and because of the way they did business, many unnecessary problems were arising and we had to pay frequent visits and join meetings on the technical levels to overcome them. Once, I was at a factory for an unscheduled meeting quite far from Cairo and shortly after the delayed meeting began, it was announced that there would be a ceremony for a department head’s retirement from the factory and it was suggested that we all join it. Thinking, “The customer is always right,” I agreed to join the ceremony and resume the meeting afterwards. Incredibly enough, the ceremony lasted four hours; speeches in Arabic I didn’t understand a word of, went on, and finally the time we had set aside for the meeting ran out. It was already the end of their early business hours and although my plan was return home the next day, I had to go back to the hotel, postpone my flight, and hold the meeting the next day. This is an important example to remind us, to be prepared for how business is conducted in different countries.

During the beginning of the exports, Mustafa Aslaner was supervising both the loading in Gemlik and was traveling to Egypt to unload the cargo. At first, among the travelers were Sait Fere, who worked as Quality Supervisor in charge of Machining Shop and Vehicle Final

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Control between 1970 and 1997 and Bruno Maggi, who worked at Tofaş as Assistant Director of Maintenance and technical translator from 1970 to 2006. While they were in Egypt, they were taking care of the unloading and the training of workers. As a young and freshly initiated Tofaş employee, Aslaner’s experiences in Egypt and his dealings with a culture he was quite foreign to in terms of work and working conditions still linger in his mind as fond memories. Each one of the first export stories are more interesting than the next; today, they make people laugh, but when recounted collectively, they demonstrate the conditions of the period in which they occurred. They are records of “how things got here.”…If only Gemlik could talk, one would think, but the memories are all very much alive in Murat Aslaner’s head: There is a port in Gemlik at the center; all the shops dock there. It was primarily built for passenger ships, but cargo ships could dock there as well. As we were loading the cars there, we would park the trucks right at the center of the city. They had to stay right at the public square for two-three days and it was a disaster, of course. There was a fishing port at the entrance of Gemlik and a vacant plot. After a while, we began parking there. Another shipment was due… I was new at my job and did not know anyone at the factory. The cars were taken to Gemlik and I got there in the afternoon. A guard from the factory was keeping watch. I saw him standing at attention and across from his was a uniformed gentleman with epaulettes… I thought he could be from the Municipality police. I walked right over and said, “Sir, welcome… I am Mustafa Aslaner from the Tofaş Automobile Factory…. How can we be of help?” I didn’t want us to get in trouble because we leave the cars at the public square. He listened without flinching and said, “all right, my boy, go on,” and left. After he left, I asked the guard who it was. “He’s the marshal,” he said. “What marshal?” Retired head of the fire fighting unit at the factory!...” Apparently, all of Bursa knew, who he was. Once the cars were lined up at the fishing port. It was pitch black there and almost deserted… We had two guards. At night, they were picking up the keys of the cars at both ends and keep watch. The next day, we counted the cars, as did the customs officers, then loaded them on the ship. The ship set sail. A while later, we received word that a Murat 124 without a license plate was touring in the city. “Is it one of yours?” the officers asked. As it turns out, the guards fell asleep and the thieves pulled out the car from one end and took the one next to it. We immediately warned the Egyptians…

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MUR AT 131

Tofaş had planned to continue the production of the Murat 124 until June of 1976 and to switch to the 131 model to replace the previous one as of July. Transition to the 131 model had been included in the second phase of the investment project, submitted to the official authorities. However, as the issuing of the decree on this issue was to be greatly delayed, a decision was made in May of 1976 to continue with the production of 124 for a little longer. Therefore, the second half of 1976 was recorded as a very serious and critical period for Tofaş, as there were investments to be made for the 131 model; parts had been ordered to the suppliers and deals had been signed. However, the expected and finalized decree was never issued and a portion of the orders was cancelled. Finally, after Tofaş reached an agreement with the government, decree no. 7/12552, sanctioning the production of Murat 131 was issued after it was published in the Gazette on September 17, 1976. The canceled orders were renewed and a busy period began, to start the production of the new model in a complete and unproblematic manner. The 134,867th Murat 124 was manufactured on December 28, 1976. It was also the last car, bringing to an end, its productions. Tofaş ceased the production of this model and replaced it with Murat 131, which was the exact replica of the Fiat 131 produced in Miafiori. Highly popular, the 131 was manufactured for many years. It even found a place among the popular movie characters of the period. It appeared in the 1985 feature film Aşık Oldum as one of Şener Şen’s cast mates. The main characters, played by Gülşen Bubikoğlu and Müjdat

The dashboard and the steering wheel of the first Murat 131 featuring the Tofaş logo. Next page: The first Murat 131 currently displayed at the Tofaş Museum of Cars and Anatolian Carriages in Bursa.

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Gezen in the feature film Gırgıriye, hoped to tour Europe with a Murat 131, as their dream car. — “If we’re gonna do it, let it be “eaven and ‘ell”… Let me buy you a 4-banger, Murat 131… I’ll write ye’ name Güllüm on the rear bumper…” — “Write on the front bumper, too, let me neighbours turn green with envy…“ — “And a stereo tape, capisci… “ — “And two laced pillows at the back… I’ll knit the lace with me own hands…” — “Let me drive you all around Europe…” — “ Europe?..” — “Of course… Edirne, Çorlu, Tekirdağ, Keşan… Let’s tour all of Europe…”

The headlights and front grille of the Murat 131 chassis no. 0000001 and the plate inscribed with the chassis number. Next page: Detail from the front grille bearing the Tofaş logo.

Born in 1976, Murat 131 was put on the assembly line in May. A group of Murat 131s was exported to Egypt in June of 1977. 280 had been sold and the first group of 106 cars was loaded on the ship from Gemlik on June 4th. The remaining cars were ready to be delivered the following week. Export initiatives were not only confined to Europe, but included Greece and Iraq as well. Meanwhile, news about the localization of the components in the automotive sector generated interest in the press. In a feature on the Murat 131, Cumhuriyet had reported that, 76% of the engines were locally produced. It was further penned that, the 35 thousand engines to be produced by Döktaş, would require nearly 1,650 tons of castable material to be provided domestically and that the foreign currency savings would reach to 3 million 200 thousand U.S. Dollars, the following year. The story also quoted Tofaş officials who stated that the locally produced percentage of the vehicle had risen from 67% to 85% and that they were working towards arriving at 100%.4 4

Cumhuriyet, August 10, 1977, 5.

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Speaking of Döktaş, one of Vehbi Koç’s “no waste policy” stories concerns this company. Kaynak Küçükpınar relates: One of Vehbi Bey’s most striking characteristics was his “no waste policy,” even the slightest bit of it… The main reason why we were established close to the Döktaş foundry was as follows: At the Tofaş factory’s press shop, residues and scrap material accumulates during the shaping of all the sheet metal components. We used to press them into boxes, which is why we had made the pressing investment. They were then allocated to be used in motor block casting at the Döktaş foundry. We would sell the scraps to Döktaş. That was my responsibility. Vehbi Bey would be mad if the scraps were bought by another scarp dealer although if Döktaş was paying me 10 Lira, I could have sold them for 30 to someone else, but he wouldn’t let us sell the scraps. “How many tons of sheet metal scraps did you sell to Döktaş this year?” Of course, I couldn’t answer that. “I will give my answer in writing sir,” I used to say and send him a written letter.

The second half of 1976 was not only about the production of the new model for Tofaş. On June 30, 1976, there was a gunfight in front of the Tofaş Factory. The incidents arose when workers affiliated with the Türk Metal-İş Union began distributing a manifesto. Meanwhile, workers coming to the factory for the shift change reacted to the union members and things got out of control, once the union members got involved. As the manifesto distributors got into the minibuses and began to leave, a gunshot from one of the vehicles killed a worker named Muammer Çetinbaş and wounded three others. Following this tragic incident, workers affiliated with DISK (Confederation of Progressive Trade Unions of Turkey) took action to protest both the killing of Muammer Çetinbaş and the DGM (State Security Courts). Starting with Tofaş and Renault factories in Bursa, nine thousand workers halted production. The proposed law draft of DGM was dismissed as it had not been enacted in due time.

Newspaper ad designed for Murat 131. Cumhuriyet, February 23, 1977.

E ARN YOUR OWN FOREIGN CURRENCY

The late 1979s… Economic crisis… Foreign exchange bottleneck… There were no imports, problems were abounding, “open account” imports were discontinued because people were not convinced Turkey could pay for its foreign exchange debts. Because of that, the procedure of sending the goods and collecting the payment afterwards was no longer an option. Money was needed for investment, but there was none. Taking a loan out was almost impossible; only the state was borrowing money from the IMF, which was only loaning money at a certain interest rate with limitations and Turkey was falling short of narrowing the foreign trade deficit. Sold goods could not be replaced… It was also a painful period for industrial enterprises, as well. Tofaş was establishing dealers, but the manufactured vehicles were not enough for buyers, as everyone wanted to own a car…

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Yes, but how? There was no foreign currency!... There was no oil import, so there were constant power shortages. The only goods that could be sold were hazelnuts, pistachios, and tobacco…Import-substitution policies were not generating foreign currency. Tofaş had to keep manufacturing cars, but needed to bring parts from abroad. Yet, how? Having found himself at the running accounts, financing, budgeting, and statistics unit of Tofaş’s accounting department in 1973, Selçuk Öncer was merely in his 20s at the time. As a young finance employee, his career had begun in a system that was trying to generate inexistent funds and transform them into production; he was to contribute to the growth and development of Tofaş’s production over the years. What could perhaps be described as “productivity under duress,” helped find answers to facilitate production in the absence of foreign currency in the late 1970s. Some of the answers were provided through the efforts, to which Selçuk Öncer contributed: There was no foreign currency in Turkey. You couldn’t import anything. Out there was a queque of people waiting to buy automobiles, but since we couldn’t import the goods, components were stuck at the customs. We had the money in Turkish Lira, but we couldn’t transfer it due to the shortage of foreign currency. So, what to do? We had a decree issued by the Central Bank of Turkey: it said in effect, “Go, find your own foreign currency.”… Afterwards, we deliberated over it both at the company and at the holding…. We decided to go directly to the gastarbeiters in Germany, to take advantage of this decree. Our objective was as follows: let us have the foreign currency flow into Turkey from abroad, deliver

Automobiles were sold in exchange for foreign currency in order to combat the foreign exchange bottleneck in the late 1970s.

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Brochures designed for the campaign of auto sales in foreign currency addressing the Turkish gastarbeiter in the late 1970s were distributed at the offices opened in Germany.

the vehicle in Turkey, and transfer the money from there… Think about it: we can’t ship the car from Turkey to Europe. They already have there more cars. What would they do with the cars? But, if we would deliver the cars here in Turkey, then we’d transfer the money back home. I think it was August of 1978; we got into the cars. We put ads in the German newspapers: “Tofaş sells Murat 131 for 13,825 Mark”. At the time we are switching from the 124 to a sedan (saloon)-type car; longer and more luxurious with a 1300 engine… The ads announced that four offices were to be launched: in Heilbronn, Düsseldorf, Berlin, and Hamburg. These offices would sell cars to Turkish gastarbeiters for 13,825 Mark and we knew at the time that they were sold for 50% more on the market, but there was little else we could do. So, how would the system work? We had to organize that before we left for Germany. Foreign currency transfer was one option, but we had to be careful about smuggling issues; we could get into trouble due to a loophole

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in the law. What we would do was as follows: Talk with the Central Bank to have them issue a notice of implementation along with the decree. Meanwhile, we heard stories about how the Turkish workers in Germany were being swindled. So, we had a real wall ahead of us to overcome. Finally, four us –Gökçe Bayındır, two colleagues from marketing, and I- got into the Murat 131s. First to Kapıkule… The trunks of our cars were filled with advertising brochures… We also had t-shirts printed with the photograph of the car and 131, so we could give them out to people. We encountered our first problem in Dimitrovgrad, Yugoslavia at the Yugoslavia-Bulgaria border… We were not allowed to pass due to the high number of t-shirts in my trunk. And we had no time to deal with it! I had already put ads in all the newspapers announcing the launch of the Dusseldorf office. So, what to do? “You have to go to Dimitrovgrad from here, put the t-shirts in a box, and send them to Germany by train,” they said. We did exactly that!... After dodging a few bullets, we finally reached Dusseldorf at night after a three-day journey. I was at the office at 6 o’clock in the morning. We cleaned the office, hung our Tofaş-Fiat and Turkish flags, set out the brochures, the press came, and we started off right there.

The journey was quite a challenge, but the rest was no easy feat either. The newspaper ads were published and phones began to ring. However, a more effective marketing strategy had to be developed. The team decided to visit Turkish coffee houses and grocery stores and began chatting with potential customers there. They familiarized themselves with the locals and made friends. People trusted them. Selçuk Öncer finally sold his first car: I prepared the paperwork at the office, took the customer to the Turkish consulate, and we filed all the documents. Next, we went to Dresdner Bank. The first transaction was critical; we never touched the money! The buyer gave the teller his own money and filled out a form. The recipient was the Central Bank of the Turkish Republic, Istanbul branch; but there was a fine print underneath: “Tofaş Turkish Automobile Factory shall receive the foreign currency, once it delivers the document that the buyer or the person it gave a warrant of attorney has submitted to it.” Now, could the gastarbeiter lose money this way? No! That’s one… He would not deliver the money until he received the car, that’s two… Hence, the system started working.

This was a six-month period. Once the system was consolidated after four months, Selçuk Öncer returned to Turkey and another person was appointed to his place. During this period, 1385 cars were sold at 13,825 Mark a piece and more than 19 million Marks of foreign currency was thus obtained. Still, car sales were still not at the desired level. Even worse, a decline in sales had emerged. Production of Murat 131s had begun at 20,662 in 1977, but had gone down to 12,350 by 1980.

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The 1980s: the changing economy and the new TofaĹ&#x; automobiles


“…Is your military service completed? It right is. Then, pull right over to Ankara. Straight back to Rıfat Usta’s again. You’d start putting aside a few hundred bucks there at the repair shop…it wouldn’t take much either to drive a shared cab at nights … that way, before summer sets in next year, you’d have saved up ten thousand bucks. Once you‘d advanced it as a down payment, you’d be able to buy a Murat taxi… But Bayram, for God’s sake. When you’re that close to gettin’ a taxi, don’t you spoil it …” Adalet Ağaoğlu Adalet Ağaoğlu, Fikrimin İnce Gülü, İstanbul: Remzi Kitabevi, 1981, 79.


Fikrimin İnce Gülü

is one of the most unforgettable road stories of ontemporary Turkish Literature… Author Adalet Ağaoğlu had used an extraordinary style in portraying Bayram’s thoughts and experiences as he drove his beloved Balkız back to his village and how that period in Turkey was progressing closer to the 1980s. Everything was purchased from abroad for the industry to function and you were also dependent on foreign countries for oil, but you can’t import oil either and your factories stop working… Attempts were made to avert this extended crisis, first by a series of economic measures, known as the January 24th Decisions. The end; however, came with the military coup of September 12th. Prime Minister Turgut Özal launched a significant economic program change in 1983. Importsubstitution politics diverged towards a policy of export oriented industrialization and the custom walls slowly began to thin down. 1981 - 10 th YE AR IN PRODUC TION…

A decade has passed since the beginning of mass production at Tofaş. A ceremony was held at the factory in Bursa on February 12, 1981 to celebrate the 10th anniversary. While sharing information on the growth and production of Tofaş in his speech, Vehbi Koç had also offered an economic assessment of the past 10 years. “Over the past ten years, Tofaş has been greatly affected by the oil crisis as well as the economic issues of our country. The foreign exchange bottleneck and strikes has halted the production increase of Tofaş and suppliers and inflation has escalated costs. Nevertheless, 209.824 automobiles were manufactured in a decade, domestic engine production has been achieved, collaborations have been made with 215 local supplier industrial institutions, and 401 million Dollars of foreign currency has been saved.”

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Tofaş’s first General Manager Guernero’s tenth-year speech, on the other hand was not only reviewed the past decade, but was quite emotional as well. Esteemed guests, dear friends, I would first like to convey the most sincere and amicable greetings of Fiat from Torino. I believe that much like I am, you are not simply regarding this celebration as a commemorative ceremony or a pleasant get-together, but a perfect opportunity to review our past and future endeavors. There is no doubt that important strides have been taken in the past ten years. More than 200,000 cars were manufactured during this period. If put those cars in a single line, it seems like a train of 1000 km and this is an amazing success. Yet, you could have achieved so much more. Unfortunately; however, there have been some difficult times that seriously challenged the working conditions of both countries; these volatile and unstable circumstances have considerably pushed our limits and impeded out work. Both the general climate of this period and internal-external factors have directly or indirectly played part in punishing our automobiles and, along with that, countless individuals from both sides. Therefore, I would like to express my sincerest admiration and appreciation I have for the Bursa factory personnel at this gathering in which you are present as our guests of honor: from workers to executives, most of you have undertaken this work with us and grew alongside us. I would like to extend my gratitude to you and your families. At the same time, I would like to express my thanks to the Bursa officials: they have been nothing but constructive and positive in all of our dealings. … An automobile should be considered and admired for the meaning it holds in the business world. Admiring automobiles is tantamount to defending, popularizing, manufacturing, and multiplying them. That is our mission. … Our faith in Tofaş has been proven by the sacrifices we have made to sustain Tofaş’s activities vis-à-vis the challenges we have faced in recent years. … As I convey my best wishes to Tofaş and my wishes for success and prosperity for your country, I would like to set our calendars to meet again here in another ten years.

AUTOMOTIVE SUPPLY INDUSTRY AND THE PUSH FOR LOCALIZ ATION

According to the agreement signed with Fiat during the early stages of the factory, the general manager and factory director of the company would be Italian and their deputies Turkish. In 1981, Guarnero, who had served

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as general manager of Tofaş for ten years, retired on age limit. Hence, the Italians were offered to appoint Otoyol Sanayi ve Ticaret A.Ş. director Temel Atay as the new general manager. This was against the agreement, but it was nonetheless accepted and marked the beginning of a very important period of Tofaş. Temel Atay began work in September of 1981. Bernar Nahum conveys his thoughts on Temel Atay as follows in his book:1 Temel Atay’s appointment as the General Manager of Tofaş was highly appropriate. He managed Tofaş in an extraordinary manner and still does. During this period, production at Tofaş was on the rise. Due to ongoing investments, today, Tofaş’s dependency on foreign markets is brought to a minimum.

When Nahum’s book was published in 1988, Temel Atay was still general manager. He maintained that position until 1993. Temel Atay’s term was important in terms of the rise in production, but it would be correct to same that his name was identified with the idea of going local in the history of the institution. Emerging in a small and very slow way following the inauguration of the factory, the supplier industries began to grow as automobile production increased. Expansion of the supply chain was accelerated. Temel Atay experienced firsthand how disadvantages could be changed into advantages at a time in which shortage of foreign currency posed an important problem.

Temel Atay, the first Turkish general manager in the history of Tofaş, recognized for his efforts to domesticate production in the 1980s.

The shortage of foreign exchange was one of the most important problems of Turkey in the 1980s. Unlike today, imports were limited; companies would get in line with a TL account of advances opened at the Central Bank and a few months later, foreign exchange rationing would be provided in exchange for this advance. The only way to increase production vis-à-vis this lengthy and limited import foreign exchange was to minimize the foreign exchange needed per car and maximize the highest possible number of locally produced parts in manufacturing. With this view in mind, we prioritized the purchase of local parts and, by extension, the development of the supplier industry potential. This way, supplier industries, as well as criteria such as technology, capacity, product diversity, and production quality grew rapidly and successfully. Although other automotive companies made similar attempts, Tofaş’s efforts and results in this area were far more advanced. The birth of the powerful supplier industry companies that can support local production and also export to the rest of the world occurred during that period. When I was appointed as general manager to Tofaş in 1981, the market had slowed down, car sales had declined, serious stocks had accumulated, and therefore, the financial structures were in dire straits. Concerned

1

Bernar Nahum, Koç’ta 44 Yılım, Istanbul 1988, 183.

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that the already troubled company would be further affected in terms of management and production level with my appointment as the first Turkish general manager, Vehbi Koç would often solicit information on the phone and try to establish his own control system. He must have been satisfied with the answer he received and the emerging results, as he would either thank me at the end of our telephone conversations or compliment me. In the ensuing years, as Tofaş’s production and profitability levels began breaking records, these telephone exchanges became less frequent, although he continued to express his satisfaction with the progress of the company in every encounter we had.

Kaynak Küçükpınar was one of the most important names in the creation of an automotive supplier industry in Turkey. In 1960, he had won one of the scholarships the Italian government had awarded the Turkish government as part of their cultural agreement and had studied shipbuilding and mechanical engineering at the University of Napoli in Italy. He began working at Tofaş in October of 1970. As he was fluent in Italian, he was working with Martinotti at first. Tofaş’s buildings had just been completed and the production equipment and assembly lines were about to go into operation. He assisted Martinotti for a year in putting contracting companies and the Tofaş facilities into operation, in preparing the progress billing reports of contractors, and keeping the minutes of technical meetings. Later, he was appointed to the directorate of purchasing. There was an Italian director named Rosatti at purchasing. He was highly gifted. We learned many things from him. Turkey hardly had anything at the time. We would begin work with technical drawings, go to firms that had invested in this with the specifications; this is how we put into operation all the components and automobile parts we needed. This was the most important activity of the factory’s growth after its establishment. Going local in the automotive industry in Turkey. In the beginning, we were importing everything except the sheet metal components of the car body; they were pressed at the press shop and shaped out of steel sheet. Then, they were assembled at the body shop with spot welding to create the body. So, only 20% of the vehicle was locally produced. Of course, with paint and assembly, that ration would reach up to 40%. With the engine components we introduced later, steering wheels, and similar other parts, we had reached 60% in the Murat 124 model and climbed to 75% by the 1980s.

Through Koç Holding’s investment, Döktaş had gone into operation as a large foundry in Orhangazi in March of 1977. Kaynak Küçükpınar explains how all related components except the motor block casting was manufactured at Döktaş as gray cast iron. There were people who wanted to invest and set up businesses in Turkey; Erdoğan Demirören was one of them. He was a young businessman at

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the time. He came into the picture with Ford Otosan and made us an offer for piston investment. Hence, we met with him and his company to discuss the technical specifications and images of the engine pistons of the 124 model; casting molds, metal sheet processing equipment, machining equipment, and heating processes were necessary… We set out to project the investment of each of these items and bring them to life. At the time, there was no such technology in Turkey. They acquired the technical license of a German firm called Kolbenschmidt and began production. They were manufacturing pistons under the Motopar brand, so they supplied our pistons. Later, another company had a licensing agreement with Goetze and became Istanbul Segman Sanayii. They also invested in pistons and manufactured snap rings.

Above: The motor blogs seen in the photographs belong to the locally manufactured engines produced at the Döktaş Foundry in Orhangazi, the machining of which were completed at Tofaş. With a new investment program designed in the 1980s, a new engine production with an annual capacity of 200 thousand per year was put into operation. At the time, Tofaş made significant contributions to the engine production technology in Turkey. Below: The windshield wiper manufactured by Mako.

We were processing the motor block at Tofaş. We had machining benches at the mechanical shop; it was an asset at the time. We were buying the pistons and the snap rings from the companies I mentioned and also important some parts such as the crankshaft, the piston rods, etc. When did we begin producing these? With Temel Atay… He is a legend at Tofaş and holds a significant place for me. He worked at Ford in Detroit as an engineer. Our 75% domestic production gained incredible momentum after Temel Atay was appointed. The crankshaft was manufactured at Döktaş. Of course, they were subject to careful scrutiny and approval by Fiat, which they never gave easily. The quality check and homologation of a piston rod would last months. We first began with the bodywork and brought local production to 75%. We transitioned into engine investment in the second phase, which took place between 1980 and 1990. Meanwhile, investments to increase production capacity were made at the same time. By the end of 1993, we manufactured 200 thousand cars, which was a Tofaş record, the year in which we made the most money and had the greatest turnover.

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Kaynak Küçükpınar’s term at Tofaş ended 24 years later and in 1994, he became the general manager of Mako Elektrik Sanayii. Mako was another automotive supplier investment co-founded by Magneti Marelli and the Koç Group; parts such as alternators, ignition engines, windshield wiping engineers, and heater engines were manufactured there. During Temel Atay’s term, Mako invested in a second technology; all lighting equipment, headlights, taillights, turn signal lights, and interior lighting lamps were manufactured there as well. As purchasing director, Kaynak Küçükpınar was in charge of these at Tofaş; he would initiate, develop, put into operation and get approval for these parts…. All the corporations Küçükpınar listed, as the actors created and diversified automotive supplier industries, were expanding production in the years that localisation made a huge leap. Koç Holding had an investment called Jantsan for wheel ring production in Bilecik. Uzel Tractor Factory would also manufacture wheel rings for us at their old factory in Rami, Istanbul. We would also purchase coil springs, suspension springs, and stabilizer bars from Uzel. By the 1990s, through Temel Atay’s zealous efforts, pressure, courage, and the momentum these gave us, we convinced Fiat to locally produce all these parts. Fiat was making money from exports, but of course it was also important for Fiat establishment to make money; in fact, that was even more important because Fiat was a partner, after all… A good manager had to give this process the green light. At that point, in the Murat 131 model, if you would take the import value of a car at 100, we were able to manufacture 95 percent of that locally. There were many advantages of local production in terms of pricing, compared to Italy: logistics, transportation, control, extinguishing debt, and pushing the company to ameliorate its quality and obtain results…. It is important to remember that we went through some very tumultuous times until the 1980s. The strikes across the country had plagued all the industrial corporations. The politics of Temel Atay after he was appointed as general manager to Tofaş in 1981 carried the factory from that state into its successful period of the 1990s.

Let us go back to 1981 again: the same year, a young engineer named Ahmet Altekin was in charge of quality control at Tofaş. He was a first-hand witness of the local production endeavors initiated by Temel Atay: Engines and powertrains are among the most important parts of a vehicle. They are just as important in terms of cost. We were trying to locally manufacture the engine and the transmission box. However, the gear wheels for the powertrains were imported. They had to be manufactured in Turkey. You buy the machinery, fine, but there is

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no raw material for the gear wheel. We look at their consumption at a certain specification; we see that our steel need for an annual production of 14-15 thousand units is limited to a thousand kilos. Asil Çelik was the first fine-quality steel manufacturing plant in Turkey at the time. But Asil Çelik’s lowest production tonnage was 14 tons… If you were to add up all of our steel needs at a certain specification, it would remain at 3 to 5 tons. Therefore, when Asil Çelik manufactured a 14-ton charge, neither we could afford to buy that steel, nor Asil Çelik would need to use it in some way. Later, we collaborated with Renault. Although the French and Italian designs were different, we brought together as many similar steels as we possibly could and went into production with Asil Çelik through a third Asil Çelik specification that complied both with our and their steel specifications. This way, we could bring production to 7-8 tons.

This example marked the beginning of future R&D initiatives… So, didn’t the parts cause any problems? For example, if a problem in casting was resolved for the motor block, a similar problem could emerge a few years down the line. Then, everything had to be unlearned and re-learned. Invited from Fiat to Turkey from time to time, technicians were guided according to their area of specialty. One would come solely for casting, for example, whereas another for the control of the lab materials… Yet, that was not exactly the case at Tofaş;

Before they were produced by the supply industry, car seats were manufactured at the factory.

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Ahmet Altekin clearly recalls, “I was not only in charge of casting, but steel, plastic materials, electrical wires, sewing needles, and problems arising from sewing threads.” Yes, you heard the “sewing” part right’ At the time, the seats of the cars were manufactured at the factory as well. Which is exactly why Tofaş’s purchasing inventory included sewing needles and threads. Kaynak Küçükpınar remembers seats both for the 124 and the 131 were manufactured inside the factory. “Towards the end of 131 production, space was becoming extremely limited as the factory expanded… Therefore, we outsourced all these kinds of production to an industrial firm.” Tofaş learned through production and expanded its circles as it learned. Speaking of seats, let us hear about the times from Umur Üstünberk, who supplied Tofaş the first foams used in seat production: At the time, the seats were manufactured inside the factory, but the foams were supplied elsewhere. We became involved in foam manufacturing first for the automotive industry. It would eventually lead to manufacturing the seats themselves… We began by producing the seat cushion foams at a henhouse in Bursa because our building wasn’t ready yet. Then Tofaş asked for foam and the rest was history. Tofaş’s driving force and support was incredible back in those days. Temel Bey would call me in and say, “you will manufacture this part for me,” and we would do our best to replicate it. Later, when Tofaş outsourced seat production, we made the first offer and told them we can give more competitive rates with our internal costs. Then we began to expand.

Martur officials state that one of Tofaş’s greatest benefits to their company was their encouragement to increase their design and engineering capabilities. Teknik Malzeme was another foam manufacturer that began working with Tofaş. Established in 1972, Teknik Malzeme was the first step towards the present-day Orhan Holding… Having learned that the company was in foam production, purchasing director Kaynak Küçükpınar visited Teknik Malzeme with his colleague Halim Özkartal; they met with firm’s founder İbrahim Orhan and reached an agreement. Foam production for Tofaş began in the night shift immediately thereafter. Meanwhile, an important problem was resolved; waiting at the parking lot for lack of seats, the vehicles were soon equipped and sold out. The firm’s collaboration with Tofaş continued in the exhaust pipe production of Matay in 1987 and the first complete seat production of Teknik Malzeme in 1990. Following Tofaş’s Palio production decision, the company co-founded a firm with Italians in 1997 for the production of gear mechanism and flexible clutch cable. The production of seats, exhaust pipes, fuel lines, gear mechanisms, and flexible clutch cables continues today.

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As someone who witnesses the stories of both companies from the onset, Kaynak Küçükpınar admires their achievements: Umur Üstünberk provided specialists from England and achieved fabric production for the automotive industry in a technological sense in Turkey. Similarly, İbrahim Orhan did the same. They both manufacture seat fabric, because this particular fabric has specific and multiple features. Throughout a 100 thousand kilometer test drive, it cannot tear, must be stain resistant, remain durable; it has incredible characteristics. Umur Bey literally nurtured its technology in Turkey. The same can be said of İbrahim Orhan.

The examples of the growth of supplier industries and their local production are countless; each one constitutes another success story. Meanwhile, it is equally interesting to learn that even the first glove compartments were manufactured at the factory in the early years. Ahmet Altekin is a witness of that period and of the details as an engineer. You first build the sheet metal skeleton for the glove compartment, then you cover it with a plastic material, for example polyurethane, then give it that leathery appearance. All that process was completed at Tofaş. In no other automobile assembly factory in the world is seat production or such detailed glove compartment production made. Yet, that was exactly how it all began, as there was no supplier to do the job for us. Once numbers reached a certain level with production, a supply chain began to form in Bursa with the attempts to locally manufacture parts and bring them out of the Tofaş factory. This constituted the core of today’s automotive industry. Tofaş put great weight on local production. Truly enough, imports were down to 5-10 USD, as we were also producing the engine locally. The reason behind it was that production continued despite a huge foreign exchange problem. Tofaş could only manufacture with what was allocated by the state; therefore, if the state was giving you foreign currency for 5 thousand cars, you could only bring carburetors or distributors for that many vehicles. Therefore, there was a great need and demand for making things local. Later on, Tofaş particularly encouraged local production. This yielded both positive and negative results; the good part was the increasing production of parts in Turkey. The downside was that no one was familiar with the majority of the technology in Turkey. For instance, the fact that plastic turns white with wearing and can easily break… However, as people learned about the nature of substances, things changed for the better. People learned as they manufactured.

People learned as they manufactured and manufactured as they learned… When automotive supplier industries were at their infancy still, Fahrettin Gülener, a zealous learner with an appetite for production,

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had taken over his father’s heater business to build his molds as a young constructor mold producer. He had, in his own words “dared” to bring in huge machines into his shop in Bursa and was working almost around the clock. One day, in 1972, as he welcomed Cermegon Tüfekçioğlu of Tofaş through the doors of his little shop, he had no idea how his life would change: Cermegon Bey showed up with an apparatus in his hand: — Can you make this? — Where did you find me? — They said there is one molder in Bursa and that’s you! — This is not a mold, it’s an apparatus. — Eh, if you’re the guy, you can make it! — Fine…

The apparatus; Cermegon Bey had brought was a puller. Fahrettin Bey worked for three months after he said “fine.” It was nearly impossible; the ones he manufactured kept breaking, but he was relentless. His father would stop by from time to time and ask in his immigrant dialect, “You forgot to make money, eh? You know how to make money?” Fahrettin Bey kept saying, “yes dad,” “but if I can do it, I will make tons of money.” His father was quick to retort, “The frog’s eyes will pop out by the time water runs from the creek!”… Luckily, water began to run before anything happened to the frog’s eyes! Fahrettin Gülener received his first trial order, succeeded, and continued production. Once the last order at that tiny shop exceeded 150 thousand Lira, his fame at the holding grew. He received an invitation one day; he was told that Vehbi Koç would present him an award!.. He had been invited to one of the Thursday meetings Vehbi Koç held at Stad Han with the Holding executives. He found his wedding suit, got ready, and went to the meeting in Istanbul. They seated him next to Vehbi Bey; he was shaking with nervousness. First the speeches were delivered, Vehbi Koç delivered his, then he began talking to Fahrettin Bey, who told him about his own story, his dad, and his work: — What kind of a Vehbi is your father? — A very tough Vehbi… He was trained under German heating engineer Wolf Krueger for three years in Yugoslavia at a place like our village institutes. Everything he does is very German, even his behavior… — But, how are you going to manufacture all this work; this time, your order is quite high. Do you have the machinery? They told me your machines are not enough. — This is how I’ll do it: I will have small turners and dressers to produce the small parts… I’ll distribute it job to the market. — What’s the most important machine in this business? — The milling machine. I already have one. That’s what’s most needed. — Do you want to buy another one?

Fahrettin Gülener and the milling machine he bought with Vehbi Koç’s guidance (opposite page). Gülener displays this machine at his small museum at the entrance of the Ermetal Group of Companies.

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— First I’ll make the money, then I’ll buy it. — Where is your pen and paper? Someone bring me pen and paper… He put the paper and pen in front of me and said, write this: “Timing is the essence of life; even the most correct of late decisions is a wrong decision.” I stared, without understanding a word. — Your life will pass you by, by the time you buy a milling machine. Do you know how to take a loan? — Noooo, my father would kill me. — Why? — He doesn’t even owe a cent to the coffee house. I keep change there and pay them straight. He called İnan Kıraç over, “İnan,” he said, “where can we find this milling machine?” I interjected: — I know where that milling machine is; I look at it every time I come to Istanbul. It’s at Burla Brothers... — İnan, call Burla and have them deliver the milling machine this young man wants. — How am I going to pay for it? — On account of the work you deliver. — Fine… He said one last thing: “Paper and pen… Don’t ever leave home without them, the way you don’t go out without shoes!”

This meeting had an impact of Fahrettin Bey’s entire business career. He put his milling machine in his truck, didn’t even sit in the driver’s seat, he hugged his machine in the back, all the way to Bursa. In the ensuing years, he did a profound amount of work in the automotive industry. Vehbi Koç sent him to Italy for training. He trained for months under Crescendo—a material virtuoso nicknamed Paganini. Years later, he dedicated himself to education as well and more than 60 of the 85 apprentices he trained over 11 years began working in their own supplier industries. The blue work-shirt he never took off since the day he began art school became a part of his persona. This is why Koç Holding’s “Vocational High-School National Issue” project thrilled him. Today, Ermetal Group of Companies is one of the three largest firms in the car body business in Turkey with a sheet metal processing of 70 thousand tons per year. Another manufacturer that began as a molder and gravitated towards the automotive industry through the encouragement of Tofaş is Faik Çelik, currently the Chair of the Board of Directors at Beyçelik Holding. Having received a commission from Tofaş in 1985, a company could not deliver the work in time and came to me for help. The person who later

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came in to supervise my molds gave three-four pieces of work to the purchasing director of Tofaş. So, I first began by manufacturing molds for the Tofaş supplier industry. Molding requires craftsmanship. Masters were hard to find. Once I delivered Tofaş’s work in time and as required, more work was brought to me. So, I expanded my business volume. After a while, I moved from the shop to a factory on the Yalova Road and transitioned into industrialism. I was no longer manufacturing for the Tofaş supplier industry; I was manufacturing my own work. After this period, we expanded our business as Tofaş enlarged its work volume. Our mutual trust was established during these years. Tofaş was one of the leading actors in the creation, growth, and strengthening periods of the automotive supplier industry in Turkey. As Beyçelik Gestamp, we experienced this support first hand. It was the Doblò project period. When one of the Istanbul firms the Italian mold masters outsourced to failed to manufacture the part, there was a possibility of delaying the launch of the Doblò that needed to be on the market in a month or two. My son Baran Çelik, who had just completed his education, and Beyçelik General Manager Engin Meydan headed out to Istanbul together. They went to see the molds posing as Tofaş supervisors, but there were no molds to be seen and they came back empty handed. The only thing to fall back on was years of practice. We manufactured the necessary part in a month and ten days and achieved the impossible. Even the technical drawing of the part could be sketched in two months. I remember very clearly everyone telling us, “You can’t; you won’t be able to make it.” But we proved them wrong. We completed six months’ worth of work in a month and a half and made a significant contribution to the Doblò project. This carried our relationship with Tofaş to an entirely different level of trust.

The desire to do the impossible, a period of creating things from scratch, a time of producing a positive outcome with what’s available… When the injection machines for manufacturing soda crates became obsolete after crate production was halted, Hamdi Sami Gökçen applied to Tofaş in 1972. Approximately in his 80s at the time, Gökçen had thought that Tofaş would be the right place to put the machines to work and knocked on the door to share that thought. He was met by Kaynak Küçükpınar. His answer to Kaynak Bey’s “How can I help you?” was very simple: “I am not asking for anything. I have these possibilities and machines. You manufacture cars here. I am certain they intersect at one point, so let’s do something together.” They did, for years… Born out of need, their collaboration had created a partnership of turning a crisis into an opportunity. Built upon such solid ground, now, their partnership continues with grandson Celal Gökçen. Tofaş holds a very important place for us. We have all learned so much with Tofaş’s push and resilience. At the time, we worked like brothers

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with the Tofaş executives. Even in 1985, when we were looking to hire people, we would always receive the answer “farmhand,” when we asked people about their previous employment. Very few people in Turkey had worked in an industrial setting. It was all new. In the ensuing years, some people said things like “tin car..” perhaps because they did not know what the work entailed. Every country begins to own technology by starting at a certain level. I think the models Koç Holding selected were the ideal choice; appropriate for the times, doable, applicable, but of course it may seem different from the outside; only the people who are in the business can understand that. I was merely 16 and still in high school when my father Mehmet Memduh Gökçen took me on a journey to learn about the production of a plastic grille mold. We traveled to Torino, Italy and Spain. After that, our travels continued. After finishing college in Germany, I first worked with my father at Bemsa. Bemsa was manufacturing mid-sized parts, such as the interior heating group, console, interior panels, etc… Later, upon Tofaş’s bumper demand, BPLAs was founded to manufacture bumpers and I was put in charge of that company.

The transition from a brotherly rapport to a professional relationship took great strides through the leadership of Tofaş in Bursa as small enterprises evolved into professional supplier industrial factories. Seeking answers to how changes could be made to a car or a product and deliberating over these issues together, the factory-supplier engineers are now bringing these developments to life by way of mutual R&D group coordination. Application is evolving into think tanks. The earliest supplier companies were, in Gökçe Bayındır’s words, “like knights”; they fearlessly invested their capital and hard work into the business. They also invested their profits in the work and thus not only expanded their own businesses, but helped others thrive as well. TURKEY MEETS THE BIRD SERIES

Tofaş began to diversify its models in the 1980s. This was such a huge leap that the new models would even be manufactured in the 2000s and always find their buyers. This group was the famous Kuş Serisi or the Bird Series. It was known by that name, but for the Tofaş teams it was the “Murat Family.” The family had four generations: Doğan (Hawk), Şahin (Falcon), Kartal (Eagle), and Serçe (Sparrow)… They were all different versions of the Murat 131 with the addition of unique details and bodywork changes. The first name to spring to mind in speaking of the Bird Series was always Gökçe Bayındır, the same way Temel Atay was identified with the birth of local production. After all, Bayındır was the mastermind behind both the Bird Series and its name.

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We were manufacturing only a single car and that was the 131… Competitors had both station wagons and sedans. We were also behind our competitors in sales. What to do? In my opinion, product is the boss in the automotive business; if your product is popular, you succeed, but your automobile must be well liked. Yes, some things depend on advertising and it’s an indispensable part of it all, dealers are necessary, money is a must, but the right automobile is key. The automobile must meet the wishes, expectations, and taste of its user. So, I did the following: I went to see Bernar Bey and said, “You left us one-legged; we have to diversify this car.” The sales were good for the times because some were even putting their sheep in the back seat in Anatolia… Crowded families were carrying their small children, so there was a high demand for the station wagon. Bernar Bey was a very sensible man. He looked at me and said, “very well.” Nothing could be done unless he said “very well”! So, this is what we did: we would change the 131 and paint it metallic! Some changes modifications would be done to the interior, but first the paint had to change. There was no precedent of metallic paint in Turkey. This would be painted a metallic color and the others not. First, that car had to be admired. Then, there would be another 131; some changes would be made to it as well, but the color wouldn’t be the same as the others. Only small modifications would be made to the interior. And we would also manufacture a station wagon that already existed at Fiat.

The cover of the brochure designed for the Bird Series comprised of Şahin, Doğan, Kartal, and Serçe.

Work began immediately. Gökçe Bayındır also named the cars: he called the metallic car Doğan (Hawk), the other sedan Şahin (Falcon), and the station wagon Kartal (Eagle). The Murat Family had been created. Of course, he first discussed the names with Bernar Bey. “What is this Doğan Şahin, Kartal?” he asked me. “We have to distinguish the three different cars by their names, “I replied. “Fine, but why Kartal?” The original name of the station wagon at Fiat was 131 Panorama… “They can’t pronounce that in Anatolia Bernar Bey. It doesn’t roll off the tongue…” It was indeed difficult to pronounce… Then Bernar Bey himself called it “Panoroma”! That slip of the tongue saved me! When I said, “See, Bernar Bey, even you couldn’t pronounce it,” “Very well, he replied.” Then, he was concerned about Doğan. “Your boss is İnan Kıraç,” he reminded me… I waited for him to finish… “How can you name a car after Erdoğan Gönül?” He was trying to find something to make me surrender, because he still wasn’t convinced until then. Finally, it was all taken care of. We manufactured the series and it was a success; we took the lead in the market…

Thousands of people have memories of the bird series cars. Here are some that have touched us or cared to share their stories with us and reminisce with the recollections of their former users:

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ŞAHİN

The once-upon-a-time days, when the roads of Anatolia were a far cry from what they are today and even the best ones were driven across with much difficulty; and when the sand and dust of the dirt roads were suffered on top of a Şahin and when other Şahins similar to yours, flew all over Anatolia… …a docile family saloon, belonging to the bird series, reticently attentive to its owner, never a pestilence even when troubles occurred… Here it is what a tourism professional who drove across every inch of the Cappadocia region from Göreme to Zelve, from Derinkuyu and Kayseri relates: We are a family of Şahin drivers. We never purchased any other domestic brand. Our first car was a 131. Some many people in the family drove it… Then I had my own family. We bought a Şahin in 1983. Life and work brought me to Cappadocia. We spent years there. When I first got to Cappadocia, they told, me, “This car of yours won’t survive in Anatolia.” Eventually, they all turned to Tofaş. The spare parts were so easy to find… If something were to happen to the car, we wouldn’t worry because it was repaired easily and would be good as new. If you spoke a little bit of its language, it was very easy to communicate with. And it had a great second-hand market. I alone traded six cars.

Starting with an annual production of 20,6222 cars in 1977, the manufacturing of Murat 131 and Şahin ended in 2001, with the last 1389 off the assembly line that year. A mere 4594 were manufactured for the export market between 2002 and 2006. So a total of 593,258 cars were manufactured, including exports.

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Doğan was the fully-equipped, luxury version of Şahin. They had the same body structure but differences were hidden in the details. It was famous for its metallic paint. The body was the same, but it featured a different glove compartment and steering wheel. The bumper was different as well; round, double headlights were replaced by two rectangular, single ones. The ignition was electronic and it had five forward gears. Celal Gökçen cannot forget the Doğan stories: I was living in Germany at the time; I had a Tofaş-A Doğan I had taken with me from Turkey… I drove to Italy with it. I took it to a Fiat service for maintenance. They opened the engine; the mechanic suddenly yelled, mamma mia. What’s wrong I asked. “This engine is 25 years old!” he exclaimed. Yes, but the car is not that old, I replied. “These engines were very strong, very durable. They switched to the new engines here, but nothing ever went wrong with these”, the Italian mechanic told me.

It is evident that Gökçe Bayındır’s marketing strategy based on the idea of “diversification” yielded excellent results. It is important to cater to the different desires of people. Always on the sales side of the business and equipped with years of experience, Riccardo Aliberti, for example, knows very well how the buyer is always sensitive to the slightest of changes: I believe the Doğan 1991 model was about to go on the market; the only modification from the 1990 model was the color of the Tofaş logo. I don’t recall exactly now, but say it was red and the new became blue. The customer would come in and say, “I want the car with the new logo.” You would tell them, “But it’s the same car, there is no change!” “I don’t care, I want the new one” was the response. I attribute this to the fact that Turkish consumers constantly demanded novelties. At that time novelties were based on small modifications made, for example, on the bumper or in the nickel-plating … but the consumers valued them.

The production of Doğan began in 1981 with 881 cars that year and continued until 2001. Between 2002 and 2006, a total of 390,625 cars were manufactured, including exports.

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K ARTAL

Kartal, with its last version, made such a strong attack that, sales of the model already declared “dead,” shot through the roof. The difference introduced was the installation of an LPG tank in the trunk. The modification allowed the loading area to be completely flat when the back seat was reclined, which considerably increased its load capacity. “Let me tell you something,” says Aliberti. “Customers still ask for a Kartal today. Due to its economy, height, and volume…” Identifying his childhood memories with his father’s Kartal, a gentleman from the Black Sea region recalls: “Murat 131 Kartal toils for you at your business and gives you a joy ride during holidays” the ads would run… My father’s beloved Kartal… We are villagers from Trabzon. The plains of the Black Sea knew my father’s Kartal well. She carried me and my siblings, and the whole family out to the plains. When she didn’t have us on her back, she would carry loads; it was so widely used in the village. More importantly, we all learned how to drive with her. We don’t let her carry loads anymore, but we still drive her. Our kids are just like we were; they huddle up together in the back and wave at the passers-by or put their little cushions under their heads and fall asleep or lie down on their backs at night and count the number of street lamps they see…

Also, first manufactured in 1981, Kartal had a total production of 252,349 cars including exports between 2002 and 2006.

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SERÇE

“Anthropomorphism, or assigning human attributes or shapes to objects or describing them with expressions used for humans is an old habit,” writes linguist and novelist Tahsin Yücel in his article entitled, Otomobil ve İnsanbiçimsellik2 (Automobiles and Anthropomorphism)… He conveys countless examples similar to ours. Stories that individualize, iconize cars and make them members of the family…. Only, until a new model comes along, though… Serçe (Sparrow) was one of those cars. Many Serçe owners of those years had given their cars human names. They would refer to the car by its name and talk about it like a member of the family. Serçe had the body of Murat 124. Production resumed in 1983 with 213 cars and it was released on the market with slight modifications. It was the last member of the Bird Series. 1994 marked the final year of its production with 2176 cars. It was completely removed from the assembly line with a total production of 28, 444 cars. In the humorous work titled, ‘Faithfull and rugged soldiers of Koç Holding by lyrics’ Can Kıraç published on December 31, 1992 and signed “Retired Soldier Can Kıraç”, on the executives and employees of Koç Holding, one of the “güfte”s or lyrics was about Gökçe Bayındır and, of course, referred to the chirping of birds:

Gönlümü ihya eden yıllar boyu sensin benim! Tofaş’a güzel kârları bahşeden sensin benim!3

2 Tahsin Yücel, “Otomobil ve insanbiçimselleştirmek”, Cogito. Oto-mobil: Bir Röntgen Denemesi 24 (Fall 2000): 151. 3

“You rejuvenated my heart for years! You endowed Tofaş with the most beautiful of profits!” (T.N.)

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Tofaş would thus crown its 10th year of production with such an important leap and move further ahead. By 1984, production capacity had risen to 35 thousand per year. 15 YE ARS IN PRODUC TION

It had been 15 years since Tofaş turned the ignition on production and the factory’s market share had risen to 52.3%. Sales had risen by 24% compared to the previous year, reaching 84,500 cars per year. In other words, one out of two cars in Turkey, or even slightly more, were Tofaş-made. The factory had manufactured 309,008 automobiles in 15 years, imported 8,036 and generated 25 millions of foreign currency inflow. The 15th anniversary was thus celebrated at the Tofaş Factory on February 12, 1986. Tofaş’ first general manager Giuseppe Guarnero and first factory director Enrico Martinotti arrived in Bursa years later for the celebrations. Koç Holding Board Director Rahmi M. Koç’s speech was a moving summary of the 15 year-long Tofaş story that extended from the early challenges and strides taken in the supplier sectors in the Turkish automotive industry to current achievements:

Two photographs from the 15th anniversary celebrations of Tofaş. The three people on the right in the picture on the left are Bernar Nahum, Erdoğan Karakoyunlu, and Giuseppe Guarnero. İnan Kıraç and Mustafa V. Koç as they listen to speeches in the photograph on the right.

As Koç Group, we have dedicated considerable efforts to the automotive industry of the country and allocated a significant portion of our

investments to this endeavor. To refresh our memories, if we look back in time, we can see that Turkey’s first automobile series, the fiberglass Anadol car was released by Otosan in 1965. More than 60 thousand of these cars were manufactured in various versions. Due to the changing economic conditions of Turkey, Anadol, which made a name for itself in the country’s automotive industry, was taken off the assembly line. Our desire was to build a factory that would manufacture an exclusive car designed with European technology. This dream was realized

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through our collaboration with the Fiat company, which had been our partner for many years. Thus, this factory was established. Once goals are achieved, especially with success, all the troubles and tribulations are easily forgotten. Yet, two of our colleagues who undertook the challenging deliberations with Fiat in the early days are present here today. One is Bernar Nahum and the other is Dr. Calvi. Obtaining permissions from the official departments of state, the selection of the property… The property, which once was a field, had 400 owners. Each one of the plots were purchased from separate owners; the beginning of construction, the acquisition of machines and equipment, the delay of our program by the earthquake disaster for six months… These are still fresh in my memory. Training of skilled workers and line workers, training of suppliers, obtaining work permits for the Italian personnel, building a school for their children, finding a name for the car, and organizing the spread of sales companies, dealers, and service stations across the country were easier said than done. We also had to undertake the psychological aspect of the entire project. Is an automobile a luxury or not? How many factories must be established? What percentage of the vehicles must be locally produced? Should we first build the engine or the body? In short, it is not easy to be the leader in an industry. Leadership always comes with a price. Since the first Murat cars rolled off the assembly line on February 12, 1971, we have manufactured 134,868 124 models we call the first generation and 184,973 131 models of various types, totaling nearly 320 thousand Murat vehicles. The majority of the cars we encounter on the roads today are products of this factory. We imported the first 2000 completely knocked down. Shortly thereafter, we gradually began to localize our components. Dear guests, Today, an automobile is no longer a luxury item. It has become a need, an indispensable need. With the chain effect in economy, automotive industries have transformed into the locomotive industries of nations. Particularly in industrialized countries, if the automotive industry slows down, the entire economy slows down. The oil crisis in the 1970s had a significant impact on the global automotive industry in particular and pushed the entire sector towards a change in philosophy. Institutions with insufficient technology and strength have been liquidated. It has thus become imperative to join forces, either through technology or capital, to remain standing to this day.

Rahmi M. Koç at the 15th anniversary celebrations.

What will become of Tofaş in the future? I am not actively involved in these issues, but if I must venture an estimate, I can predict that Tofaş, which currently has a capacity of 30 to 35 thousand in a single model, must increase this capacity to 100 thousand.

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We are required design a new model for the future. In order to keep up with the free market economy, we must pay attention to costs. We must purchase the most appropriate and cost-efficient parts of the product. All of these add up to millions of liras in investments. In such investments, we must profit above the inflation rate and generate funds. Working in the automotive industry is similar to riding a bicycle; one must constantly pedal forward in order not to stop or fall. The automobile industry still needs utmost protection in the lowered trade walls policies. One must not underestimate automobiles. Tofaş alone paid more than 8 billion TL in taxes. And Tofaş alone provides jobs for nearly 30 thousand people along with its supplier industries. Lacking a floral shop or a charcuterie before the establishment of Tofaş, Bursa has become the center of Turkey’s automotive industry today and has evolved into a metropolis in every aspect. One must always be alert and stay sharp in the automotive industry. The slightest negligence can generate large mistakes and cause deep wounds. I believe all our colleagues are aware of that and work accordingly. I would like to congratulate each and every one of them for bringing us to the present and cherish the memory of those who are no longer with us today. I would thus like to take this opportunity to thank all our Turkish and Italian friends who have diligently worked from the first day onwards. I would also like to extend my appreciation and respects to all of you for accepting our invitation and being with us here today. Rahmi M. Koç

Taking the stage after Rahmi M. Koç, Giuseppe Calvi delivered a speech on behalf of Fiat. After noting that, Tofaş has successfully reached its 15th year and having left difficult days behind, and, outmaneuvered its competitors, and, it helped the automotive industry to move forward, Calvi added that, Turkey is considered very important for Fiat on two aspects. First, Turkey was now the only country in which Fiat cars had a market share of a little over 50%, which was true of the Italian market as well. Therefore, Calvi said, “We feel like we’re in Italy when we look at the parking lot.” The second was the fact that in terms of sales volume, Turkey had secured its place as sixth after Germany, France, Brazil, England, and the Netherlands. Can Kıraç, who spoke after Calvi, delivered a congratulatory speech that reflected the team spirit of Tofaş and explained why he had such high hopes for the future: … Esteemed guests, dear friends, Turkey has entered a period of new dynamics. Competition is getting steeper by the day and the Turkish people expect better service and higher-quality products. Turkish people no longer have any tolerance for products of lower quality. The strides we have taken as Tofaş in the last two years thus constitute the very foundation of our success.

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However, the conditions ahead require us to be more careful and put even higher quality products on the market. You, as our colleagues, are the guarantee of that. If you can succeed in releasing meticulously produced goods, the outcome will reflect the expected level of high quality. Therefore, the faith our Board of Directors has in the future is, as a matter of fact, derived from their trust in you, our workers and technician colleagues. I hope that that our achievements over these past two years will grow even more and, on behalf of the Board of Directors, I implore you to spare no efforts to bring these accomplishments to their utmost level. As I end my speech, I wish the shareholders, representatives, the executive team, engineers, and workers of Tofaş a bright year ahead and give you all my love and respect.

INVESTMENTS, INNOVATIONS

The search for modern technology and scientific methods was always prevalent at Tofaş. The transition to computer-controlled systems had taken place immediately before the 1980s. In 1976-77, while the offices were still in Mecidiyeköy, the company had gone into collaboration with IBM. The follow-ups on the payment bills of cars and managing banking transactions were no longer manually done. Nezih Olcay remembers: Computers were gigantic and worked with punched cards. Those cards ought not to be ever mixed up. The punched card system continued for quite some time.

During those years, “R&D” concept was not overtly expressed at Tofaş, but techniques and innovations that could facilitate production and production methods extending from the manufacturing chain at the shops to the offices were always on the agenda. “Computer-controlled machinery” introduced new dimensions to production. Recruited to Tofaş in 1984 for the acquisition, installation, maintenance, and development of the CNC, PLC systems and subsequently served as the director of Tofaş’s R&D in its early stages, Orhan Alankuş relates that, changes at Tofaş began in late 1984. At the time, Tofaş was hiring larger numbers of new engineers. Plans included the expansion of the mold shop and gradually increasing production from 20 thousand per year to 40 thousand, 70 thousand, and 100 thousand. A new engine line and a transmission production line were planned. All of this meant building new production lines and purchasing new equipment. Building these new lines with modern, computerized numeric machines and putting robots to work when needed were critical points for the future of Tofaş and for creating an

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efficient production infrastructure. When I began working at Tofaş, I had just completed my PhD on computer-controlled machinery design at Imperial College and had two years of experience in London in this field of product development. Through the leadership of our Technical Director Savaş Arıkan, we enjoyed a great teamwork and successfully completed and put into operation all these new investments. It is quite difficult to have new technologies be embraced by an organization and run them productively. Having had the personal experience in designing these technologies greatly helped us, in making the right choices and soling, in the most rapid way, problems arising in production. These lines played a part in rendering efficient the production in Tofaş, in moving [new] production to Tofaş, and in becoming involved in the GM partnership as Tofaş PowerTrain. During what we could call the first expansion stage of reaching 100 thousand cars per year, hundreds of machines were purchased and new lines were constructed. At the time, there was no fax or e-mail, so we were using telex to accelerate communications. We worked around the clock, including weekends. Our General Manager Temel Atay, our Technical Director Savaş Arıkan, and other executives played an important role in keeping us motivated and alert.

Savaş Arıkan truly became one of the unforgettable names of Tofaş. As Orhan Alankuş relates, he was recognized as an executive who believed in teamwork, trained, in his words, many people, ranging from executives to fields workers at Tofaş, and helped towards having the company conceived as an educational institution. His biggest dream since childhood was to build a local car. That is why, as soon as he received his degree in mechanical engineering, he ran to the press shop of Tofaş in 1970 despite all the objections of Bernar Nahum, who thought it would suit him better to work at Tofaş Oto. Savaş Arıkan wanted to be among those who were building cars with their own hands and had no desire to relinquish his dream of building local cars. Over the years he spent at Tofaş, he used all his skills, know-how, and experience on exactly that. Thanks to him and the teams he worked with, the local production drive, which had gained momentum as of the 1980s, moved forward. We helped the supply industry in localization as well, but we made most of the important advances at Tofaş, along with the suppliers. The supply industry grew from within. When I speak of local production, I must add this: We built 51 special machinery at almost one tenth of the cost. They were intended for puncturing, milling, and shaping the manufactured parts. We built a foaming machine, and a Russian-type compressor to increase power. As we did all that, we had Temel Atay’s unlimited support behind us.

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In the summer of 1986, car sales in Turkey had risen enough to make headlines in newspapers. Articles were pointing out that production had been revived, sales were breaking records, and that there was a “summer peak.” Plummeting after 1975, sales were once again on the rise; newspapers were filled with headlines like, “after getting their driving licenses, people are running to showrooms.” Meanwhile, the waiting period for cars had been extended and consecutive increases were made on car prices. Temel Atay summarizes the changes from the early and troublesome 1980s to the booming 1990s as, “We had come a long way”: When I was first appointed to Tofaş in the 1980s, the economy in general and the automotive market in particular were in dire straits across the country. No cars were sold, stocks were piling, dealer payments were missed, only salaries could be paid, due to weak cash flow, and payments to suppliers were delayed. To remedy this situation, we began paying suppliers part in cash and part with cars. Some would drive the cars, whereas others would resell and get the cash. Through this method, we were able to salvage several months of financing without further damage. A few years later, as markets stabilized and Tofaş products were appreciated and preferred, customer queues formed once again—this time due to increased demand. In addition, extra premium free market prices came to fore. During this period, we started getting several requests each day to be put on the priority list, from bureaucratic circles in Ankara, to friends, family, and acquaintances. It became altogether another task to deal with those! In short, we had come a long way!

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The 1990s: innovations in technology, important milestones


“Equipped with navigation control systems, automobiles will select the roads with less traffic congestion, notify drivers of fog or rain, and list pharmacies on duty. Hold tight; next in line is automobiles without drivers!” Jean-Michel Normand “Konuşan, uyandıran, kendi kendine giden araba”, Cogito, Güz Fall, p. 210.


“The automobile

was invented by the Germans. The French used it. The Americans began mass production. The first mass production in automobiles began in 1908 with Henry Ford’s famous T-model Ford and 15 million cars were manufactured in the 19 years that passed until 1927. Why 1927? 1927 is an important year, because it was the year in which I was born!”1 Can Kıraç had begun his speech with these words on the day of Fiat Tempra’s launch by Tofaş in 1990. As usual, his words were filled with wisdom and humor… Having been released early that year in Italy and European markets in 1990, Tempra’s production was now simultaneous at Tofaş in and Italy. The Turkey leg of production began only a few months after the car was introduced in the European markets. This was the first sign of the Turkish market’s increasing importance on a global scale. It was also a very important step for Tofaş, for the 1990s had witnessed important changes and developments in the automobile market from the first year onwards. Both in terms of its design and in terms of its technological improvements, Tempra was Tofaş’s first weapon to fight these changes. Can Kıraç’s comment on competition on the 15th anniversary celebrations was, perhaps, the harbinger of the news of the movement that began with Tempra.

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“Kıraç kardeşlerle oto turu” (Auto tour with the Kıraç brothers), Cumhuriyet, May 19, 1990, 13.

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TEMPR A

One of the most pleasant things that could possibly happen to a car brand is to be embraced by a literary figure… Having declared his eternal love to his Tempra in 2003, author Erhan Bener had professed that he would not give up on her until the day he died. We don’t know if his beloved Tempra was still parked in front of the door when he passed away in 2007, but we do know that many people fell in love with the car and her innovative ways. We purchased our new car in early June. About ten or fifteen days later, we set out to Kuşadası. Despite all my protests, my wife had packed a number of suitcases and a duffle bag to take to our summerhouse. Thinking of our old Şahin, “There is no way all this stuff will fit into the car,” I exclaimed, but Tempra’s large interior and oversized trunk swallowed it all. One of the most pleasant features of the car was her power-assisted steering. Every time I maneuvered back and forth to get out of that parking slot I had barely squeezed my Şahin into, I would have a hard time turning the wheel left and right, becoming drenched in sweat in the process. Yet, with the Tempra, it was a breeze. I had always conceived of the electric window a luxury. What a lifesaver it was! I could open and close my window with the slightest touch as I was driving. It used to be great problem to clean the steamed-up wide windows, yet now, I was able to lower and raise the windows with the little command buttons in my reach and clear up all the steam with the tip of my finger. The central lock system I had dismissed as an unnecessary luxury also came in handy. There was no need to check if all the doors were locked at

The Tempra was one of the critical turning points for Tofaş. Tempra’s digital display dashboard was considered revolutionary for that period.

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every stop. There was also no need to run around the car to open the door of the passenger seat next to me or to reach over from my own seat. Our physiotherapist Behice Hanım had once told me that certain neck and back pains were caused by this polite move to reach over and open the door. I love her. I haven’t driven her much except to go back and forth from the city to the summerhouse, but I feel more comfortable and happier with her than I did in my previous cars. You know how when you say your vows at a wedding, you say, ‘in sickness and in health, Till death do us part?’ Well, that’s the connection I have with my new car. As long as she doesn’t leave me, I have no intention of drifting away from her…. She is my very last love.2

Another small note on the Tempra: in his famous 2010 feature film The American, actor George Clooney’s drives a dark blue Tempra almost throughout the entire movie. It is said that the movie became so popular as much for the Tempra, as it did for Clooney! The production of this car gave the long-awaited impetus to the local industry. Automobile critics also agreed with Fiat’s selection of Tempra for local production.3 As Tofaş’s anticipated move, Tempra was a success and met people’s expectations from its overall line, to engine features and digital display. It pointed to an epic change and was a step towards integrating with the rest of the world. Having worked at Tofaş for 21 years before retiring as the Quality Engineering Director in 2010, A. Engin Algür believes that Tofaş is the lead player in the automotive sector, which is the driving force of industry in Turkey and that Tempra serves as the symbol of the rapid changes observed in the 1990s. Change was so fast that it was quite difficult to simultaneously keep the pace of designing a new model and increasing current production with the improvement and restyling works of existing models. The fuse of change ignited by Tempra could not be extinguished and had to continue. Concepts such as competition, market share, the customer’s voice, and benchmarking began entering our lives as a consequence of the increasing expectation of quality. It had been very hard on us to see our competitors to catch up with our sales rates and exceed them when we were doubly ahead once and served as one of the most important factors that triggered us to move forward. With Tempra, our close collaboration with our Italian partners increased tremendously compared to the past. Furthermore, first serious changes began to occur in the factory layout. Production had first begun as CK4 production type on the side of the present-day body shop’s section facing

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2

Erhan Bener, Arabalarım, Istanbul 2003, 321.

3

Marka Dopingi, Cumhuriyet Dergi, December 16, 1990.

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assembly. We first executed the certification of the operations with the Italians in this section. We had the opportunity to experience many firsts dynamically in this project and to learn and apply them. Perhaps also through the effect of the computers being introduced to Turkey at the time, the designs we once did using t-squares on giant drawing tables necessitated the purchase of a CADAM computer for the directorate of technical services. This incident stirred great excitement among young engineers. First, we queued up to learn how to use them, and then we began making appointments from the person in charge, to actually use them for designing. For its time, the program could be considered the predecessor of current popular design programs such as Solid, Catia, and UG. For us, it was the first highly sensitive design program that replaced the pen and the pencil and without knowing, gave rise to the birth of a new understanding of quality. This sensitivity brought along the applicability of minute tolerances both in design, and in production and quality, which increasingly improved the quality level. Not only design computers, but also office computers were slowly coming into use as well, which initiated the transition from paper to a digital environment.

Former Tofaş team member Burhan Balkır was working as assistant chief of production when Tempra was being manufactured for the first time. He remembers what the new model brought with it and the excitement it generated: We were manufacturing the old generation engines in 1984. The new engine project was initiated in 1989. We began to see the differences and level of productivity between the old engine and the new. Before, each worker would oversee one machine. When the new engine line was set up, one worker was able to oversee 8 to 10 machines. This was, in a sense, the first step towards robotization. A shop, priory, of 80 to 100 workers was able now to run with 20. It was an important step towards productivity. The system allowed the manufactured materials and parts to be made within actual tolerances and the question of productivity attained great importance. With the Tempra, we began to manufacture the first new type of injection engine in Turkey. Two types were in production: 1300 and 1600 cc. We were manufacturing these engines with the machines we called robots. The mechanical shop was the heart of Tofaş at the time. A new shop, new robot lines, and new CNC (Computer Numerical Control) benches had been installed. It was a huge investment.

Okan Baş was the person in charge of putting into operation the new injection engine line, together with the introduction of Tempra. Recounting the beginning of, in a technological sense, a new era in Tofaş, Baş does not forget the thrill of being appointed to such a serious position.

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It was an unforgettable period both for me and for Tofaş—a period of hard work and serious learning. The mechanical shop was completely changed; a high level of automation was introduced to the factory and a serious leap was made in terms of quality, as well. We used to manufacture normal engines. I, too, had been an engineer for a year or two. There was a method-mechanic service in which engineering works were conducted and it was run under the Directorate of Technical Services. The line to be established for the manufacturing of Tempra was a huge facility, with its lines, central cooling systems, CNC benches and was worth nearly 50 million U.S. Dollars. When it was time to buy new machinery for this line, they said to me, “Go ahead, bargain, buy, bring, and set up the system.” It was extremely thrilling for that period. I told Savaş Bey, “I just began working here,” and it looked too heavy a task at first; nevertheless, we got right down to work. Tofaş had this particularity—it always provided its employees plenty of freedom. As an entirely new generation vehicle, manufactured in Turkey, Tempra brought many gains to Tofaş. For a period, Tofaş became the only producer of Tempra in Europe.

Considered as one of the most important milestones in Tofaş history, Tempra received 80.7 billion Turkish Lira in investments for local production in 1991. Investments continued in the ensuing years. By the end of 1992, 60% of Tempra was locally manufactured. Tempra’s production ended in 1998. 112.218 cars were manufactured in total. The production of the Tempras manufactured for Egypt in 1996 ended after 2.496 cars per the conditions of the agreement. WHAT COMES WITH THE COMPETITION

The 1990s witnessed a rise in competition and car imports along with new factories. In 1990, newspapers often ran headlines such as “race of the giants” to highlight the growing competition on the automobile market. Having been founded in 1990 after General Motors entered the Turkish market in 1989, Opel Türkiye Limited Şirketi began production the same year. In 1994, Toyota-Sabancı Otomotiv Sanayi ve Ticaret A.Ş. was inaugurated; the factory had a capacity of 100 thousand cars and was based in Adapazarı. Hyundai Assan went into production in 1997 and Honda initiated production at the factory in Gebze in 1997. The old domestic automobile manufacturers were competing not only against the products of rival automobile factories that were just being established, but also against imported cars that were becoming less expensive once customs and taxes were lowered. The demand boom of 1990 had not been predicted, but as imports blossomed in direct proportion with this boom, it was thought that in the short run, it would not have an impact on domestic producers except to initiate imports. In

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Aerial view of the TofaĹ&#x; factory in the 1990s.


THE FIFTH-YEAR JOURNEY OF TOFAŞ

1990, Tofaş imported the Fiats 126 BIS and Tipo. Nevertheless, domestic producers were not happy with the sales of imported cars in Turkey; they were concerned with the threat of wasting their long-standing efforts to create an industry and increase production. They decided to fight against it. In his statements, İnan Kıraç announced that the increasing prices would not be reflected on the cars. Tofaş completed its planned investments in 1990. A 650-ton mechanic press line was to be used in one of the two pressing sections to be created by completion of the press shop sprawled across an indoor area of 3600 square meters. With this addition, the press shop reached a total area of 12,240 square meters; meanwhile, construction of the production building annex with a shop space of 4320 square meters was completed and the total indoor space reached 7344 square meters. With the addition of new annexes, production warehouses and quality control units now had a larger space, the new benches of the gear shops were installed, additions were made to the paint warehouse and preparation units, maintenance shops were expanded, and an annex was made for the thermal power plant. Meanwhile, the break of the Gulf War also affected car sales. The war ended in February of 1991. As of March, following the end of the war, production numbers began to surge again. TOFAŞ TURNS 20

Tofaş had reached 20 years in production in 1991, On February 12, on the day of its inauguration, the company ran a full-page ad in the newspaper and announced its prices. The ad also contained information about the company. … With the 621 thousand automobiles manufactured to date, Tofaş holds the largest share in the Turkish automobile market. In 1990, Tofaş has also reached the largest production volume and sales rate among the cars manufactured in Turkey (55.33 percent)… In this final period we are going through, Tofaş, along with its supplier industries, has been the only company to give “good news” about prices. Tofaş prices are still maintained at the same level since November 1, 1990.

The ad offered prices for Serçe, Şahin, Kartal, Kartal L, Doğan L, and Tempra SX. The company was truly experiencing significant developments and innovations in its 20th year. The mechanical units manufacturing both engines and transmission boxes had grown much stronger. First a capacity increase investment of 186.2 billion TL was made; the target was to reach a production of 150 thousand cars per year. 392.5 billion TL was invested in new engines. Tempra engine came to be manufactured domestically; another 80.7 billion TL of investment was made for the

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domestication of Tempra. In addition to all that, the engine, of the 131 series was changed with the Tempra engine in order to improve the oil consumption and other performances. For that purpose, works on transforming the horizontal Tempra engine into a longitudinal engine were completed. The same year, CKD (Completely Knocked-Down) export of Doğan and Şahin cars was made to Egypt in collaboration with the Nasr Automobile Factory. Currently serving as the Factory Director of Tofaş, Erdal Şimşek was working as the process engineer in the method unit of the bodywork at the time. He explains the significance of the said export as follows: At the time, Turkey was quite far from the notion of exporting cars. For, exporting meant manufacturing up-to-date cars and the ability to produce goods that could meet the needs of a different culture. It was quite a challenge. And a bit of a dream… We are talking about the 1990s. Temel Atay was the general manager at the time. Every time he visited the factory, we would hear him say, “Export is key, it’s highly critical…” We kept thinking, “We are manufacturing 200 thousand cars. The number of car kits we export to Egypt is 5000. Why is this export necessary?” We were trying so hard to manufacture a few thousand cars per year! The team in Egypt was unable to perform certain tasks, so we were sending employees from here; sometimes I would go and stay for weeks…. The factory was quite far from Cairo, in the middle of the desert. Not to mention the heat… The production of the 131 was no easy feat. For example, the Egyptians were asking for air-conditioning and if the ACs were not properly installed, they would cause problems in 45-degree heat. In short, we were facing serious challenges and wondered why we were doing it in the first place. Meanwhile, Temel Bey was keeping a close watch on the progress. Sometimes, we would go into meetings together. He kept reiterating the same thing: “This export is very important to us. We have to learn it well; this is where the future of Tofaş lies! Soon, the Customs Union will come into play and more than have of the cars to be sold will be imported ones.” Today, 700 thousand of the 1 million cars sold in Turkey are imported. We manufacture 1.5 million cars in Turkey, 1 million is sold, but only 300 thousand of it is domestic. In short, Temel Bey was one hundred percent right.

The export of the Doğan model was ended in 1997 after 16,800 cars were manufactured. 1991 was also marked as the year in which Tofaş embraced different global approaches in terms of production methods. Before adopting concepts such as integrated factory and quality management, the factory first put into operation the Hoshin Kanri method. This

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concept was coined by two words in Japanese: Hoshin, meant direction, whereas Kanri denoted planning. Having assumed different positions in the quality department of Tofaş at the time, Ahmet Altekin explains how the Hoshin Kanri method served as a benchmark on the road that led to total quality management and WCM (World Class Manufacturing): Hoshin Kanri was a participative way of policy management of in terms of organization and work order born out of Japan… It is a policy in which workers support the system with their ideas from the bottom up and the company management supports their work from the top down… We had begun to learn the meaning of Japanese words at the time as well; in this method, if you spread your targets from the top down, you can encourage people to participate in the process from the bottom up through various proposal systems. This way, and also through the Kaizen method, you can see small improvements every day and rapidly ameliorate everything from quality to production in large leaps of improvement. Previously, quality was treated as an externally-controlled operation. During this period, it was addressed as a part of production, a feature created by a different production. All these concepts began to spread across the globe in the 1980s and were introduced to Turkey in the 1990s, but of course it took some time before they were seriously reflected on company organizations. They spear simple on paper, but not so easy to put into operation, as there are cultural obstacles in the way. It requires people to transition into a different mentality. Therefore, transition into an integrated plant alone would have been a large-scale change for us, but in the ensuing years, Tofaş added Kaizen or the proposal collection system CEDAC (CauseEffect-Diagram-Additional-Cards) to the picture and thus invested in the very basis of today’s WCM.

Following improvements on the engine, Doğan and Kartal models equipped with new engines were released on the market as of June 1992. Investments for the domestication of the Tempra in 1991 continued in the ensuing years. By the end of 1992, 60% of the Tempra was locally manufactured. Another related development should also be noted here: In order to meet the huge demands in 1993, Tofaş factory switched to a tripleshift organization. Including weekend and holiday overtime, production reached 200,000 cars per year. This was the highest level of automobile sales in Turkey’s history. Tofaş thus became the first company to reach the maximum number of car sales in the growing automobile market. 1993 was marked by the release of the one-millionth car from the assembly line. The increased demands in 1991-92 and the production volume of 200 thousand per year in 1993 also brought to fore the question of

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capacity increase. Serving as the Production manager at the time, Osman Soyoğul summarizes this endeavor and its aftermath: Tofaş put on the agenda the establishment of a new plant for capacity increase and began looking for the right location. Eskişehir was considered an option. As the young governor of Eskişehir at the time, Ali Fuat Güven was interested in the project. He believed that the property across from the industrial zone at the Ankara exit of Eskişehir would be ideal for the factory and he proposed the idea to the company. A group of executives from Tofaş viewed the property from a helicopter alongside the Governor. Their impressions were favorable. Subsequently, Governor Ali Fuat Güven had the necessary permits issued from the Ministry to have the area be recognized as a new industrial region and for the factory to be established. However, as work was underway, the 1994 economic crisis put a halt to demand and production. Tofaş reverted to double-shifts and work on capacity increase was indefinitely put on hold.

Tipo released in late 1993.

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TIPO

Tipo had assumed its place on the Turkish market as an imported car in 1990. Newspaper ads in 1992; however, announced that the Tipo would be produced at Tofaş as of 1993. A new investment project of 500 million US dollars was in question for the 1.6 S and SX models. The factory’s production capacity would be increased to accommodate Tipo manufacturing. It was believed that Tipo’s wide recognition across the country prior to production would serve as an advantage. It was already the end of 1993 by the time Tipo was advertised as being “Full even when it’s empty.” Tipo was launched as a new, fivedoor Fiat model. It was highly recommended for buyers looking for fuel-efficiency and parking maneuverability. With its high ceiling and spacious seat design, it was a comfortable car. It featured the modern technology of the period including the same central lock system as Tipo SX and SLX, as well as external mirror control mechanism in the interior, hydraulic steering, power front door windows, and airconditioning. 1404 Tipos were manufactured in the first year of its release. After staying on the market for seven years, it was taken off the line in 1999 with a total production of 49,765 cars. A NEW MODEL FOR TEMPR A

The same year, Tempra enthusiasts were in for a surprise: Tempra Station Wagon… Its biggest appeal was the combination of a five-seat sedan comfort with a station wagon convenience. The back seats could be folded down for carrying large loads. Another important detail was that the rear bumper could also be folded down for loading when necessary. Tempra SWs were on the assembly line for six years; the last one was manufactured in 1998 with a total of 4,688 cars.

Left and following pages: Automatization at Tofaş began in the 1990s. The first robot was used in the Scudino project.

THE FIRST ROBOT KOCA YUSUF AND AUTOMATION AT TOFAŞ

Red arms and legs carrying giant metal sheets around like they are pieces of paper…. In an incredible way… there is no weight it can’t hold, no thickness it won’t cut through…. It’s fast, unbelievably fast, like lightning… yet it’s equally confident; it knows exactly when to stop… one does not interfere with job of the other, waiting for the other to finish, almost like two pianists playing the same piano or two ironsmiths forging the same pieces of iron in turns and at the same tempo… it’s so lithe that there are hardly any movements it won’t do; it’s flexible enough to put even the most masterful dancers to shame… some let out small screams, others hiss or sometimes roar… This sense of precision and

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dexterity is respectable, but they are frightfully big, stern, and ruthless… A human being can feel as helpless as a bunny in a lion’s cage amidst the robots that create the unique music and motion of the factory. Like lions, the robots are kept in wire cages. You can’t help but wonder if they would get tired of all this intensive labor one day and try to break out of. After all, the perfectly synchronized motion and the steady diligence in there is not human- but machine-specific. The most important connection they have with humans is that this entire organization is programmed by humans. The first member of this complex and intricate organization in which hundreds of robots work today in various departments of production was the robot named Koca Yusuf. The toil of Tofaş’s first oversized robot began in 1993; the small robot next to it had saluted then-President Süleyman Demirel by saying “thank you” at the inauguration ceremony... By writing it, to be more precise…. Working as the Quality Director of Tofaş today, Sinan Yıldırım describes this first robot purchased three years after he began working at Tofaş in 1990 as

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THE FIFTH-YEAR JOURNEY OF TOFAŞ

being huge. “Koca Yusuf was one of the robots that constitute the main frame of the automobile we call frame link. It was the product of the Italian firm Comau.” The decision to purchase the first robot was a difficult process. Still, it had to be acquired, as it was exigent to try new technologies. A total of three robots had been purchased and they were first used on the bodywork of the Scudino Project the Tofaş team dubbed as the “former Doblò” in 1998. What about workers and robots? When Europe began working with robots about 10 to 15 years prior to that, this seemed like a luxury for Turkey. After all, the hourly costs in Europe and the ones in Turkey were not the same. While the cost was approximately 20 to 25 Euro in Europe, it was as low as 7 to 8 Euro in Turkey. Therefore, Europeans opted for robots. However, in recent years, especially the demands of quality standards became more important. It would be inconceivable for Tofaş, a company that was now manufacturing cars for Europe, to fall behind. In that case, did the number of workers decrease as robots were bought? That is not what the numbers say. Sinan Yıldırım explains the change of ratio: We set out with three robots; today, there are 1100 robots at Tofaş. When I began to work there in 1990, we had a team of 8000-8500 employees and we were able to manufacture a car in approximately 50 hours. Today, let us say we do it in 25 hours, but there are still 10 thousand of us. Of course, the content of the work changes over time; it is more diversified, has a higher quality, and we become engaged in more delicate things that we’ve never thought of before. For example, in 1993, the number of cars we manufactured was 210 thousand with 9 thousand workers. Today, in 2017, we have a production capacity of nearly 450 thousand, but we are still working with 9000-9500 people… The numbers are the same, but our capacity has doubled. Robots are what increase the capacity most.

With 50 years almost behind it, automation at Tofaş parallels the rest of the world. Robots are in action in the press, body, paint, assembly, and suspensions shops. Noting that Tofaş keeps up with innovations in robot technology with the rest of the world, former Industry and Innovation Director Önder Tokçalar explains that work in this field is divided into three sections: conventional robotics, human-robot interaction, perceiving robots, and mobile robotics: We think of robots as pre-programmed equipment, but in the case of Tofaş, it’s more advanced than that; the plant has camera-controlled robots. In other words, they can see with the cameras attached to them and proceed accordingly. This is important in showing the level of robotics in Turkey. The robots must be able to see, hear, feel and adapt to the flexibility of a production regime. We determine our own automation strategy accordingly. The global concept of this in the world is industry 4.0… In speaking of robots, we must also understand the robotic systems. There

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are, for example, automatic storage and unloading systems that provide serious space gain. These are the areas in which assembly materials are stored next to the lines; they are automatically stored with robotic systems and feed the line. We are talking about 8 to 10 meters-high storage areas that operate robotically. Depending on the needs of the vehicle on the belt, certain systems self actuate robotically and pick up the box from a designated point and bring it to the place where the operator will be. In that regard, this is one of the first projects of its kind in Turkey.

The level of automatization at Tofaş today: robots and humans work together. Cobots, or “collaborative robots” are used at the suspension workshop of Tofaş.

Robots are used for hauling, welding, and sealing operations. In addition to that, there is the AGV (automatic guided vehicle), which we consider the initial stage of mobile robotics. The design of the first AGVs was executed at Tofaş. Later on, we also collaborated with other firms in our ecosystem. We continue to work to advance this.

There is no doubt that the dimensions and working rhythms of the isolated robots startle people, but science and technology is constantly advancing and new innovations are made one after another in order to help humans and robots work side by side on the field. Cobots, or “collaborative robots” are already at work on the field! Today, field personnel of Tofaş’s suspension shop collaborate harmoniously with a cobot…. According to Önder Tokçalar’s description, cobots are robots that interact with people:

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What we understand from robots is isolated equipment surrounded by cages. However, in our current design, robots and humans are not isolated, but work in a secured environment together. What are the advantages of this? While humans undertake tasks that require flexibility and talent, robots will perform the routine movements that demand ergonometry. They will work in collaboration and not separately. That is the future of robotics!

In this context, we shall divert our attention to another EU project that involved Tofaş: Successfully led by the R&D unit of Tofaş in 2013, the robo-partner project (Seamless Human-Robot Cooperation for Intelligent, Flexible and Safe Operations in the Assembly Factories of the Future) was the first EU Seventh Framework Programme to be coordinated by a firm in Turkey in the field of production technologies. The first meeting of the project was held at the Tofaş factory in Bursa on November 19-20, 2013. Initiated through the collaboration of 14 agencies and institutions from eight different countries, the project coordination meeting included Tofaş executives, as well as European Union commission members, a TÜBİTAK representative, and executives of the project partner firms. The project was to continue for 42 months through the collaboration of universities, robot and equipment manufacturers, software and system developer agencies and institutions. Project partners were Tofaş, Comau, Pilz, LMS, F-IPK, CRF, Uninova, Tekniker, Fobosoft, Jatorman, Grobo, Intrasoft, Alconza, and Electrolux. The number of EU Research Projects (FP7 and EUREKA) Tofaş R&D participated in reached 12 by 2013 and as part of these project, the department had the opportunity to work with more than 80 international project partners. There are years before this project transitions into industrialization. Sinan Yıldırım’s predictions are as follows: Now, camera firms are working on the camera; work safety firms are concentrating on safety equipment; robot firms are striving to make the robots more sensitive and softer, as the movements of robots are very sharp. Moreover, everyone is working towards controlling their inertia. You will, indeed, soon see them even at home; for example, you will call out and say, bring me a glass, help me clean up the table. You will pick up the plates, and the robot will pick up the tablecloth… That’s where the world is headed right now. We will have robots working with laborers. For now, all our robots are isolated, as it is quite risky in terms of work safety to be near them; they are very fast and you can’t enter their territory. The moment you do, they stop very abruptly. All work safety measures have been taken. According to the new trend, all the cages and barriers will be thrown out! But they will be equipped with so many cameras that they will, at all times, know where you are and look out for you. Even if you wanted to, they won’t be able to hurt you. We are currently working on joint projects with the European Union in that respect.

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Let us return to the 1990s for now. As we do, let us underline, at every opportunity, that the increase and advancement of technical competence at Tofaş and its current state is the product of the collaboration of foresighted executives and dedicated Tofaş engineers and teams. Erdal Şimşek recalls: During the 1990s, Tofaş’s competence was limited. Our R&D –which did not exist at the time- and engineering capabilities were limited. We would make changes to the products in collaboration with the technical departments of Fiat. At the time, we were trying to raise the factory’s production capacity from 50 thousand to 100 or 200 thousand. Also during the same period, the production of more up-to-date models such as the Tempra, Tipo, and Uno were underway and serious changes were being made to the 131 series. During this period, Temel Bey argued that in addition to machine installment investments, the company also had to invest in human resources and pursued a policy of increasing the technical staff at Tofaş. Despite the challenges, he would both encourage us and stand behind us. The core of our current R&D and technology units was created during that period. Appointed to Tofaş as the general manager in 1994, Jan Nahum later became the first CEO of the company.

CHALLENGES AND ACHIEVEMENTS GO TOGETHER

1994 began with an important change at Tofaş. General Manager Temel Atay had been appointed to a position in Koç Holding and was leaving Tofaş. Jan Nahum replaced him as General Manager. Nahum had begun his career as a Project Engineer at Otosan in 1973. As of 1975, he had worked as department design head and coordinator at the R&D Center of Koç Holding over nine years. In 1984, he was transferred to Otokar, where he served as general manager for ten years and had spearheaded Otokar’s involvement in the defense industry with the production of Land Rovers and armored vehicles. As one of the unforgettable directors of Tofaş, he was remembered for showing up at the factory at 5:00 AM, touring the belts one by one, picking up a cloth stuck between the tracks and the papers on the floor, and setting them down before the workers that began their shift at 8:00 AM. The factory had to be keen and active, as far as he was concerned. Jan Nahum took over the position at a highly tumultuous period in Turkey: he was now head of a company on the verge of a serious economic crisis and facing the new norms of the Customs Union in an environment where consumers obsessed with change were gravitating towards imported cars, brining Tofaş’s market share from 68 to 20 percent. 1994 began with an economic crisis. As of 1989, through agreements made with the IMF, everyone was allowed to bring money in and out of the country. Offering high interest rates, banks succeeded in pulling capital to Turkey. However, it was short-term capital, not intended for investment. Suddenly, foreign currency was plenty in the country, the Turkish Lira gained value, and there was a boom of imported

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goods. Exports were sufficient. As the country had transitioned from an introverted world into financial globalization, crises elsewhere in the world were also affecting the economy. Indeed, the crises in Russia and the Far East affected Turkey as well. On the other hand, there was considerable public deficit. Consequently, the exchange rate of the U.S. Dollar began to move in January, surging from 15 thousand Lira to 40 thousand in April, in a matter of three months. The Turkish Lira depreciated by 163%. People who bought Tofaş shares at the time suffered considerable losses; therefore, Goldman Sachs employees involved in privatization were fired for not having predicted this decline. April 5th decisions of the Tansu Çiller-Murat Karayalçın government culminated in a serious economic austerity policy. Many businesses with foreign exchange loans went under and half a millionpeople lost their jobs. Inflation rates reached triple digits. Due to the shortage of demand following the crisis, large companies were forced to put compulsory leave into operation. This continued after the April 5th decisions. The automotive sector was the first one to halt production due to the recession. Tofaş put employees on compulsory leave first in March and then in May. Compulsory leave was extended to 36 days due to the stagnancy of the market. Tofaş production of 15 thousand in January was down to 5 thousand in May. The nearly 30% decline of production and the deepening of the crises brought to fore the question of laying off workers. Furthermore, news were circulating that this number would reach ten thousand in the main factories and suppliers of the automotive industry. Finally, with a statement given on June 1st, Tofaş announced that it was laying off 2404 workers. Giving an exclusive interview to Milliyet newspaper on June 4th, Koç Holding CEO İnan Kıraç stated that “It was a very critical event for Tofaş to be forced to lay off workers” and explained the reasons behind this difficult decision as follows:4 Our current normal capacity is 20 thousand in three shifts. We did 5 thousand less in January 12 thousand in February, 10 thousand in March, 8 thousand in April, and 15 thousand in May. Therefore, not only did we pass over one to shift, but we couldn’t run the other two shifts for two months in the past five months. Despite that, we still have 18 thousand vehicles in stock. We might as well shut Tofaş down until the end of the year.

In the period following the days of the crisis, the Tofaş factory made another decision to implement a second compulsory leave that would extend from late June until September. Meanwhile; however, through the pressures of the automotive industry, the decrease that would bring the additional vehicle buying and selling tax from 12 to 6 percent helped sales rise. With a positive response to Tofaş’s campaign “Tofaş maintains June prices in July and pays for your entire vehicle purchase tax,” the entire stock was depleted. Based on this development, 4

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the compulsory leave decision was changed and employees were called backed to work on July 11th. Despite these challenges, the critical steps taken under Turkey’s conditions would carry Tofaş into the 2000s, exports would gain considerable importance, and the bold moves to turn Tofaş into one of the innovative giants of Turkey’s industry would be initiated during this period. Among these steps was the establishment of Research and Development, or R&D as it commonly known.

The first R&D work at Tofaş began in 1994 with a limited number of engineers working inside containers set in an empty warehouse of the factory. In time, R&D gave much impetus to Tofaş and facilitated the repeated use of know-how. This page and following pages: the R&D labs in the 1990s.

R&D BEGINS AT TOFAŞ

Our knowledge expands at the rate of our dreams and imagination and our dreams and imagination grow at the rate of our knowledge. Sometimes we think we are dreaming of the impossible, only to realize others have already thought of it and brought it to life! We must, therefore, believe that countless ideas we think are inconceivable will somebody come alive through research and development. Much like they did in the past… The mind knows no boundaries. Let us, for example, have someone, who spends at least two hours at the wheel in a battle of nerves in the morning traffic of Istanbul dream the impossible: “I will let go of the wheel, sit in the back seat, read my book, make my phone calls. The car knows where to go. I will take care of all my office work from my seat, set the air conditioning and the coffee machine…” What peace, what pleasure… Still, our dream may be futile; we know autonomous cars exist today, but since they have not yet matured, we think we may not be able to see them in the short run. We do know; however, that they will become real one day through advancements in technology. Good engineers dream well. Then, they work to make their dreams come true. They chase perfection…

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From a distance, R&D can be perceived as an endeavor that sucks up millions of Dollars, but goes a very short distance at best. There is no guarantee that the money invested in it will return the investment. In that respect, the “R” of R&D must be more long-term than the “D” and should be managed successfully, with a deeper vision. We must have faith that this “very short distance” is the foundation of everything else. Therefore, two similar incidents that occurred 40 years apart at Tofaş should be recalled here perhaps to demonstrate how important technological advancement and systematic work on that advancement is critical. The first one of these took place in the 1970s. At the time, the state was taxing cars based on their weight. Tofaş’s Şahin weighed 950 kg. Yet, the competition’s front-wheel drive car was a little less than 900 kg, which put it in a lower tax bracket; Tofaş had to reflect the difference of tax on the price and, by extension, on the customer… What to do? Gökçe Bayındır’s quick thinking came into play: There was only one solution: to make the car lighter? Could we take 50 kg off? “We can’t, there is no way, 50 kg is a huge difference in weight,” said our colleagues at the factory, but we still began to work with good intentions. We went inside the car and saw that there is an extra iron piece inside the rear bumper, which was completely unnecessary. The taillights were attached to it. Technically, you could mount the taillights on the bumper without using that iron piece. So, we took it out. How many grams was that? Let’s say 300… The engineers at the factory continued to work on the car; that piece paved the way. Still, there was a problem: we couldn’t apply the changes without Fiat’s permission or consent. We asked them and of course, they refused. “That’s your job,” I said to my colleagues, “Get the permission and tell them why you’re asking for it.” Finally, Fiat was able to relate to our predicament, as it was evident as day! You see there is an obsolete part there and it has a cost, small or big… We kept going at it, something here, something there. If you really get into it and start going through the car, you really find some superfluous things.

Through this operation, the target was reached and the car weighed less. Research is still underway at Tofaş to manufacture lighter cars but the logic, target, and methods to achieve it are completely different. With R&D in play, the attempts to manufacture lighter cars begin in the design stage. İbrahim Korkmaz, who began working at Tofaş with the implementation of R&D as one of the first three engineers of the department and currently working at the advanced studies department of R&D, explains Tofaş’s current approach and the point it has reached and offers comparisons: If you lighten a vehicle by approximately 100 kilos, you have a chance of lowering carbon dioxide levels. Therefore, making a car lighter is important in that respect. The earlier objective was different; we were thinking of making a part optional or adding it later. However, the

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current process of lightening we are working on at Tofaş is different; there is a completely different logic in designing the car that way. In that respect, we also observed that the lighter your car, the less energy you consume. This means less fuel consumption for the customer, which, by extension, means less environmental pollution. By using advanced engineering know-how, we realized that we could not only make the cars lighter, but lower its price as well, and, as Tofaş we focus in this directions. We used to calculate everything manually, but today, computers working at extreme speed have come into play. Therefore, methods of engineering optimization have become incredibly sensitive. This way, you can factor in the actual load without any excess. Today, we develop engineering to lighten the car. The days of “shall we add this and take this out?” are over. Engineering works its magic. Another lightening method we could not have conceived of in those days but consider as an option today, for example, is decreasing the welding points in the car. Do we really need to use so much welding? Is there any other way to connect the parts? Would we use less material if we were to do that using laser-beam welding technology?

Following up on innovations, experimenting, investing, and transforming investments quickly into production… The first R&D works at Tofaş were initiated in 1994 although there was no formal decision made between the partners. It all began with eight people inside containers set up within the factory... Jan Nahum was convinced that initiating these works structurally and systematically within a single center would give considerable momentum to Tofaş and would not only accelerate the accumulation of know-how, but could ensure that this know-how be used repeatedly. His own words describe the thrill of this endeavor and why a quick push was needed: We needed to swiftly resolve the technical, technological, and quality problems of the cars and make advancements. The cars were designed for Brazil, as Brazil was their most important international market. We, on the other hand, were part of the European market. Different market, different consumer expectations, different needs… We had no way of competing with these automobiles. Therefore, we needed a fresh approach, in other words, we had to develop our own R&D, our “capabilities,” and have a say over the design of the cars. Without that capability, we could not have a say, so we were forced to develop it on our own. No one asked me to make this move. However, while there was no mutual decision between the partners, we had to do something. With Orhan Alankuş’s ream, we determined which machinery and tests we would need, and we made the purchases. The preparations were made in Ankara. Meanwhile, we were making room in the factory and creating space by decreasing some of the old materials, as we had mountains of new ones. During that process, a warehouse was vacated and was painted

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to be converted into an R&D unit. The containers arrived in August and were moved into the warehouse. Tofaş was the flagship of Koç and the largest automotive company of Turkey. It had to engage in doing R&D.

As the first director of the Tofaş R&D, Orhan Alankuş describes the birth of the need for R&D, its early stages, and the excitement it stirred within the company. As production numbers increase, efficiency and plain production comes to fore. This pushes Tofaş and its employees in search of constant improvement and perfection towards new horizons. With a translation from a book in English, perhaps the first Total Productive Maintenance (TPM) project in Turkey was initiated at the Tofaş Mechanic Shop. With the coordination of the Method Unit, and the participation of production, quality, and maintenance units, an exemplary teamwork encompassing all directorates was created at Tofaş, which was an important case in terms of demonstrating how the bottom-up improvement efforts could be achieved. Later, a Lean Management team set up through the vision of Jan Nahum and Koç Holding executives and collaborations with Fiat in that area constituted another important phase. At the end of this work, organization and production were restructured in line with the principles of lean production and management. In the process, it was decided that R&D and Production Technologies would be directly under the Factory Manager considering their importance for the future of the company. In the subsequent stages, it was directly affiliated with the CEO. This change reveals the importance Tofaş gave to technology and R&D and then-CEO Jan Nahum played a critical part in that. In the strategy workshops held within Tofaş, ideas and demands to create an R&D unit were mentioned, but it was deemed unlikely to happen. When the ideas came to fruition, this caused considerable excitement among the Tofaş team members. R&D was truly born out of need. There were demands to make design changes particularly to the 131 models we manufactured as CKD for Egypt. We also received some complaints about the swing arm of the Tempra due to the different road conditions of Turkey. There was no possibility of receiving specific design for Turkey’s road conditions. With R&D engineer Ali Soylu in the lead, our team designed a new swing arm and produced prototypes. When the prototypes were tested, they demonstrated a significantly longer lifespan. At the same time, this new design allowed to only change the steering knuckle when problems arose, which lowered the cost of maintenance. We reported our new design to Fiat. They told us that the Brazilian R&D team of hundreds of employees were working on a similar design and sent us a prototype. Our tests proved that these prototypes had even a lower lifespan than the existing ones. This was quite a huge success for our R&D team. Fiat also came to realize that it would be beneficial to establish an R&D unit in Turkey as well.

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Truly enough, the process of localization of production was prolonged due to the part testing conducted at Fiat. Therefore, in order to rapidly serve both the local market and our export markets, find the root cause of our problems, and accelerate the domestication process, we expressed our need for a test center and established the most advanced automotive test center of Turkey. The center allowed for the tests of suspension, body and related parts in accordance with automotive standards. The first emission laboratory of Turkey was established. The lab was able to test emission in cars on a par with European standards and receive accreditation. All of these were accomplished with a core staff of 20 working on production and production technologies.

When it was fist established, the center had very few of engineers and technicians. The main part of the know-how was not at R&D, but at different parts of production such as quality and production engineers. Therefore, this early establishment can be conceived as a target set out to move towards the idea of R&D and to make the entire system more structured and systematic. Engin Algür was one of the first engineers of R&D: While R&D sounded nice, it was hardly known in Turkey at the time. Factories with R&D units were less than a dozen. Among these, the most important was Koç Holding’s household appliance factory Arçelik in Çayırova. Therefore, it was difficult to recruit trained R&D personnel. Under the circumstances, Tofaş turned to its on resources and selected 20 individuals, most of which were from the method department, and established its first R&D unit under the direction of Orhan Alankuş. Our first location was an office on the upper floor of the current body directorate. As no one from the core team knew what to do, I can say the early days were quite a challenge. The real challenge was the absence of a decent laboratory, machinery, or more generally speaking, any infrastructure. In other words, we began everything from scratch.

R&D improved its competence over time and slowly became the center of the know-how, product, and product-related units in the company. Ahmet Altekin comments on this approach: After a certain point, if you reach the sufficient size, your growth significantly accelerates. The growth of R&D at Tofaş moved slowly up to a certain point, whereupon it reached a size that allowed the unit to create its own road map. The establishment of R&D, of course, owed much to Jan Nahum and his ability to see the need. In addition, Koç Holding had brought to life the first central R&D work in the previous years. We know that both as a product and in other fields, work on the Anadol model was conducted there. Since Jan Bey had previously worked there, he already had a central, systematic R&D concept in his mind. Tofaş provided the need and the infrastructure for it and the combination of the two gave rise to the R&D unit. It was almost a fait accompli in the sense that over a

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The old R&D buildings of TofaĹ&#x;.

summer holiday the containers were put together, arranged in a building layout of to facilitate working and when everyone returned from the summer holiday, there was already an R&D center at TofaĹ&#x;! Our colleagues worked in that area for quite some time. We were also managing the product development both in and outside of R&D in parallel with each other. If there was a product project in question, a project manager and the people from R&D, product management, production, and purchasing would be brought together to create a serious project team and that team was being managed. The project director could come from any one of the divisions of the company.

The first set of works conducted, entailed support for production. Previously, when a quality problem arouses, the first thing to do was

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to control if it was done right, “as depicted in the blue print.” If so, then it was thought that there must have been a problem in the project design phase and that R&D was the right address for it. While all these evaluations were completed either at the engineering section of production or in quality laboratories, in time, they shifted towards R&D, especially if it entailed compliance with the completed blue print or regulations in particular. In other words, R&D gradually became the place for solving problems occurring during production or in the aftersales stage and also performed periodic updates. Developments at R&D continued in 1995, the year in which the unit was officially registered in the records. The first areas of concentration included engine and emission, vibration, acoustics, suspension, safety, and fatigue; equipment of one of the most advanced technologies in the world was purchased with an investment of 8 million U.S. Dollars. To put it simply, the amount spent on R&D at Tofaş today as an average of the last decade, amount to three percent of the turnover. In other worlds, 3 Lira of any 100 Lira turnover is allocated to R&D. We can think of it as follows: Turkey’s goal was to reach 3% in 2023. With 15 years to go, the country is still lingering around one percent. Meanwhile, the top countries in the world are at five to seven percent. In the last three years, Tofaş has been on the top of the list from Turkey on the European R&D investment list. A few more numbers on R&D: Over the last three years, Tofaş has been the first Turkish company to make it to the top one thousand among highest R&D spending. When we review the last five years, we see that Tofaş is always present among the first 1500 companies. Therefore, Tofaş is one of the top three companies in Turkey that allocate a serious budget to R&D and has taken first place in the last three years! That being said, let’s review how R&D functions at Tofaş today and where it stands in terms of its connection with Fiat and its integration with the rest of the world. To explain all this, we can cite an example that demonstrates the interrelatedness of function: You can define the change on a certain part, but you must be able to assure that it simultaneously complies with all other parts of the vehicle and you should foresee the needs in different areas and compensate for them in advance. In other words, it requires an increasingly more profound knowledge of product design and engineering. Imagine that these common parts are also used in models you don’t manufacture and that oftentimes, their manufactures are one and the same. This means, the changes you make not only affect only one part or the car you manufacture, but parts of cars you don’t manufacture and their manufacturers. So, it has that ripple effect of engineering design on a global scale. Hence, Tofaş’s R&D began to assume not only its own products, but the management of these changes as well. This; however, should not lead to a misunderstanding. For, if you modify even one bolt, one single hole, that begins to affect the other

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products Fiat manufactures. Therefore, as of this minute, you begin to manage this modification globally, on behalf of the engineering department of FCA. A modification management in this sense means you are now managing some the engineering areas here in Turkey on behalf of FCA. If this is not managed well, you can encounter completely unexpected mistakes, production may be halted, and various problems with customers may arise. Tofaş’s R&D experienced the next phase: it was the management of modification on a single piece, but the management of modification on an entire model across the world. That came with the Doblò. Nowadays, if there are any modifications affecting Doblò, the entire responsibility –in other words, approval of the concept, realization, designing and validating the design– falls upon the shoulders of Tofaş. This brought the following: to slowly become the global unit in charge of a model on behalf of a brand! The success and competence Tofaş attained may eventually create the opportunity to assume the same role on a global scale for other new models as well. FCA manages global markets organized in four regional responsibility areas: One group for Europe and North Africa, two groups for North and South America, and one group for Asia-Pacific. Tofaş is FCA’s second largest R&D center in Europe and North Africa. The first? It’s in Torino. Therefore, the one in Turkey is has a significant weight. All of this lends more meaning to the Tofaş R&D unit. What about suppliers? Can it be said that growth and development continues with them? We know that supply industry evolved gradually. Production was organized there first; then came the performance of components, production, and quality, giving way to the emergence of a research and development structure within that system. There is no doubt that the supply chain had to be part of this structure, for industry could not evolve further otherwise. This was the story of the integration and growth of industrialization and quality. Another important point is that R&D has its own ecosystem. When that ecosystem does not evolve, R&D remains stagnant. No matter how much you invest in it, if the right engineering companies are not involved and testing opportunities are not created, a single company can make it grow only to a certain extent. At this point, Turkey seems to be in a bind in certain areas. Some additional work needs to be able to make a serious leap in that respect. R&D serves as a lever for Tofaş’s competitive power and an asset alongside its production capability, and not as a low cost engineering supply house… In other words, if the product is developed faster, with better quality, lower costs, and better safety, then Tofaş has a place in this competition. In that respect, the basis of Tofaş’s long-term competitiveness lies in production technologies and the R&D power in its products.

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UNO

As the imported vehicle competition continued in full throttle in the automotive industry, Tofaş had joined the competition with the two models of Uno, namely 60 S and 70 SX in 191. The production of the locally manufactured Uno, on the other hand, began in November of 1993. Turkish consumers were introduced to the locally produced Uno in November 1994. As the first small car of Turkey, the Uno brought a breath of fresh air to the automotive sector. The promotion of the Uno S to be launched in December was made at Motor-Show 94. Charming and compact, Uno was much admired by Turkish customers. It was the first locally manufactured car of the B segment, or small cars. It also became the leader of the segment that now holds an important share in the market. Prior to Uno, Turkey was not familiar with the B segment-cars that were small or had single or double volumes. Uno was the first popular car in which the seat and the trunk were comprised of a single volume; it also had unibody. Before the Tipo came along, Uno was one of Fiat’s most revolutionary and successful models in global markets. For many years, it was sold in large quantities almost everywhere in the world. Tofaş brought Uno to the Turkish market as assemblage; the production did not last very long It was on the belt between 1994 and 2000 and a total of 59,413 cars were manufactured.

Uno: The first locally manufactured car in the B segment of small cars and its front grille.

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THE FIRST MASSIVE ORG ANIZ ATIONAL CHANGE: THE INTEGR ATED FAC TORY

One of the important innovations 1995 brought to Tofaş concerned work organization and administration, which introduced the notion of the integrated factory. As an engineer, Ahmet Altekin talks about the importance of The Machine that Changed the World and its ripple effects: In the 1980s, a book titled, The Machine that Changed the World was published. The book revealed the different place the Japanese production, particularly the production system at Toyota held compared to all other industrial production in the world with respect to quality and cost. Back in those years, when Japanese production entered the U.S. market, America faced a great shock because the products had a higher quality and were far less expensive. People could not understand how this was possible for a long time and began studying the production systems in Japan in place. Before long, the books were published. At first, Western executives and even academics claimed that the systems in Japan could only be applied to the people in the Far East and that they would not succeed in Western countries. Finally, especially after the release of The Machine that Changed the World, they conceded that it was indeed a universal approach and that companies that would not embrace this method would eventually go under. Truly enough, the book conveyed significant information on how the system worked. Subsequently, the entire sector began to put into action the new concepts they learned. One of the reflections of this system on Fiat was the notion of an integrated factory: the integrated factory divided production in a certain field into teams from A to Z. This division into responsible teams foresaw an organizational structure in which all individuals needed for production worked as a team within the organization. This was distinct from the traditional hierarchy, as it offered different skills and introduced important flexibilities. This also entailed a large-scale change in organization and business management. In parallel, proposal systems, improvement systems, and many concepts we disregard as ordinary today were all revolutionary for the automotive world of the time. While it seems normal for employees to propose something about product quality and the company to take this seriously, that was not possible at the time and therefore this entire notion was a novel idea. Hence, transition into the integrated factory was groundbreaking with respect of organization and business management. It may have not been as effective at the time if things stayed the way they were, but in the ensuing years, a number of similar initiatives were taken at Tofaş and later, this concept arrived in Turkey under the collective name Total Quality.

Having observed how the rapid change in global production methods of the 1990s were reflected on Tofaş, Engin Algür summarizes the transition to the integrated factory as follows:

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The establishment of a lean production at body, assembly, and press simultaneously in other production bases of Fiat as they did in Turkey culminated in the transition to the integrated factory model known as fabbrica entegrata. This was a massive structural change and Fiat put this change into operation at all its factories across the world, including Italy. This revolutionary change was the biggest and most wide-ranging leap Tofaş made to catch up with the winds of change across the world. The Integrated Factory model entailed the creation of Basic Production Teams; in essence, the factory was divided into many small factories such that assembly became an entire factory, body, and pressing became separate centers of cost. Hence, for example, the assembly factory included its own subunits in addition to production, such as its own maintenance, engineering services, etc., and stepped out of the classic hierarchy. In other words, each production unit encompassed all the subunits it would need.

At this point, we must mention kaizen, an important method related to the integrated factory concept and quality. This method was brought to fore at Tofaş and in 1997, a study was done. Coined by the Japanese words kai: change and zen: better, the term was intended for the amelioration of the production process; it gives weight to teamwork as it values humans. The process may be slow, but the small yet effective changes aim to constantly improve the vehicles in production, time, and cost. This kaizen exercise was one of the innovations at Tofaş under the direction of Jan Nahum. The first steps towards the much-needed change of blood for Turkey to rapidly adapt to the global production standards were being taken at Tofaş. Nahum stresses that there are always challenges to be endured each time a “first” is undertaken, but that the success attained with the implementation of the concept of quality is priceless. “As Turkey entered the Customs Union, we brought in tens of Japanese and did Kaizen in order be a step ahead in international competition; we brought in Americans and implemented Kaizen and TPM5. In other words, we installed the notion of constantly ameliorating and developing the DNA of Tofaş employees. It took us a decade to accomplish that; it was not easy. We worked for ten years, but finally, it was made part of their DNA.” What about the first kaizen exercise at Tofaş? “We were not born with kaizen,” says Jan Nahum and elaborates:

Kaizen works with Jan Nahum at Tofaş. January 16, 1997.

We are just beginning to learn about kaizen at the time. We went ahead and found an American company called Sharma run by an Indian. We took the kaizen know-how from him. We were going to do our first kaizen. We were deciding on where we wanted to do it and to pick a

5

TPM: Total Productive Maintenance.

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place. We chose the one place that gave use the worst headache: the area where the Şahin doors were manufactured… It needed significant improvement. Let’s do the first kaizen here, we have the highest chance of improvement here we thought. We picked the place and they obliged. This is how you perform kaizen: You give training on the first day. On the second day, the blue- and white-collar workers you trained the day before focus on the problem and seek solutions. On the third day, they produce the solution and finish the job. On the fourth day, they apply the solution. On the fifth day, they observe to see if what they planned on the second day has really been accomplished. Kaizen needs to be completed in five days. We chose the location in all our ignorance; trained the workers collected all the data on the second day, and solutions were produced on the third day. Well… The next day, we were doing the planning to apply the changes. We called the maintenance team and said, “so, this is how it’s going to be here, and will be modified as such there…” It was 3 PM or so and we told them to work for two ours and tell us how to do it. They went back and forth… This is how will do it… That’s what will change…. There were 20 machines to modify. All the air conditioning and water lines would change. What about time? “Don’t worry”, they said. “We can do it in 45 days!” Are you kidding me, what 45 days? This has to be done by tomorrow evening. Go, work some more!” They went back and forth… “Fine, we won’t do that, but do this instead and we will finish it –not that it’s possible- in 15 days.” “No,” I said. “It has to be done. Tomorrow. That’s the objective, there no other way out. We picked the wrong place, I agree. It could have been a simpler place to start with, but there’s nothing else to do. This has to change tomorrow.” It was 6 PM. We could see from the meeting room; all the workers were slowly coming out and getting ready to leave. “Sir, can I talk to you?” said the man who was talking to us earlier. “Everyone is leaving. Who am I going to plan this with, what will I do? If I ask them to stay, how will I send them home at 3 or 4 in the morning?” I said to him, “Don’t worry. I’m your driver. I will drive everyone home one by one. I will take whoever needs to leave in the morning.” He paused for a moment, “Fine,” he said. “We will finish this by tomorrow.” And they did!

Ahmet Altekin was one of the first ones to experience Tofaş’s first kaizen process: This flow was very foreign to our culture. First of all, it gave the authority to “do” it to the worker. Normally, if a wall needs to be taken down, for example, it is brought to all the hierarchical levels at the factory and goes back and forth… A wall is never taken down just because an employee says it should be. This, on the other hand, allows two technicians to decide to tear down that wall and accommodates the consequences. Of course it did not succeed in a year or two, but at

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the point we are today, Tofaş has evolved into a company that brings up more suggestions than any others in the Fiat world by a long stretch. Two years ago, we realized that the number of suggestions was excessive and that the quality was not as good as we expected. So, we strived to bring that number down. That way, the gains from each suggestion increased considerably. For almost two generations now, Tofaş is making that system work and is trying to share it with the suppliers as well.

IMPORTANT TURNING POINTS FOR TOFAŞ: TEMPR A EXPORTS AND THE CUSTOMS UNION

1995 holds an important place in the history of Tofaş, as it marks the year in which Tempra exports began. It is an important milestone not only for Tofaş, but for the entire Turkish automotive industry as well. It was Turkey’s first large-scale export endeavor. With this project, an automobile manufactured in Turkey was imported to Western European markets for the very first time. It would thus play a critical role in making Turkey an important base of automotive production in the ensuing years. Until that date, the automotive investments made in Turkey were intended for vehicles assembled for the Turkish market. However, Tempra exports opened the gates of Western European markets for the Turkish automotive industry. In that respect, Fiat completed its integration with the production systems of Tofaş and took a large step from being an assembly plant producing with CKD parts to a production center integrated with

The production and export of the Tempra at Tofaş constituted one of the important turning points for the institution. This operation prepared the company for the new conditions of competition created by the Customs Union.

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the Fiat world. In 1995, all the production systems of the factory were changed. KIT imports left its place to the import of parts; in other words, a contemporary production planning began for the first time and a switch was made to material management program. While this transition was quite problematic, it constituted a milestone that cleared the path of the company and the entire sector. Thus, the factory entered a system in which many versions and options were now being manufactured based on the demands of the customers. Consequently, the Turkish automotive industry evolved from a system manufacturing exclusively for the local market to a system gravitating towards exports. Following Tofaş’s move, other production centers established in Turkey began working on exports as well. A total of 40 thousand Tempra cars were exported. This operation also gave Tofaş the opportunity to be prepared for the new conditions of competition the Customs Union would create the following year. General Manager Jan Nahum relates the story of the 40 thousand Tempra-export and its positive repercussions on the automotive world as follows: The Turkish automotive industry did not export a single car to Europe until Tofaş manufactured the Tempra. The largest export volume was the CKD sent to Egypt. The supply industry infrastructure was not in a

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position to export vehicles to Europe, as nearly 20 units were required to receive the E mark, or the European mark… You cannot export to Europe a vehicle that carries the “E mark” component that holds a critical importance in terms of brakes, steering system, and security. Yet, it was necessary to export cars to Europe. The idea to export the Tempra was a joint decision born out of that climate and the ecosystem at Tofaş at the time… Fiat told us, “Let’s have the Tempra manufactured in Turkey, so production numbers won’t decline and we continue to sell it to Europe, and we can make the changes we’d like to make at the Cassino factory and put Bravo-Brava into production.” It was a two-year project; we would get the Tempra, export it to Europe and be done with it. It was such a project that we would manufacture 40 thousand cars, but the model combination we needed to possess the capability to manufacture was 100 thousand. We needed an infrastructure that could produce 100 thousand models; manufacturing supply industry goods parts, ordering parts… 100 thousand variations for 40 thousand cars… Orders were coming in through a computer system based in London. The entire sub-industry had to be connected to that, and the entire sub-industry had to receive the E mark. There were acid shafts next to our ports and on rainy days, acid was coming in with the drops and leaving stains. There were stones on the cement and the ports and the cement was not clean. It was not asphalt, but cement. Those stones were getting into the wheels. When the cars were released, the dealers were reluctant to clean the stones. We created the entire automotive exports philosophy of Turkey and its infrastructure by agreeing to manufacture those Tempra cars. If we hadn’t done the export Turkish automotive industry is so proud of today, would have started much later. Tofaş blazed the trail for that.

After Turkey signed the Customs Union treaty in 1995, which was enacted in 1996, commercial products went into circulation between signatory countries without any customs restrictions and could be sold in those countries. This brought important changes to the industry of European countries. Many countries allowed accessed to the Customs Union reached terms with the European Union for the access and adaptation process of the industry areas that were classic for them. They made programs, created timetables, and provided the transition period to facilitate their own transformation and update in the integration with the European Union. This new condition also meant important changes for the automotive industry in Turkey as well. Transformation entailed investment and Turkey needed to update her facilities. Turkey’s automotive sector had to adapt to the new environment of competition created by the changing sectoral dynamics prompted

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by the Customs Union treaty. As imports had increased dramatically, competition and the market began to grow very rapidly. European cars were now being freely sold in Turkey. This change marked a truly important psychological boundary, a threshold; unable to find any alternatives other than what was presented to them for many years, automobile customers were now faced with great diversity. A difficult period thus began for the local automotive industry; some even though the factories would be closed. This period constituted a turning point for Tofaş. In order to improve its competence and make faster transitions into new models, it would have to work hard, overcome obstacles, and make a unique and important place for itself within the competitive environment. That is exactly what happened. Step by step, Tofaş left behind the difficult days of transition triggered by the changes the Customs Union brought and reached a point of approximately 25% foreign trade surplus per year. Developments in production and the supply change, and the advantages of the R&D department supporting the product constituted the pillars of long-term sustainability. In Jan Nahum’s words, the Customs Union pushed Tofaş towards mastery of production and created the birth of a large economy in the 2000s. Striving to cross the borders, the company was able to transform this apparent obstacle into a solution. As these great changes were underway, in early 1995, Tofaş’s name was involved in a highly upsetting incident. Opposition party ANAP leader Mesut Yılmaz documented that the bidding envelopes for the tender initiated to determine the financial consultant firm to oversee the sale of Tofaş’s public shares was opened by then-Prime Minister Tansu Çiller and filed a criminal complaint. An investigation was initiated and both the investigation and the court proceedings continued the following years as well. This incident greatly bothered both Tofaş and Koç Holding because the Tofaş name was constantly being mentioned in the news about the ongoing case and led people to think that the company had something to do with the corruption. Finally, Mustafa V. Koç made a statement:6 As you all know, we have nothing to do with this scandal. The State Partnership Administration (Privatization Administration) put its own shares on the market. The claims and gossips originated from the sale. Therefore, we have absolutely nothing to do with the incident. However, the Tofaş name being circulated both in newspapers and on television made us very uncomfortable.

The motion to subpoena Prime Minister Tansu Çiller to the Supreme Court was voted at the Grand National Assembly of Turkey in February of 1997 concerning the Tofaş investigation and was denied with 257 “yes” to 271 “nay” votes.

6

Cumhuriyet, May 28, 1996, p. 8.

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KOÇ FINANS

Everything was being renewed during this period. Concepts in the workplace were changing and being replaced by new ones, organization structures were being modified, and new methods were being developed to provide easier solutions to both sellers and buyers. Founded in 1995, Koç Finans (Finance) appeared as a “first” that offered buyers different options of payment. It was established with a view of “providing direct financing to consumers.” Payable bills would thus be replaced by consumer financing in sales. Koç Finans was based on the idea of presenting solution alternatives to financing needs without the bank branches through dealers that would provide product or service. With the projects it designed in line with the unique structure and organization of the Koç Group and the economic conditions of Turkey, it soon became the pioneer of an entirely fresh credit system. Still, no innovation can dispose of old ways so easily. Izmir dealer Riccardo Aliberti recalls that this system change, which is deep-rooted by now, was hard to embrace at first during those years. When Koç Finans was about to be established, we were briefed on how it would function: we were told that all dealers would act as guarantors. Everyone protested, saying we have no income, how can we act as the guarantors? Coşkun Ulusoy, who was the finance director at the time, said to us, “Gentlemen, the concept of credibility is just starting in Turkey. Therefore, we have to do this for two to three years. Because we don’t know the customers, you do. So you can do the first round of elimination. Therefore, we need you to act as guarantors to be able to do that, but we will collect from you last.” Truly enough, although we were the guarantors, we never took any money from us to compensate for the delayed customers in the first three-four years.

Five years after Koç Finans was born, another finance company was established as the joint venture of Koç and Fiat groups: Koç Fiat Credit. The goal of the company, all the shares of which were bought by Tofaş in 2003, was to provide loans for all the Tofaş and Fiat Group models. Today, including Tofaş’s direct sales, Koç Fiat Credit provides loan services for all Fiat, Alfa Romeo, Jeep, and Iveco cars manufactured in and/or imported to Turkey under the Fiat Auto license, as well as used cars. Koç Fiat Koç Fiat Credit provides easier, faster and more flexible financing conditions of financing for customers looking to but a Tofaş or Iveco model vehicle from the authorized dealers of Tofaş and Iveco. As the young loan operation specialist of a company that oversees 150 to 180 loans issued per day, Cansu notes that one would have to wait for several days if s/he would apply to a bank for an automobile credit, but that it is often resolved by the end of a workday through the dealer. Koç Fiat Credit has three major departments: operation, tracking, and allocation.. The day your loan is allocated to the dealer, if the car you’ve

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been eyeing is in the window of that dealer, you can complete all payment transactions. This is how far the system has come since the days of waiting for months and retiring bills… TOFAŞ LOSES ITS FOUNDER

The most tragic incident of the 1990s for Koç family and Tofaş was, without doubt, the passing of Vehbi Koç. Founder and Honorary President of Koç Holding, Vehbi Koç, who had introduced Turkey to the

Tofaş’s founder Vehbi Koç passed away on February 25, 1996

automotive industry, died on February 25, 196 at the age of 95 in Antalya. As someone who accompanied him during his factory visits and worked with him, listening to Kaynak Küçükpınar’s observations and thoughts would prove to be a good way of cherishing the memory of Vehbi Koç: The late Vehbi Koç is the father of Turkish industry. This should be recognized as such. Turkish industry could not have become what it is today without Vehbi Koç. Vehbi Bey visited the factory from time to time. He would follow the developments in the automotive industry and the management under Bernar Nahum’s direction. Occasionally, he would bring a guest. It would be my job to give him a tour of the factory. Later, I would ask, “What would you like for lunch?” and he would reply, “salt-free cheese and crackers…that’s all I can eat”. We would always prepare his prayer rug and keep the prayer room clean for him. He would rest for an hour after noon prayer; we would also set up for that. Afterwards, he would call me over to the table.

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Throughout his life, Vehbi Koç always strived to do more; he constantly sought after how to manufacture an industrial good that was not yet produced in Turkey and which technologies to use, where, how, and with what kind of technology.

PALIO, PALIO WEEKEND, SIENA

Having visited Bursa for the first time in 1994 to oversee the production and export of the Tempra, Fiat Auto SpA’s then-General Manage Roberto Testore paid a second visit to Bursa on July 23, 1997. The reason behind this particular visit was to observe the progress on the World Car (Project 178) at the last stage of serial production at Tofaş: The 178 model entailed the Palio series: Palio, Palio Weekend, and Siena… The World Car was born out of Fiat’s approach to manufacture the product and sup-parts of the global product in less expensive countries and their assembly in areas close to the local market, which was believed to bring economic success at the time. In countries such as Turkey, Brazil, and the like, the automotive market was still in its development stage, was not exactly on a par with

Automobiles of the 178 series: Above: Siena, below: Palio Weekend, right page: Palio.

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Europe and America, and the demands were different. Fiat thus said, “We shall make a car that can meet the needs of everyone and wherever a part of this country is manufactured most economically, it shall be produced there. Then, enterprises should bring together the parts they purchased from these sources, assemble, and sell them.” It was an important strategy for Fiat. Along with Brazil, Tofaş became one of the two important production centers of Fiat Auto’s Palio Project in 1998. Comprised of the Palio, Siena, and Palio Weekend models, this project had a significant impact on the B segment, which had emerged with the Uno, to find a stable place in the market. Cengiz Eroldu recalls the tension they felt during the intense work on the early period of the serial manufacturing of the 178 series: The production of the 178 series began in 1998 with a two-year delay… The extended negotiations between the partners caused the project to be postponed. Fiat’s World Car series was designed for Turkey, Brazil, and India. The production of the updated versions still continues in Brazil today. As the project was being delayed, we were constantly losing


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market share to the outdating of our older models. As soon as the deal was signed, work began at high pressure. Brazil had already begun production before Tofaş did. In order to stop the loss of market share, we first began production with parts manufactured in Brazil. Customs taxes and shipping charges seriously pushed our costs the first year. With a rapid localization plan; however, we were able to reach our cost targets despite a one-year delay.

The speeches delivered during the launch meeting of the Palio series on June 8, 1988 demonstrated the importance of this series for the automotive sector in Turkey and the new economic relations in the world. Tofaş executive director and General Manager Jan Nahum stated that day that the responsibility undertaken by this project was the most serious proof of the international integration period that the Turkish automotive industry had entered. Nahum added that while integrating with the know-how technology Fiat was developing to manage the Word Car project, Tofaş not only had the most modern management systems in existence, but was also equipped with this know-how infrastructure and was part of it sufficiently enough to be able to compete with the rest of the world. Nahum summarizes the subject as follows today: We exported the Tempra for two years. The next step to follow was to enter the World Car Project 178… In other words, to build a contemporary car with the rest of the world and to enter the global network of production… We were building some parts and exporting them to Brazil and some parts were being imported from Brazil. That is to say, whoever was more competent at building a part, they were giving it to the world car. It was an interesting concept…

Palio detail on opposite page.

Koç Holding Tofaş Group Chairman at the time, Gökçe Bayındır da also stated that the 178 series was the boldest and strongest investment and the most trailblazing move of the Turkish automotive industry after the Customs Union agreement. Tofaş Otomobil Fabrikası and Tofaş Oto Ticaret A.Ş. Board Director Suna Kıraç, on the other hand, added that the conditions of competition were getting steep and that this huge 262 million-Dollar investment made during a period in which local manufacturers were taking constant hits, would mark the beginning of a new age as Tofaş was nearing 30 years in its partnership with Fiat. Through this new strategy, Tofaş will bring a new dimension to the world automobile classification and the Palio model will assume its place in this competition as a world car… I would like to extend my thanks to everyone for their contributions. However, our special thanks is reserved for our partner Fiat. Over the past thirty years, they have demonstrated the utmost example of harmonious work and collaboration and have supported our company in the transfer of

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technology. Moreover, you only have they shown their trust in us and in our country today as they did t-some thirty years ago, but they have proven their philosophy one more time and have allowed us to bring to life this vehicle in collaboration… … We would also like to thank all concerned parties that have trusted in and supported the Turkish automotive parties. Our country holds a great potential. We are a group that has seen this potential in industry, revealed it, and have reaped what we have sown. Our passion to serve our country was initiated 72 years ago with of father and founder Vehbi Koç and our Group has made it to the present by signing under many “first”s in Turkey, including automobiles. As Koç Group, we are proud to have moved on from being a country dependent on import substitution to a country that manufactures World Cars and creates new technology.

Palio Go above and on the right page.

In summary, the head-to-toe transformation of Tofaş in parallel with all other Fiat factories, the dissolution of the method services and the establishment of an R&D department in the transition to the integrated factory structure, and the Tempra production all constituted critical turning points for the factory. The 178 was R&D’s second large project after Tempra. Naturally, this period of transition and transformation had its challenges; however, it was certainly quite educational and thrilling for young engineers working at Tofaş. Engin Algür was one of them: Although product was the first thing to spring to mind in speaking of R&D in earlier times, we separated the product R&D team and

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the production R&D of technology, bodywork, and mechanic from one another within that small unit. This much was true: a group was designing the new product, and our relatively smaller group was doing the R&D of how that new product could be manufactured. Therefore, both groups were R&D. In short, the job was the new product and the design of the new product. While common platforms were formed, in time, it became apparent that these two wings had markedly different dynamics. Meanwhile, as the second largest project after the Tempra, the Palio-Siena-Palio Weekend Project code 178 was the first serious test of these two groups under the R&D roof. As the negotiation process Fiat and Koรง Holding was prolonged, the Brazilian wing of Fiat began Palio production before we did. Due to our delayed start, we paid a two-week technical visit to Brazil to catch up; the

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production technology of this vehicle was considerably different and we greatly benefited from our studies at the Betim-Fiasa. Upon our return to Tofaş, the creation of the new lines from scratch, their equipment, and operation were large-scale undertakings to be completed in the limited remaining time.

Production ended after a total of 80,063 Palios were manufactured. Siena was also taken off the belt after 26,750 cars were manufactured. Both cars were produced for the last time in 2001. INNOVATIONS CONTINUE

In early 1998, Tofaş made a new addition to the Uno series and launched the new car at the beginning of the year. Designed particularly for women and younger consumers, the Uno Hobby was a version of the Uno SX, on of the best-selling cars among the smaller models. It was equipped with various different accessories. It had an injection engine of 1.5 lt. and could drive at a maximum speed of 170 km. Fuel consumption was 5.2 lt. at a 100 km. Beyond all that; however, the top was painted sky-blue and the body was silver and it was quite striking in that sense. It was released in limited numbers; the seat covers, wall panels, and even the seatbelts were blue. It stole the hearts of many with its unique design. In 1998, Tofaş conducted its first customer satisfaction survey and also received its ISO 9001 certificate. The independent external auditing conducted at Tofaş certified its Quality Assurance System. This system was evaluated in a manner that would encompass the work of all units from design to after-sales services and was awarded to Tofaş as a whole. The same year, Tofaş took another significant step towards human benefit from technological innovation: the Tofaş-Fiat Movement Autonomy Program was displayed at the Izmir Fair. This program entailed the production of automobiles designed for the walking disabled that could only use their arms. Through the help some easily attacheddetached components, it allowed the walking-disabled to easily drive a car. The Autonomy Program received the Golden Rose Award from the Presidency in 1999 and a Certificate of Appreciation from the Turkish Federation of the Disabled. BR AVA AND MARE A

The automotive industry was going through a very rough time. Due to the economic crisis, it had been significantly wounded and suffered serious losses. Exports were not at the desired level and the domestic market had narrowed. Nevertheless, investments were not diminished. The average capacity use at the factories was not even at fifty percent. In 1998, Tofaş was still at the top of the list with a production capacity of 250 thousand cars per

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year. Production; however, had stagnated at 92,990. Put on compulsory leave, workers were able to go back to work as late as February of 1999. In April, a 6-point discount was implemented for three months in the additional Vehicle Purchase Tax on vehicles with an engine capacity not exceeding 1600 cc. This led to a discount on automobile prices. Sales began to increase as of that summer. In June of the same year, TofaĹ&#x; launched Fiat Brava. An announcement was made at the launch: as of October 1999, Fiat’s Brava and Marea would be manufactured in Turkey. The Brava had a new generation engine of 103 horsepower and 1.6 lt. valve and a configuration designed especially for Turkey with a suspension and engine cooling system. The driver seat was equipped with an airbag and the passenger side could be installed with one upon request. The high-caliber hydraulic steering wheel, one-touch electrical front windows, anti-frost rearview mirrors, and the radio and tape integrated into the front panel were among some of its comforts.

Brava and Marea, the production of which began in 1999 in Turkey.

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4519 Bravas were manufactured from 1999 to 2002 until they were taken off the belt. Tofaş, launched the Marea –meaning tide- model of Fiat in October. The model stood out with its unique suspension system, noiselessness, and rich accessories and had undergone many improvements through the works of Tofaş engineers to be adapted to Turkish standards and be readied for sale. The production of Marea continued until 2006 and a total of 17,282 cars were manufactured. THE TR AGEDY OF 1999: THE MARMAR A E ARTHQUAKE

August of 1999 was shaken up with the Marmara earthquake. The earthquake occurred at 3:02 AM at a magnitude of 7.4 and lasted 45 seconds, taking 17,480 lives. These numbers were never forgotten by anyone who was exposed to or spared by the earthquake. The entire Koç Group was swiftly organized to help the region after the earthquake occurred. Ali Koç was in charge of the crisis commission. Help was brought to the area from the four centers created under his coordination of Koç Holding. The two crisis desks under Tofaş’s coordination were transmitted to the help centers set up in Yalova, Çınarcık, and Gölcük. Cranes, concrete breakers, oxygen sources, generators, grinders, sledge hammers, cement breaking guns, iron cutters, cable pullers, car lifters and many other similar equipment were sent to the earthquake zone along with technicians. 400 Tofaş employees joined the wreck removal works and were able to rescue 13 victims alive. MOTOR SPORTS RESUME WITH BR AND CUPS

As of the middle of the 1990s, Tofaş came to fore once again with news in sports. More precisely, it began appearing in the sports pages and sometimes in the news columns of newspapers with car races after a nearly decade-long break. The subject was the band cups organized between 1995 and 1999. General Manager Jan Nahum was the leading name behind this operation. There were several important reasons for this endeavor: the first was to understand the weak points of the vehicles and apply modifications accordingly. For, when a car is pushed to its limits, the weak points emerge. The second important reason was to increase the recognition of products. Furthermore, brands winning the race were proving the level of their quality and were moving ahead compared to other brands. Furthermore, it was a good way to make amends with disillusioned consumers who had paid for their vehicles back in the 1980s, but had to wait in line for months to have them delivered. The brand cups were organized in consecutive order as Uno Cup, Tipo Cup and Palio Cup; each one began while the other was still

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ongoing. It was highly beneficial both in terms of repeatedly articulating the names of the Fiat automobiles and for motor sports and car race enthusiasts to enjoy the thrill once again. The account of the current Fiat Motorsports Turkey team director Koray Kafkas makes us wonder if we can “do it” as well: In speaking of motor sports, people often thing of modified racecars, when in fact there are many categories involved. You can pick any one of these groups. They all have one thing in common and that is ensuing all vehicles have equal safety measures. The safety measures of the “top” WRC automobile and the standard group vehicle of the lowest rank are identical and cannot be changed; the seats, the race belts, the security cage, the wheel, the fire extinguishers, etc. all have to be standard. In other words, safety measures are modifications are two different things. Uno has a shock absorber that can also be considered a safety measure. It allows the automobile to remain steady, turn, and increase stability, otherwise, the car on the street could be racing as well. The Uno is therefore designed for the public. It is not too far from the standard, but when you ride in it, it lends the sense of a racecar. For normal people to race with, not car racers… If I were to put you on a powerful racecar, it would be impossible for you to drive it. But if you ride one in the standard group, you can enjoy it and have fun…

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TofaĹ&#x; returned to motor sports with the brand cups Uno Cup, Tipo Cup, and Palio Cup organized in the mid-1990s.


The races appealed to many people. It was an important activity for popularizing motors sports in Turkey among larger masses. Amateur racers were targeted as participants; the objective was to give young people looking to speed an opportunity to do it not on the streets, but on the racetracks after being trained by experienced specialists. Apparently, the activity had begun a few years earlier. In 1993, the foundations of Izmit Bay Circuit, the first racetrack of Turkey, had been laid and it was put into operation in 1995. Various private organizations and Turkey Championships began organizing their races here. After-Sales Service Director at the time, Saffet Üçüncü relates the birth of the Uno Cup: I was not part of the project when the Uno Cup began. I joined the team six months later. I was working with Uğurman Yelkencioğlu and Murat Selek. We managed Uno Cup with the same team. When Fiat Uno arrived in Turkey, both in terms of the car’s model and features and its history in Italy led people to believe that it was well-suited for motor sports and so this organization was brought to fore. We welcomed the idea. Uno Cup should not be regarded merely as a motor sports activity; it was a kind of organization that included training as well. In the course of the three years, an average of a thousand people were invited and these people were given serious training on safety driving and performance-oriented driving. The racers were selected from the applying Uno owners. The organization was led collaboratively with İskender Atakan and Tofaş. Among the teachers were renowned names such as Hakan Dinç and Lemi Tanca. We met the expenses of all the participants coming in from all corners of Turkey. I believe that many people began driving safely thanks to Uno Cup.

25 Uno S model racecars were prepared for the Uno Cup races. The races comprised of four cycles and a final race. Different pilots were starting at each cycle race and the top three were admitted to the final. Tipo Cup was organized while the Uno Cup races designed for amateurs were still under way. It became one of the most highly watched and popular private cup organizations. In additions to legendary pilots of the 1970s, amateur pilots were also showing up to take strong steps into the future. Marked by highly competitive race, Tipo Cup was organized through the collaboration of Tofaş and Ethem Genim. Genim recalls: With the end of the Lada Cup in 1995, I began to transform the Körfez Circuit into what it is today. The work continued almost day and night. In early 1996, I told Levent Pekün, “You know people at Tofaş, get me an appointment, I’d like to talk to them about Tipo Cup.” I knew he was close to Jan Nahum and so he was the right person to ask. I told Levent Pekün that I wanted to do the organization with 15 Tipo cars and that I would put this project into motion as the reawakening of motor sports in

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Turkey. Levent Pekün spoke with Jan Nahum on my behalf, scheduled an appointed and we went to see him. Next, I was introduced to Saffet Üçüncü. I told him about my project and told him that I wanted to purchase 15 Fiat Tipos. “What are going to do about it?” he asked. So, I requested service and a discount on the cars and the spare parts. I added that I would send the car to Italy to get it ready for racing and bring it back ready. He gave me very good offer. Then, I visited Yusuf Aramacı for the preparation of the cars and we began working together. We sent one of the cars to Italy to get it ready.

Tipo Cup continued for three years. Compared to Uno Cup, it was an entirely motor sports event and competition was at the highest level. The first year, Şerif Yardımcı won the race and he was awarded a Tipo at the end of the year. Ahmet Atay was the champion of the second and third year. This organization was also important for encouraging a number pilot to continue motor sports for many years. The Palio Cup began in the 1999 season with 16 Fiat Palio racecars equipped specifically for the race. The pilot team remained the same and the races were quite exciting. 20 cars raced in the final season of 2001. Koray Kafkas, who began working in the motor sports department under Saffet Üçüncü on January 1, 1999 relates: In June of 1998, production of the Palio, Siena, and Palio Weekend models we collectively refer to as the 178 series began in Turkey. Saffet Üçüncü was transferred to the factory. Mr. Saffet’s research had revealed that among these models the Palio in particular was sportier and performance-oriented and the idea to continue motor sports with this model was born. Hence begun the preparation of the 16 vehicles. Immediately after I began work, I was included in the orientation program Saffet Bey had designed for me and from which I greatly benefited to this day. The automobiles were ready in April. The selected pilots chose the cars they wanted to race with. The race was held in May. It was the best brand cup organized in Turkey to date. It was aired live on TV and caused a great stir.

It is quite evident why an automobile factory cannot or, more accurately, should not stay away from motor sports. The studies conducted during the preparation of the cars and after the race are critical for the technological advancement of normal automobiles. In other words, it is important to reiterate that the issue is not limited to speed, thrill, and pleasure of racing, but that the R&D studies provide the vehicles with countless benefits. In 1999, the Fiat motor sports team won first place in the Turkey F3 category.

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THE FIRST CHAMPIONSHIP OF THE TOFAŞ BASKETBALL TE AM

As it was celebrating the 25th anniversary of its inauguration in 1999, Tofaş Sports Club enjoyed a win that brought much pride and joy both to the basketball team and all Tofaş supporters: it beat the Efes Pilsen team during the fourth game of the final series. Hence, it became the 1998-1999 season champion of the First League of Basketball. Taking the championship trophy out of Istanbul 11 years later, Tofaş team members dedicated this championship to Bursa locals, who had been unfailingly supporting them for all these years. The championship mentioned here in a few lines was not so easy to win. Several years earlier, General Manager Jan Nahum had lent his support to basketball the same way he did to motor sports and had opened the way of the club. Efe Aydan, who was the general manager of the club at the time, relates:7 Prior to the 1998-1999 season, Tofaş CEO Jan Nahum decided to invest in the club in order to sustain and protect our brand image in the course of the new investments made to our factory. He had decided that we needed to do better and achieve more successful results on behalf of Tofaş. So, he paved the way and pioneered us to move forward. You’d be surprised at the great example he set.

The club made some very important transfers. A group of players everyone referred to as the “dream team” was created. This strong team not only won this championship, but the Presidential Cup in the same season as well.

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Murat Kuter, Tofaş Spor Kulübü, 35 Yılın Hikâyesi, 114.

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The 2000s: TofaĹ&#x; on the rise again


“Working in the automotive industry is similar to riding a bike; you must constantly pedal forward in order not to stop and fall.” Rahmi M. Koç Excerpt from the speech Rahmi Koç delivered on the 15th anniversary of Tofaş


The positive

atmosphere created by the stability program implemented at the end of 1999 had led to a fall in inflation and interest rates during the first half of 2000. In 2000, car sales reached the highest level in history. The production of almost all Tofaş vehicles on the market had nearly doubled. However, the improved climate took a turn for the worse by the end of the year and the bank crisis hit the country in November. This was also the harbinger of the crisis period that broke up with the “constitution throwing” incident that occurred at the National Security Council in February of 2001. Following the sudden rise in interest rates at the end of December and the subsequent fall in demands, Tofaş was forced to reorganize its program; 1900 field workers were sent on leave at half-pay. The 2000s were a period filled with conflicts and unprecedented achievements in the growth of Turkey’s industry. Considerable ups and downs were observed in the economy during this tumultuous period. It was also a time of significant political changes both in Turkey and the rest of the world. During these developments, Tofaş was not only on the rise as a global production and R&D center, but it was also able to transform its own development and future into a successful business model as a partnership that could shape this model with the know-how and financing power it possessed.

Dashboard of the Doblò.

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DOBLÒ

While the economy was on a tight rope during this period, Tofaş made a huge leap in the second half of 2000 that catapulted the company into success. This leap was called the Doblò. Thanks to the Doblò production plan predominantly designed for exports, it was announced that the personnel on leave would be asked to come back to work soon. The period of renewal that began with the creation of the R&D department within Tofaş had also brought along the crystallization of a new idea. Tofaş needed to become a center in which not second, but first-generation cars were being manufactured. Initiated in 1998 as the Scudino project and brought to life in 2000 as the most important step of R&D, the Doblò project thus evolved around this idea. The level of competence Tofaş had thus far achieved in form design and production allowed Doblò to be part of the project and development process. As of the second phase of the project, the weight of the Turkish engineers increased; 100 Tofaş engineers worked in the design phase. Doblò was designed to be as practical as an automobile, but as large and multi-purpose as a minivan and was to be launched with the label “Made in Turkey.” It had a weight capacity of 800 kg. Nearly 90% of production was intended for exports and a revenue of 1 billion U.S. Dollars was targeted per year. Constituting a real breaking point for Tofaş and a symbol of globalization, the road that led to the Doblò was traversed in three

The classic Doblò… It was designed to be as practical as an automobile, yet large and multipurpose enough like a minivan. Released with the label “Made in Turkey,” the Doblò carried Tofaş to leadership in the automotive sector in the 2000s.

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phases, according to Jan Nahum. The first phase was the export of the soon-to-be-discontinued Tempra to Europe, the second phase was the production of a contemporary world car with the rest of the world and thereby entering the global production network, and the third and final phase was the production of a brand-new vehicle for the first time in Turkey, namely the Doblò project: We manufactured the Doblò and we were exporting it, but the right strategy had to be designed in order to bring it to that level. Doblò was the maturity phase of that strategy, the last step of the adventure; it constituted the phase of becoming a true center of production. In order to put a car into the market, one requires roughly two to two and a half million hours of labor; the engineering, the hours, the development, the creation of production technologies, two and a half million hours for all that… If I am not mistaken, we completed 700 thousand hours of the Doblò in Turkey. The main design came from Italy. Road tests, heaps of engineering work, the validation of many parts was all completed in Turkey because the supplier industry was in Turkey.

The production of Doblò began in August and the car was launched in September. It was presented to the public at the Paris Auto Expo held between September 28 and October 15, 2000. A few months after the car’s launch, Jan Nahum made the following statement: “We are currently struggling with producing enough cars for Turkey and Italy. We are getting ready to increase the 80-85 thousand production capacity we foresaw for 2001 to 95 thousand. Manufacturers giving weight to exports will remain standing. If we are not afraid of a potential crisis today, it is thanks to the Doblò, which demonstrates the importance of exports.”1 Through Fiat’s decision to manufacture a model for the first time in a single country outside of Italy, Tofaş became the production base of an entirely new model. The distinction brought by Doblò was to become part of production in a global market for the very first time. Tofaş would no longer see an important part of its customers. Tofaş members who saw a Doblò drive by every time they were travelling abroad took pride in their work, saying, “That’s our Doblò; we made that car…” The constant increase in the number of Doblòs was an indication of customer satisfaction. It was also evidence that the quality targets had been achieved and that Tofaş had undertaken an industrial role on the international scene.

1 http://bigpara.hurriyet.com.tr/haberler/genel-haberler/jan-nahum-doblo-ya-yuksek- talebin-devam-etmesi-halinde-opel-den-cikarilan-iscileri-ise-almak-istediklerini soyledi_ID347940/ October 1, 2017.

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In the ensuing years, the Tofaş R&D became one of the development centers of Fiat Auto. What did that mean exactly? This showed that Turkish engineering had become an engineering practice that had global repercussions. In other worlds, Tofaş’s initial responsibility of overseeing production problems had now transformed itself to taking over the responsibility of making changes to existing products. This entailed not only the management of not only singular parts, but all of the changes on a given model. If there were any changes affecting the Doblò, the entire responsibility, in other words, approval, application, design, and design confirmation responsibility was on the shoulders of Tofaş. In evaluating the importance of Doblò for he company, thenForeign Relations Group Director Nezih Olcay recalls the most exciting early days of the project: The first giant step towards exports and turning Tofaş into a production center was taken with the Doblò. It was the first car in Turkey to be manufactured almost entirely through local production. The project was first initiated in Italy, but the country of production had not yet been chosen. CEO Jan Nahum and factory director Antonio Bene were often traveling to Italy and expressing their demand, but after all this was a question of cost; we had to compensate for both the cost investment and the cost of the vehicle. We went to work at the company for a week and drafted the cost of the project cent by cent… Finally, Turkey emerged as a good investment. In fact, the actual state turned out to be better than we had projected. Doblò had coincided with the bank crisis of 2001. Automobile sales in Turkey had considerably declined. It was then replaced by exports. In that respect, that period went well for Tofaş. Doblò is the starting point of where Tofaş stands today. It was followed by MiniCargo, then the new Doblò, and finally Egea. D Doblò was the start of this rise. There is something else, of course; cost calculations do matter, but if our factory had not reached the level of manufacturing this car, none of this would have happened. The factory was not at that level. It was a real center of production.

Believing that the Doblò project was a turning point for Tofaş, Bülend Özaydınlı also believes that it opened the floodgates for the company. The Doblò is a highly successful one. Tofaş received new investments, developed its R&D and engineering units all after this project came to life. Doblò was not only about manufacturing the car in Turkey, but to begin developing the technology within the Tofaş Company. After that, the work on the Doblò was taken as the basis of other projects. The technical know-how was registered on Tofaş. These are not easy

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accomplishments. After this point, considerable gains were made from these principles. This is all about teamwork and the result of a ream working together in harmony. Jan Nahum and Antonio Bene were instrumental in getting the Tofaş team to obtain successful results and to have all executives and workers lock on success. Our colleagues in the subsequent periods also carried the flag of success to higher levels, reaching the point where we stand today. Jan Nahum was one of the key players in this project. When he later moved on to FCA as a top-level executive, he continued to contribute towards Tofaş. Our collaboration bore excellent results in terms of bringing new models to Turkey.

Doblò had no precedent on the market. Much like Uno, Doblò also belonged to a segment that did not exist in Turkey. Large commercial vehicles were available, but there was no light commercial vehicle that could also be used as a passenger car if desired in the city. Therefore, it had met the important need of consumers. It received far more interest than anticipated and created its own segment. It was no coincidence that it repeatedly received the “Commercial Vehicle of the Year” award after its launch and broke exports records for Tofaş. “The market truly needed the Doblò!..” This comment Gaziantep dealer Ali Topçuğlu made as someone on the sales side of things was a clear indication of how the Doblò was right on target… Fiat Doblò carried Tofaş for many years. It was manufactured for 15 years and held a significant place in Tofaş’s range of achievements. The first Doblò model was taken off the belt at the end of 2016. A SURPRISING YE AR IN BASKETBALL

Similar to the year before, Tofaş Basketball team won both the league championship and the Turkish Cup in the 1999-2000 season. Preparations had just begun for the new season after these victories, when management decided to pull back from the league. Club president Ersin Taş released a written press statement and said that the basketball team decided to lean towards a restructuring for young players and that Tofaş was bidding farewell to the professional league. The Holding had explained this decision by the soaring budget. Tofaş management, on the other hand, was convinced that certain expenses needed to be made to maintain leadership in the league, which in turn, significantly helped with brand recognition. However, preparations were halted before the European cups and the team was dissolved. This rapid decision that came immediately after the consecutive league and cup championships was met by much sorrow in the basketball community.

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The youth-oriented program the Basketball Club initiated in 2000 would later grow and expand considerably. At the heart of this initiative, regarded as a future investment, was the recruitment of young talent from a larger spectrum with the future of the club in mind and to introduce them to Turkish basketball. Therefore, a decision was made to increase the scope of the Tofaş Basketball Schools established in 1999. The objective was to work with people dedicated to and passionate about basketball. THE ECONOMY IN ECLIPSE , TOFAŞ ON THE RISE

The positive atmosphere in the first half of 2000 changed by the end of the year. The bank crises erupted in November and new problems began to emerge one after another. Tofaş was forced to reorganize its production program as a result of the increase in interest rates. As part of this program, nearly 2000 workers were sent on compulsory leave on half-pay and full compensation. However, as 60 percent of the 2001 production plan was built on exports, soon, the workers would be called back to work. The constitution crisis of February 2001 was the icing on the cake. The stock market fell by 15 percent and state banks had significant deficits. Outflow of capital began, as investors were threatened by the uncontrollable state of the markets. Due to the government’s floating rate policy, the U.S Dollar rose from 695 thousand Lira to 900 thousand, companies began to go bankrupt, and thousands of people were out of a job. When all these incidents piled on top of the ripple effects of the Russian Crisis and the repercussions of the Marmara earthquake, 2001 went down as one of the worst and most tumultuous years of Turkey’s economy. The automotive sector received its share of the disaster with the lowest production rates of it history. The 2000 Tofaş production for the local market was down to nearly a third. However, when production for exports was factored in, the numbers were telling a different story; there was a significant rise in annual cumulative production numbers compared to the previous year. Having manufactured 1,795,579 cars since its establishment, Tofaş had reached 1,912,939 cars by the end of 2001. This number connoted production leadership in the sector. According to the Chamber of Industry’s 2001 Turkey’s Largest Industrial Company study, Tofaş had risen to first place in the private sector with its high sales volume. Tofaş success was not limited to sectoral leadership; it also became the exports champion. It was the automotive company with the highest exports volume. 100 thousand Doblòs had been manufactured in the first year. 90 percent of this record production was exported to 43 different countries. Sent to all the European countries, the Doblòs constituted 83 percent of Tofaş total exports and made a significant contribution to the economy during this difficult time.

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TOFAŞ OTO TICARET AND THE FAC TORY MERGE

The decision to merge Tofaş Türk Otomobil Fabrikası A.Ş. and the marketing company Tofaş Oto was taken in 2001 and was put into operation in May. This change was directly related to the economic crisis and was an operation undertaken in order adapt to the conditions of the time. Koç Holding Tofaş Group President Bülend Özaydınlı held a press conference at the Holding on May 14th and explained the reasons behind the merger as follows: The period in which we live requires proximity between producers and customers. Therefore, Tofaş Türk Otomobil Fabrikası A.Ş. and Tofaş Oto Ticaret A.Ş. enterprises have merged in their 30th year to join forces. From this point onwards, Tofaş is a single entity in which production and services are managed under the same umbrella. In this day and age, eliminating distances has become an exigency and this new organizational structure will allow us to conduct our customer-oriented production and service policy in the most effective manner. The objective of the merger project is to create a customer-oriented value chain that stands closer to the customer over the path that leads from the factory to the customer. Our customers will thus grow closer to production and their demands will be shaped faster in production. The 2000s will not only bring change, but also growth for Tofaş.

Bülend Özaydınlı ended his speech with very clear messages “Rather than giving verbal support through Tofaş, Koç Holding and Fiat Auto continue to lend concrete support through hundreds of billion dollars in investment. The new Tofaş born out of this integration will continue along its path with this conscience and new objectives. The new Tofaş believes in its future and in the future of Turkey.” Both by definition of his position at Koç Holding and as a member of the Tofaş Board of Directors, Bülend Özaydınlı had taken a close interest in Tofaş; until the end of his term in 2007, he was the executor and supervisor of new projects. The portrait Nezih Olcay draws regarding Özaydınlı’s approach to management demonstrates why Özaydınlı was among the unforgettable names: I never saw Bülend Bey as someone with complicated ideas. He would always think clearly and simply and could easily express his ideas to others in a very explicit manner. That is why you would never find yourself in a dilemma later. Moreover, he thought very rationally and acted as such. He would never regard issues and solutions with his Koç identity and would defend and put into action what he thought was right, without any vested interest.

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Between 2000 and 2007 Bülent Özaydınlı served as the Tofaş Fiat Group President and continued to show an interest in Tofaş as part of his position as Koç Holding CEO. During his terms as CEO, he maintained his position as Tofaş Fiat Group President. This period was marked by significant changes in the management sense. I was assigned to that position in 2000. At the time, the Tofaş Group was a very large family comprised of companies including the Tofaş Factory, Tofaş Oto, six main dealers, Otoyol, a marketing company, and Türk Traktör. It had been structured in line with the regulations, marketing and production conditions of the time of its inauguration and had yielded successful results. However, in 2000, these conditions were obsolete and change was much needed. When I became the CEO of Koç Holding, we changed the name to Tofaş-Fiat Group. Turkey had accessed the Customs Union and had opened her doors to all global companies. Change was a must. As the first step of change, we did the following: we merged the companies. Tofaş Oto and Tofaş Factory were merged. Next, we grouped all of the main dealers under the same room collectively known as Birmot. Hence it became a much simpler group of companies that could be managed from a single channel. This change was brought to life after arduous work and by the broad scope of power Rahmi M. Koç granted us with determination.

FIAT GM POWERTR AIN

One of the most important events of 2001 for Tofaş was the sale of the engine and transmission unit to Fiat-GM Powertrain Company. Following the decision of Fiat and GM companies to merge the engine and transmission units after sharing shares, Tofaş decided to opt out of this side of the business it has been involved in for long years. Sinan Yıldırım, who experienced this change in its most heated period, recounts: In 2001, Fiat decided to outsource its entire mechanic unit, meaning both its engine and its transmission. They had a merger with GM. Towards the end of 2000, they founded a company called Fiat-GM Powertrain. In July of 2001, Tofaş came aboard. 74 white-collar and 400 blue-collar workers, including myself, moved to that company. Nothing changed; only our personal benefits were transferred in full. We were no longer Tofaş workers; we were working for Powertrain. In late 2004, Fiat decided to bow out of the merger. Later, the company decided to shut down the plants here and to manufacture the engine and the transmission in Italy.

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In 2005, Fiat and General Motors parted ways and the Powertrain operations were halted. Following the meetings in New York, the Fiat-GM collaboration that begun in 2000 was dissolved. ALFA ROMEO BR AND AT TOFAŞ IN 2001

Manufactured under the Fiat Auto umbrella, Alfa Romeo joined the brand family at Tofaş and came to be represented by Tofaş in Turkey. Initially distributed by the Zeytinoğlu family in the early 1990s, Alfa Romeo’s transition to Tofaş ahd taken place in May. After the transfer, Tofaş primarily focused on after-sales services and the service units were put into action; trainings were offered, equipment and tools were provided. 20 service units were put into operation at first. Sales and marketing activities, on the other hand began in September at eight dealers and showrooms across Istanbul, Ankara, Izmir, Antalya, and Gaziantep. Serving as Deputy Director in Charge of Marketing at the time, Murat Selek’s statements on Alfa Romeo’s addition to Tofaş’s brand family were about future expectations: Selek predicted that sales and market shares would rise in an unprecedented manner and that Alfa Romeo, which was an important trump card for Tofaş, would not only add strength to Tofaş, but that the brand’s presence in Turkey would be solidified. Manufactured under the Fiat Auto umbrella, Alfa Romeo joined the Tofaş family of brands as of 2001

2002 AND TOFAŞ DRUMS IN

As of early 2002, the days of trouble were beginning to fade. Slowly emerging from the economic crisis, Turkey had been able to pull herself out of the financial bottleneck thanks to companies of export. Tofaş’s Doblò exports had allowed the company to emerge triumphant from the 2001 crisis despite all difficulties. A total of 684 million U.S. Dollars of exports were achieved and the company had manufactured 65 thousand 690 automobiles and 51 thousand 670 light commercial vehicles. 4500 people had been employed. These numbers would increase in 2002. Indeed, Doblò became the exports champion for the second time. Cars were being exported to 52 countries in the world, most notably in Europe. Fiat Auto had declared Turkey as the fourth strategic production center along with Brazil, China, and India. The production of the bird series was terminated for the domestic market, but exports to Egypt continued. Tofaş maintained its leadership in exports, but achievements were not limited to that. In 2002, Tofaş was the leader both in the sector and in production. On March 18 of 2002, Tofaş’s internal communications meeting, which included both Tofaş and its dealers and service organizations,

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experienced an unforgettable event. It was known that Jan Nahum would deliver a speech at the meeting. However, other things happened. Currently the factory manager of Simetrik Dizayn, Engin Algür was one of the R&D employees at the time; for him, like many other former employees, that meeting was among “unforgettable” memories: In 2002, we joined the convention at Mydonose Showland. It was not confined to factory employees; there was participation from all the service organizations as well. When we were admitted to the auditorium, it was dark inside and everyone was having a hard time sitting down, as the seats were full. As the clatter increased, the lights went on and we realized that there was a drum in each seat. No one could understand what was going on and to be able to sit, we all picked up the drums and kept them on our laps. The event proceeded with Jan Nahum’s speech. Suddenly, Jan Bey said, “Everyone pick up your drums now and begin to play” We all started playing in complete disharmony, unable to catch a common rhythm. After a while, Jan Bey interfered, “OK, stop!” he said. Then he turned to the Harem Group on stage next to him, had them start a rhythm and asked us to follow them. Soon, the entire hall was playing at a single beat! The message he was trying to convey was critical: the need to have a single voice, a single beat in order to become a good team… It was a very creative and striking scenario. This convention is among my most memorable moments in my Tofaş career and I still keep that drum is my house.

The surprises of the meeting were not limited to that particular event. 2500 people playing to the same beat of the Harem Group had made it into the Guinness Book of Records. . ” Two notaries had checked the signatures of all the participants to register the record and the results were sent to the Guinness Center in London along with video screenings. JAN NAHUM AT FIAT AUTO HE ADQUARTERS

In April of 2002, the CEO of Tofaş changed. Jan Nahum was appointed as the Chairman of the Department of Fiat’s International Business Development; he had become one of the four chairmen of the new organization centered on Fiat’s restructuring program. He was now in charge of all of Fiat’s operations in Brazil, Argentina, Morocco, Egypt, Russia, India, South Africa, Thailand, Vietnam, China, and Turkey. Hence, Fiat had put Nahum in charge of the markets in which it was planning to grow at utmost speed. Nahum was going to be responsible of where to manufacture a new model to be developed and where to market them.

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Jan Nahum had been appointed to such an important position at Fiat due to his vision. This international position was also critical for Turkey as well. He strived to implement the concept “one step ahead” while serving this position at Fiat. Jan Nahum served as the managing member of Tofaş between 1998 and 2002 he maintained his position as deputy chairman of the board at Tofaş simultaneously with his post at Fiat. NEW CEO ANTONIO BENE AND THE ALBE A L AUNCH

Jan Nahum was replaced by Antonio Bene, who had been the Industrial Director of Tofaş since March 1998. After having completed his education in elector-mechanic engineering in 1971, Bene had begun working at Alfa Romeo. He served as an Industrial Business Manager between 1982 and 1985 at Alfa Romea, and as Production and Project Director at Fiat Auto as of 1987. After 1997, he worked as Industry Director at Ferrari and had assumed the same position of Maserati as of July of the same year. ALBE A

Another important breaking point came for Tofaş in its year of championships in 2001; the concept work was initiated for a larger product that would replace the Siena. This kind of work was done for the first time and constituted an important step for the institution. The process extending from advancements at the prototype shop to having the new product approved by Fiat to start production marked a critical turning point in the history of Tofaş. The entire process culminated in the birth of Albea, introduced to Tofaş by its engineers and executives, who had made it their mission to shoulder responsibility for their company. The creation of Albea marked the beginning of the salon cars the production development of which Tofaş carry in the future. As the director that oversaw the birth of Albea, CEO Antonio Bene came to be recognized as one of the unforgettable names of Tofaş. Before he had assumed this position, he had faced some difficult days after the launching of the Palio. Siena had not been very popular in Turkey or the rest of the world. He had also been greatly moved by the laying off of hundreds of people to weeks after his arrival in Turkey. One evening, when he went down to the garage to get his car, he ran into someone tall and excited at the doors of the elevator. He grabbed Bene by the arm and started speaking rapidly, “Mr. Bene, why don’t we try doing something else? I have some ideas I would like run by you!” Bene was very tired but had begun to understand what the tall man was trying to say. The tall man convincing Bene to return to the shop that late in the evening

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In 2002, Antonio Bene became the new CEO of Tofaş.

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was none other than Mithat Ünlüaslan, a mechanical engineer who was working at maintenance at the time. “Turks like their cars wide; if you can seat three slightly overweight people comfortably in the back seat, the car will be a success!” he was saying. Bene understood what he was told. He began sketching on the piece of paper he found right there. Bene recounts the rest of the story: After hearing Mithat, I conjured up about a car the front of which would be narrower than the back based on Bravo, once a highly popular model. I sketched that on a piece of paper I found and gave it to Mithat. It was in fact strange and wrong to imagine a car like that. Of course, in those days Tofaş was much different; it had no design department. Moreover, we were going through a period of crisis. Fiat had the leadership of the project and it was based in Brazil. We did not have permission to design a product here. We could not even put our fingers on Siena and Palio, as those projects belonged to Brazil. I don’t know where I got the courage from, but Jan Nahum and I got to work together; we decided to set the idea of the new car on the Siena platform. We did not have the budget and approval for this investment. So, I pulled some strings and asked my former colleague at Torino to make some calculations. I asked another friend in the style department to correct the form of the car. In conclusion, we conducted the project without any expenses. I would see Mithat every few days; I would sketch something on paper and he would show me what he did based on these drawings. That’s how we completed the car. At some point, the upper management of Fiat had to be informed of what we were up to. Finally, we presented the style of the car in Torino along with the other models. The first three was

Albea, which created an important breaking point for Tofaş. Details of the Albea.

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a “re-styling” of the Siena and the other was our Albea—narrow in the front, wide in the back. At first, it was not much admired, to be honest, because they did not believe in it. But in the final analysis, we agreed to manufacture the car exclusively in Turkey. Countries like China and Italy would continue to buy the Siena manufactured in Brazil. So, for the first time, Tofaş did the renewal of a car on its own. Albea was just like a woman trying to cook up a new recipe with what she had at home, without buying anything new from the market. I would begin work every day before morning prayer. One of the things I remember best is always seeing Mithat at the end of a 14-hour workday.

Immediately after Antonio Bene’s appointment as CEO, the launch of the new Fiat Palio and the New Fiat Palio weekend was made on April 10th and 11th along with Albea, the development of which

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had begun the year before and the production in 2002. Following the introduction to the press on April 10th, a meeting was held at the Sabiha Gökçen Airport with the participation of dealers. Antonion Bene presented the car as follows: “Albea was born in Bursa. An Italian word, albea means sunrise in Italian. However, I prefer the word cemre, one of the three fireballs that come from the heavens to warm earth at the end of each winter as the harbinger of spring in Turkish-Islamic folklore. Albea is Tofaş’s cemre.” “We had an opportunity at the time,” says Antonio Bene, “and that was the low-consumption, but considerably powerful engine that Fiat had been working on. I combined our vehicle with this engine.” At the time, almost all the taxis in Istanbul were Şahins; the Albea began to replace to old taxis. The car’s successful promotion began with the taxi movement. As one of the heroes of the Albea, Mithat Ünlüaslan was, in his own words, was a mechanical engineer with a “passion for cars to an extreme.” In speaking of Tofaş and Albea in particular, he says, in a trembling voice, is “proud to have had a finger in the pie.” I told them, let me make you a cost-free car. Quickly, as an alternative, I built several cars that contained all the solutions Italy could not refuse, based on the Siena…. The project was duly named Grande Siena. And Grande Siena was Albea… If you are going to build a new car in this segment, you have to make everything from scratch. But everything the car needed was here; the entire investment, engineering… The part we don’t see but step on in a car is the point of the most critical engineering. That was preserved. You can squeeze in three people in the back of a car, but if you expand the back by 10cm, you’d be surprised how much space you get. We enlarged the car by approximately 108 mm. And 3 cm in the front… Normally, the front and back of a car are the same width, or the car narrows towards the back. Ours had a wider back; we did the exact opposite. Antonio Bene said, “This method has now become Fiat’s know-how!..” Later, new models were manufactured using this method. Albea is the world’s first car with a wider back than the front. We thus obtained a trunk that had a much bigger volume than its competitors: 500 liters!..

Know-how, research, production of technology… Tofaş took very important steps towards the accumulation of know-how and transforming that into production, as the most important investment into the future. The importance Tofaş paid to R&D culminated in the creation of Albea. Orhan Alankuş believes that Albea played a significant part in Tofaş’s acquisition of the MiniCargo project.

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Mithat Bey worked selflessly day and night with his friends on the prototype team to build this prototype. This was a critical innovation. It was the kind of work we don’t encounter in the automotive sector. Particularly through the support of Jan Nahum, Antonio Bene presented the work to Fiat. It was accepted with certain modifications. The body prototype was prepared in a week and sent to Italy. Hence, Albea was born. It was an important achievement that augmented the prestige of Tofaş’s R&D and led Fiat to give the MiniCargo project to Tofaş. At the end of this work, Tofaş R&D was given access to Fiat’s project norms, along with the opportunity to review Fiat’s accumulation of knowledge over a hundred years. Tofaş R&D began joining Fiat’s Technical Department meetings. A step was taken towards becoming a Seat Excellence Center. As part of this objective, seat development and integration know-how was created at Tofaş. A work group was put together with METU and a seat crash test center was formed with the support of the Ministry of Development. Some new seat development projects came to life with the Tofaş R&D coordination.

Highly popular among taxi drivers, the production of Albea ended in 2011. Including exports, 201,111 cars were manufactured. DIVERSE AC TIVITIES AND THE TOFAŞ MUSEUM OF CARS AND ANATOLIAN CARRIAGES

In 2002, Tofaş began publishing the “homing pigeon” Tofaş Gaztete (gazette) in order to communicate all developments, information, and plans to employees and to strengthen internal communications. Another thrill was the visit famous German pilot Michael Schumacher paid to Tofaş. As the pilot of Fiat Auto’s champion team Ferrari in Formula 1 races, Schumacher, was in town for the first showing of Fiat Palio’s new commercial. He appeared before automobile enthusiasts in the garden of Çırağan Palace. He visited the production lines in the factory and test-drove the new Palio models in the garden. The same a beautiful haven was born in the corners of Bursa: the Tofaş Museum of Cars and Anatolian Carriages was inaugurated on June 28, 2002. As Tofaş’s token of appreciation to Bursa and the masters who laid the groundwork of Bursa’s automotive industry, this unique corner changes your mood and your world the instant you walk through the doors, takes you away from the city’s chaos and puts you in the middle of a completely different tale… The tour begins with a tranquil garden filled with a 300 year-old sycamore, 200 year-old mulberry, trees, and flowers and continues through a time tunnel inside a beautifully restored building. The growth and development of the car is presented with a car built 2600 years ago and re-enacted by Bursa car builders, wheels,

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vehicles with and without engine—a story that extends from the wheels to its current state is presented as part of a story unique to Bursa. You take great pleasure in viewing this development as part of its modern display. When walking back and forth between colorful wooden carts and the first Murat cars, you feel the need to go back and begin the tour again. Yet, other places wait for you inside the museum; you can tour any one of the temporary exhibitions held at the Umurbey Hamam within the complex outside the main building. The diversity and volume of the collections will put you in awe. Next, you will enjoy a short break at the Fayton Café designed uniquely for this museum in the rest areas, which have nowadays become an integral part of modern museology. As you appreciate the creation of this special corner in Bursa and wish for such sanctuaries to increase in number, you won’t spend much thought on how difficult it was to build it. Why should you? Nevertheless, you can rest assured that if you take someone by the arm one day and take her to visit a place she has not seen before, that will certainly be your contribution towards holding this place up and alive… Tofaş’s initiative had been a gain for the cultural life of Turkey, no doubt. Creating a museum on a theme that befits its name and production and displaying the historical process of the car from carts with wooden wheels to industrialization in a comprehensive museum environment was well suited for an institution that had become an integral part of Bursa. The museum was founded across a total area of 17, 318 square meters inside a former silk factory that had been restored to its former glory in the Umurbey quarter of Bursa. The building’s story is worth

Schumacher speaks at the Fer Mas event. Opposite page: Umurbey Hamam used as the exhibition hall of the Tofaş Museum of Cars and Anatolian Carriages in Bursa.

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of note: With cocoons and mulberry trees in its garden, the silk factory belonged to the İpeker family in Bursa, which had been an important commerce and production center on the historic silk road for centuries… Sometime later, young inheritors of the İpeker factory wanted to build an apartment on the property. Having served his quarter for 33 years without any opposition in elections, the muhtar of Umurbey, the late Erdoğan Uçarsu, who unfortunately didn’t live long enough to see the days of the museum, did not have the heart to see this historic building destroyed. The Mayor of the period Erdem Saket did the best he could and after allocating another property to the İpeker Family, kept this one in the Municipality. The establishment of the museum on this property came about as follows: In 1997, Prof. Önder Küçükerman wrote the book Anadolu Tasarım Mirasının Ayak İzlerinde Türk Otomotiv Sanayii

The display areas of the non-motorized and motorized vehicles at the museum.

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ve Tofaş (The Turkish Automotive Industry and Tofaş in the Footsteps of the Anatolian Design Heritage) and, along with then-CEO of Tofaş Jan Nahum, they initiated the preliminary works for the creation of a Museum of Cars and Anatolian Carriages. Jan Nahum’s friend of 25 years Master Architect Naim Arnas was working with the Bursa Museum of Archaeology at the time. Having dedicated many years to collecting, Arnas was thrilled by the idea of a museum. First, a project was designed to launch the museum at the Tofaş factory. However, it was thought that the former silk factory, which the Municipality was planning to transform into an Information Park, would be much suited for the museum and an agreement was reached with the Municipality. Tofaş signed a protocol with Bursa Metropolitan Municipality and the decision was made to display the footprints of Anatolian design heritage in this old and famous center of silk.

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The museum sought not only to claim its own heritage and share it, but by displaying a plethora of products extending from traditional accumulation to innovations made in the recent industrialization period, also wanted to create the correct and proper perception of the entire process. The content was thus designed accordingly. Different cars were found in many cities of Turkey including Erzurum, Sivas, Edirne, and Konya; upholding his father’s craft, car and horse carriage repairman Mustafa Babik restored the cars one by one and gave them new life. Landscaping was completed on the property and the historic fabric was protected in the process. The inauguration of the museum assumed its place among the unforgettable days of Tofaş history. The local and international press was greatly interested in the opening; along with Tofaş executives and founders of the museum, former Minister of State Recep Önal, Bursa Governor Ali Fuat Güven, Mayor Erdoğan Bilsener were among the guests. The ceremony began with Tofaş CEO Antonio Bene’s speech: Humans are part of their ancestors. All the traditions and customs, faiths, laws, ideas, events, and wars of the past are written in history and are learned from history. Today, we are displaying here the story of a simple wooden wheel that began turning in Asia thousands of years ago, its journey across Anatolia, and the colorful changes it has undergone until reaching the present-day automotive industry of Turkey… As the leading edge institution of the Turkish automotive industry, we, at Tofaş have shouldered this important project in order to claim the accumulation of traditional heritage, to keep it alive, and to transmit it to future generations in the best possible way.

Antonio Bene further added that Bursa was among the key centers of the automotive sector and that it was no coincidence, as history revealed, that vehicle production began in Bursa thousands of years ago and that this accumulation of know-how from the past was kneaded in time to transform the city into a center that manufactures for and markets cars to the rest of the world. He also noted that the most important mission of Tofaş was to manufacture world cars on which Tofaş and Turkish engineers would have the last word at every stage from design to production. Recep Önal also stated that the museum Tofaş established in Bursa also assumed a historic mission, adding, “On behalf of culture enthusiasts, I would like to thank all of those who bring back to life Anatolian cars in danger of extinction.” Erdoğan Bilenser, on the other hand noted, “Built by the social responsibility consciousness of Turkey’s first and largest automotive factory Tofaş, this museum will be run by Tofaş for the next 30 years. We will do our best to ensure that the museum is maintained with its environment,” signaling that the Municipality of Bursa would take on that mission.

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Prof. Önder Küçükerman, on the other hand, explained the main idea behind the museum: The sources of a real industry are very deep. The automobile industry is much like old traditions; it has profound connections with customs of cities. Almost everyone in Bursa knows about cars. Three generations need to come together for such a deep-rooted industry. In that respect, Bursa is an important example, as it preserves, upholds and develops the experiences and know-how of the past. It has meticulously protected a very powerful knowledge earned over centuries. Tofaş Bursa Museum of Anatolian Cars is not only a museum of antique cars; they are the living, key cornerstones of the thousands of years of automobile industry and culture of Anatolia… This is the token of appreciation new masters extend to the old.2

CHAMPION CARS IN BOTH SALES AND R ACES

Tofaş’s sectoral leadership continued throughout 2002 with Doblò, along with Albea and the newly designed Palio. The three vehicles carried Tofaş to championship in sales. Albea presented a high sales graphic in the C segment, whereas Fiat Palio became the leader of the B segment. The project stage of the Palio Kit Car adopted to Fiat’s Super 1600 category was completed in Turkey and at the end of the three yearlong research and development works, the Palio Kit Car was prepared in 2002 to become the best super 1600 car in the world. Palio Kit Car was a racecar initiated under the leadership of Tofaş-Fiat motor sports development director Saffet Üçüncü and developed entirely by Turkish engineers. Along with this news, another championship came from motor sports in the final months of the year: Palio Super 1600 entered the world of motor sports in the Anatolian Rally. In the same rally, Fiat Abarth Motorsports team also announced its 2002 Brand Championships. Racing with the Fiat Punto Kit Car, Volkan Işık-Levent Gür left behind their closest rivals Nejat Avcı-Özden Yılmaz in the highly challenging race that lasted four days and not only won the race, but also earned the championship for the season. Having won the Turkey F3 championship in the last two years, Fiat Abarth Motorsports had won the championship for the third consecutive time when it resumed motor sports in 2000 after a nearly twenty-year break.

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Önder Küçükerman, Anadolu Tasarım Mirasının Ayak İzinde Türk Otomotiv Sanayii ve 40. Yılında Tofaş 1968-2008, Istanbul 2008, 294.

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FIAT LOSES ITS EMPEROR

Having enjoyed a highly successful year in 2002, Tofaş was shaken by the sad news of the death of Giovanni Agnelli, the Honorary President of the Fiat companies, who died on January 24, 2003 in Torino at the age of 81. Excerpts from the article Former Vice Chair of Koç Holding Board of Directors Can Kıraç wrote on the Agnelli family for Tofaş Gaztete sheds light upon the past years, the initiatives of the family, and their relations with Turkey:3 As the Honorary President of the Fiat companies, Giovanni Agnelli had contributed to the establishment and growth of the automotive industry not only in Italy but in Turkey as well; he had significantly aided in taking long strides with his vision. As part of my position in the company, I had participated in a number of meetings with him and had been influenced by his charismatic personality. Giovanni Agnelli was indisputably one of the leading industrialists of the 20th century. … His grandfather Giovannli Agnelli, Fiat’s founder known by the epithet “Senator” and thirty founding partners had signed the documents that brought to life the company Fabbrica Italiana Automobili Torino on July 11, 1899 on a misty morning in Torino, laying the groundwork for the Fiat Empire, this initiative. At the turn of the 19th century, an entrepreneur named Giovanni Agnelli had set out, at the ripe age of 30, to pioneer the establishment of the automotive industry in Italy with others who were ready to share his dream. The Agnelli family that began with “grandpa” Giovanni Agnelli in 1866 is known a clan of more than 200 members. I sincerely hope that the expectations of Giovanni Agnelli, who left his imprint on the industry of Italy and all of Europe, will bear fruit. With these sentiments, I would like to share with you a memory that summarizes Agnelli’s relationship with Vehbi Koç. Tofaş’s establishment in partnership with Italy’s famous Fiat Company had introduced Vehbi Koç to Giovanni and Umberto Agnelli brothers and to the birth of a mutual relationship of “understanding” between Koç and Giovanni Agnelli. Although there were almost no similarities between Agnelli’s upbringing and introduction to the business world and Vehbi Koç’s life and line of success, both men were the absolute owners of their own empires in their respective countries! As the only son of a self-sufficient family by Ankara standards, Vehbi Koç had set out to work as an assistant at the grocery store in 1917 when he was 16. Born 20 years later than Koç in 1921, Giovanni Agnelli had lived the “jet-set” fast life until the age of 45 in hotspots like Monte Carlo and Fiat’s founder Giovanni Agnelli passed away in January of 2003.

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Saint Moritz, made fast friends with “playboys” like Ali Khan and Rubi Rubirosa, dating famous actresses such as Anita Ekberg. In order to maintain this lifestyle, he had an expense account of a million dollars per year, by Agnelli’s 1950 standards. When he moved out of the tabloids and moved into the chair of the Fiat board in 1966, Giovanni Agnelli was 45 and had the weight of the fast life on his shoulders. As Vehbi Koç was having dinner across from the new boss of Fiat, “How did this man do all that?” he was thinking to himself and was trying hard to conceal the expression of surprise on his face. When introduced to people of fame, Vehbi Bey would try to understand their life philosophy and, next to their interests, try to understand the secret of their success, if there was any. Prior to this meeting, he had listened to the life story of “grandpa” Agnelli and had been surprised and impressed to hear that the Fiat Company was established four years before Henry Ford’s factory in Dearborn, in 1899. Giovanni Agnelli would look straight in the eyes of the person he was talking to and carried the lines of a gratifying life in his face; when Vehbi Koç asked him, “How do you spend your day?” The answer he received was quite different than what he expected. Nicknamed “avvocato” (lawyer) by his friends, Agnelli tried to satisfy Vehbi Koç’s curiosity with these words: “I lead a very busy life. I wake up at 6 in the morning. The first thing I do is to sip my coffee and read the important news in the paper. Then, I do my daily gymnastics. Wherever I am in the world, I talk on the phone with the colleagues I deem important. If I’m in Torino, I’m at my desk by 8 AM. I drive my own car and my driver sits next to me. I am a fast driver. I drive from Torino to Milan in a half hour with a Ferrari. I save time by using a helicopter or a private jet. I work 14 hours a day and sleep for six.” As Vehbi Koç listened to my translation, he couldn’t help saying, “This man really lives a fast and expensive life!” … I bow with respect before the memory of Giovanni Agnelli, who made significant contributions to the growth of the Turkish automotive industry with his company, his executives and his strong leadership. Koç Holding Former Vice Chair of the Board Can Kıraç

Currently the president of FCA, John Elkann is the grandson of Giovanni Agnelli.

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MUSTAFA V. KOÇ BECOMES CHAIRMAN OF THE TOFAŞ BOARD

During the 35th Ordinary General Meeting of Tofaş’s 2002 activities, Mustafa V. Koç was elected as the new Chair of the company’s Board. Koç took over the position following the resignation of Suna Kıraç, who held this post for five years. Jan Nahum, Temel Atay, F. Bülend Özaydınlı, Aydın İ. Çubukçu, Maurizio Magnabosco, Camillo Rossotta, and Giorgio Fossati were chosen as the other members of the Board at the end of the Ordinary General Meeting. A FIRST WITH THE HYBRID DOBLÒ

The Hybrid Doblò was registered as the first hybrid vehicle in Turkey. During the period in which automobile manufacturers becoming interested heavily with vehicles with alternative systems because of the diminishing oil reserves in the world, Tofaş presented to Turkey the financing and infrastructure of the first hybrid car produced in the country: Developed as a part of the research conducted by TÜBİTAK Marmara Research Center, Tofaş and Fiat Doblò names became associated with development activity. Presented to the press and public at the ceremony held in the TÜBİTAK-MAM Convention Hall on July 16th, the production of the Hybrid Doblò had been underway for 11 months since August 2002 under the name Elit-1. This was followed by the Elit-2 parallel hybrid study, the feasibility study of which had been completed in 2004. In charge of Tofaş R&D’s electrification projects, Can Gökçe summarizes the work and the excitement it caused at Tofaş from that period to date as follows: New technologies are carried from prototypes or concept vehicles to mass production and daily use through an arduous process that moves step by step. Before they are brought to the light of day, they go through an extended incubation period. However, most people suddenly see the fully completed vehicles and do not know how they got to that point. Meanwhile, of course, we continue to work in the background for electrical cars. Our studies on electrification gained momentum with the company called Mekatro established in the free-zone in Gebze as a Tofaş supplier with the participation of the ITU-based team with which we won many Formula G races as of 2004. At Mekatro, we worked on the electrical engine and energy management, as well as basic control software. We produced various prototypes working with electrical engines and ran tests. Later, the studies were made part of R&D. We co-developed an engine with Arçelik; we built a hybrid solution that had electrical engines in the back wheels of the Linea. With a supplier, we developed

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an on-board charging device. The production of a vehicle entails the development of our suppliers as well. Otherwise, the work that’s done does not attain industrial production credentials. Meanwhile, “micro-applications” that have today become quite common were initiated in mass production. In 2007, the Fiorino went into production with the start-stop mechanism. When the vehicle was promoted for the first time at the beginning of production, I recall having difficulty convincing some people that the engine stopping at a red light would restart on its own. Later, we continued working on electrical engine, driver systems, charging units, cordless charging, and electrical vehicle brake systems; many of our colleagues chose these topics for their Master’s and PhD dissertations. In order to be part of the latest developments in technology, we take part in EU-supported project as well. We worked on the design of different electrical vehicles. We have readied our fourth generation of Doblòs developed in 2016 and gave them to our customers for test-driving before putting them on the road. We continue improvements with the feedback we receive from them. Commercialization is the final stage or product development; however, the market is just starting to get ready for it. There is much to do on infrastructure, inner-city and inter-city transportation. A few years ago, the number of charging stations in the Netherlands was more than the total number of electrical cars in the country. We still have a long way to go in Turkey. In the course of improvement and development studies, we had the opportunity to observe how customer perception on electrical cars changes. For me, this means bearing witness to a historic period. At the beginning of the 2000s, interest in the subject was limited solely to academic and sector-related circles. Today, however, the range of possibilities draws the attention of all users. When we test-drove our first electrical vehicle prototypes, when drivers were uncertain about the car’s performance, they would hit the accelerator; the expression of fear on their faces when the vehicle accelerated far more than they could imagine, we could not help but smirk and draw motivation from that. Nowadays, people interested in electrical vehicles are far more knowledgeable about technical specifications; they describe what they do and their needs, offer their views and suggestions. This kind of feedback is a driving force for us as well. We continue with our work to bring together customers and electrical vehicle technology at the most accurate point.

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“GOODBYE ANTONIO BENE , HELLO DIEGO AVESANI”

CEO Antonio, Bene, who made significant efforts to crown Tofaş with a series of accomplishments in 2003, was appointed to another position in the Fiat group. Continuing his professional contacts in Turkey, Bene never severed his ties with his friends here and became one the most beloved Italian executives of the Tofaş world. Making people smile with even the mention of his name, Bene’s old friend Nezih Olcay remarks, “Antonio Bene is from Napoli. They are very warm people. Bene was very kind person, as well.” Antonio Bene yielded his position to new CEO Diego Avesani on February 1, 2004. From 20002 to his appointment to Tofaş, Avensi had worked as the production and development director of Fiat International Business Department. Born in Verona in 1950, Avesani is an electronic engineer. Between 1977 and 1996, worked in different position in production and technology at Fiat Auto SpA and was appointed as the CEO of Fiat Auto Poland in 1996. Later, he worked as the platform director at Fiat Auto – Mirafiori. He had strong strategies for 2004 and trust in Tofaş teams: There are no obstacles in the way of Tofaş to pursue higher goals and to be among the leading automobile manufacturers of the world. When I met the employees, I noticed how gifted and professional they are. The combination of talent and the superior technology of Tofaş will culminate in greater achievements.4

ANOTHER LOSS IN THE AGNELLI FAMILY

Approximately a year after Giovanni Agnelli’s death, Chair of the Fiat Executive Board Umberto Agnelli passed away on May 28, 2004. Agnelli’s loss caused great sorrow, both in the Italian industry and in the rest of the world. Having been established in 1899, the Fiat Empire had expanded with the vision of Giovanni Angelli and the people who shared his vision of developing the automobile industry in Italy. The joint venture of Fiat and Vehbi Koç to establish Tofaş had allowed Vehbi Koç to meet brothers Giovanni and Umberto Agnelli. The business relationship that began in 1968 was nearing its 40th year. Over the years, the efforts and hard work of the members the Turkish automotive world and the collaboration between Vehbi Koç and the two unforgettable names of the Agnelli Empire had culminated in a giant name in industry. As this rare and valuable relationship continued with the successful projects of the Fiat-Tofaş partnership, the ties between the families were being transferred to a younger generation.

In early 2004, Diego Avesani took over the CEO position at Tofaş.

4 Tofaş Gazette, “Tofaş CEO Diego Avesani: We have strong strategies for 2004!”, 21/2004.

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FIAT CARS OF 2004

Fiat Panda’s entry into the Turkish market took place in the May of 2004. The press conference was held at the Italian Consulate on May 25th. It was introduced to the market as the Italian fire; with its design, features, comfort, safety, and price, it made an ambitious entrance into the market. Avesani “In a market such as Turkey in which the larger part of the sales are made in the upper segments, we are presenting a challenge by releasing the Fiat Panda, in a smaller class.” It was believed that a new concept of cars would emerge. Fiat Strada was released as the new pick-up of the roads in Turkey. It was the first Fiat pick-up to be put on the market in Turkey and after Ducato, Doblò, and Palio Van, it had arrived as a new model completing the commercial vehicle spectrum. It was thought that electronic appliance dealers, florists, market vendors, and bottled water distributors in touristic areas in particular could easily use the pick-up. Promoted as Fiat’s provocative model, Idea was introduced to the public in Turkey for the first time at the Autoshow in November. With this model, Fiat was getting ready to have a share in the MPV or Multi Purpose Vehicle segment. It was equipped with technological features that made life easier. With its comfort of driving, large trunk, spacious interior, and soft lines, it was getting ready to appeal to younger drivers, women, and expanding families in particular. ANOTHER CHAMPIONSHIP IN MOTOR SPORTS

Organized by Hürriyet Otoyaşam newspaper, OtoBil was the largest automobile race of the year. The jury of the race would select the most preferable cars after test-driving them. Fiat won first place in every segment it was nominated for with Fiat Palio, Fiat Albea, Alfa 147 and Alfa 156. The biggest news of the 2004 motor sports activities was Fiat Motor Sports Fourth Super 1600 championship. Racing with the racecar Fiat Palio Super 1600, conforming to the international standards, and strongly believing in teamwork, the Fiat Abarth Motorsports embraced the Super 1600 trophy for the fourth time. The teams were as follows: Fiat Abarth Motorsports Team Coordinator: Emin Ali Sipahi Pilots: Volkan Işık - Erkan Gülerhan: Fiat Punto Super 1600 Hamdi Ünal - Kaan Özşenler: Fiat Palio Super 1600 Süleyman Atay - Güray Karacar: Fiat Palio Super 1600 Selim Bacıoğlu - Murat Sümer: Fiat Palio Kit Car What would this championship bring to the Fiat brand? Team pilot Hamdi Ünal answers that question:

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Fiat is one of the oldest brands in our country and Palio Super 1600 has proven its performance. Furthermore, Tofaş lends the biggest support to this sports branch in Turkey. As motorsports become increasingly popular, these wins increase the affinity for this brand. Motorsports constitute a real arena for automobile manufacturers and achievements made here are inscribed on the plus column of the brand… The young generation needs more awareness about this. Their passion for speed is a reality, but the insensible use of a car is akin to walking around with a loaded gun in your hand in the middle of the city. I believe that in order to prevent that gun from blowing up, young people must be given a chance and must be pulled to the racetracks.5

Can there be a better description of the importance of learning how to be organized, aware, systematic, and controlled in motor sports? Team coordinator Emin Ali Siphai summarizes the advantages the collaboration with R&D has on normal automobiles and how races benefit from that collaboration: Tofaş is a giant name that fulfills all corporate responsibilities, not only in motorsports, but also in the sports and social development of our country. This season, the move of our motorsports shop to the Tofaş Factory has generated great advantages for the team and the technical staff. We found the opportunity to work under better conditions in a spacious area prepared for us. Furthermore, we were able to receive all the support we needed from the factory. The support lent to us from R&D and other departments helped us reach our goals and to leave our rivals behind in the technological sense.6

“FROM DRE AM TO RE ALIT Y ”

Between October 7 and November 7, 2004, an exhibition was organized through the contributions of Tofaş by the Automobile Industry Association (OSD) and Rahmi M. Koç Museum. Entitled, From Dream to Reality: 50 Years of the Turkish Automobile Industry, the exhibition included the cars that constitute an important milestone in local production ranging Devrim automobile to Anadol, from Turkish Willys Jeep to Murat 124, memorabilia, and documents. The exhibition came to life with the contributions of automobile manufacturers that hold in important place in the sector that emerged with the establishment of the Tuzla Jeep Factory. In addition to automobiles, spare parts and accessories, old automobile ads, newspaper ads, old license plates,

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Tofaş Gaztete, 30/2004.

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Tofaş Gaztete, 30/2004.

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essays on automobiles, photographs from old races, trophies, and medals were also displayed. A design competition was also organized in collaboration with Mimar Sinan University’s Department of Industrial Goods as part of the exhibition. Last but not least, an exhibition book entitled, 50 Years with the Turkish Automobile was written by Prof. Önder Küçükerman.7 MINICARGO

Breaking consecutive records in exports and production over the past few years, the automotive sector attained an even livelier market in 2005 due to the economic and political stability and despite the rise in taxes. As one of the leaders of the sector’s growth, Tofaş’s growth, particularly as exports champions, continued. In the light commercial vehicle market, for example, Fiat reached its sectoral leadership with its most important weapon—namely the Doblò Cargo. Renewal continued at Tofaş. In February, the new Fiat Albea was presented to customers with its new image. As one of the bestselling passenger cars in Turkey, Albea’s interior design and outer appearance had become much more attractive. There were both gasoline-powered and multijet diesel options, thus it could also meet the needs for comfort and low consumption cost. The new Albea was the biggest surprise of the 2005 Fiat Dealer Convention organized in February. However, speaking on the third day of the convention, CEP Avesani made a statement concerning a new investment on the horizon and hinted at yet another surprise. The first signs of this investment were given out when Fiat Auto and Peugeot Citroën signed a letter of intent on initiating feasibility works on a new light commercial vehicle to be manufactured at the Tofaş Factory. This massive project for the production of a new model would constitute another first. In fact, the project was even regarded a revolution for the Turkish automotive industry: On March 31, 2005, Tofaş signed a cooperation agreement with the three giants of the world automotive sector, namely Fiat, PSA Peugeot, and Citroen, for the development of the MiniCargo project, a new light commercial vehicle that would be manufactured in Bursa and exported by 95%. The project entailed a 350 million U.S. Dollar investment and a production of 165 thousand cars per year. It was the continuation of a successful path that had begun with the creation of the Doblò and would carry the capacity and competence of Tofaş to a much higher level. These projects consequently created their own segments in Turkey and in Europe and constituted examples in popularizing the concept of multi-purpose vehicles. 7

Önder Küçükerman, Anadolu Tasarım Mirasının Ayak İzinde Türk Otomotiv Sanayii ve 40. Yılında Tofaş 1968-2008, Istanbul 2008, p. 335.

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All the executives speaking at the press conference were excited; they all conveyed information about various features of the project. Tofaş CEO Diego Avesani was certain that the project would be a turning point for Tofaş and Turkey:8 As we multiply our numbers in exports with this project, we will also expand our strength in the Turkish automotive market. Moreover, as 95 percent of the 135 thousand cars to be manufactured will be exported, Tofaş will sit in the leadership chair of exports. The new vehicle will not only contribute towards the capacity use of the Tofaş Factory, but it will also lead to new employment opportunities in the supply network. With production starting in 2007, we will continue to be the leaders of the Turkish automotive sector.

Fiat Auto’s CEO Sergio Marchionne also confirmed that the MiniCargo would bring leadership in the segment; he further emphasized that the successful collaboration between Koç Holding and Fiat would reach a turning point with this project and the same was true for Fiat Auto and PSA Peugeot Citroën. He added that the light commercial vehicle segment would soon gain importance in Europe and that Fiat was planning to lead the way in the growth and expansion of this segment. PSA Peugeot Citroën CEO Jean-Martin Folz also stated that they were happy to be part of the longstanding collaboration between Fiat and Tofaş:

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Tofaş Gaztete, 35/2005.

This page: PSA Peugeot Citroën CEO Jean-Martin Folz, Chair of the Tofaş Board Mustafa V. Koç and Fiat Auto CEO Sergio Marchionne at the press conference of the new light commercial vehicle MiniCargo. Opposite page and following pages: Doblò Cargo with which Fiat became the leader of the light commercial vehicle market in 2004.

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We were able to establish trust with a common vision for the product, a common agenda, and mutual understanding. We believe that we will be able to meet emerging needs and the demands of urban life with our new commercial vehicle. It gives us pride to see the collaboration of three giant companies against the threats of globalization. We strive for our customers to be the most beneficial party in this collaboration. The consumer must be the winner.

Chair of the Koç Holding Board of Directors Mustafa V. Koç, on the other hand, believed that the project was relevant to the future of Turkey: With its strategic geographical location, reasonable cost structure, and high production quality, Turkey has become an important center for production in recent years. The investment project we are happy to share with you today is a direct consequence of these developments. Tofaş has succeeded in becoming a production hub for its global partner Fiat Doblò; with exports that began in 2000, it took on the title of exports champion of Turkey. The MiniCargo project will intensify Turkey’s and Tofaş’s production center role in the international market. This project will also help Koç Group achieve its growth objectives and strategies.

Giovanni Agnelli’s grandson and current Chair of the FCA Board, John Elkann was also in Turkey for the signature ceremony of the MiniCargo project. The signature ceremony took place on March 31st, but another surprise awaited Elkann at the factory in Bursa on April 1st: It was his birthday and Tofaş welcomed him with a birthday cake. He never forgot the gesture; even today, when the Tofaş name is mentioned, one the memories he recalls is the celebration of his birthday on that day: Spanning three generations and the production of tractors, passenger, and commercial vehicles, the partnership we established with the Koç family is one of the longest-standing partnerships in the history of our Group. This collaboration has led to special relationship between my family and Tofaş, and with Tofaş and myself on a personal level. I remember very well the visit I paid to the Bursa factory on April 1st, the day of my birthday, several years ago. I had clearly felt that we were celebrating not only my birthday, but the true and close ties our families had established over the years as well.

There is no doubt that the experience and production power Tofaş had gained over the years was instrumental for the company to undertake the MiniCargo project. Nezih Olcay’s evaluation confirms this view:

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Tofaş had already brought Doblò to life and now it had the power to undertake this project as well. The important thing here was the involvement of Peugeot and Citroën. France had more demands than Fiat in the MiniCargo project. The combination of demands had made the whole thing more complicated. However, Tofaş had the selfconfidence and experience to complete this project. That is why this challenge was easily overcome. In the end, it lent Tofaş a different experience.

Let us dedicate a special place to the R&D activity of the MiniCargo and hear Orhan Alankuş explain why it is important: The MiniCargo project was an important turning point for Tofaş. A project of the partnership of Peugeot with Fiat Auto, product costs of the project had to be competitive on a global level. At the same time, the investment costs had to be low. Tofaş R&D worked intensively to bring the product cost down to the levels observed in countries such as Brazil and South Korea. The vehicle costs, part designs, etc. were meticulously studied at the product comparison shops and design proposals were prepared. Cost targets per part were created for these designs, a globally competitive cost was calculated, and the purchasing unit was given the necessary support to convince the suppliers. Another important point is that a successful and low-cost production process had to be managed for the new segment vehicle, a first in the world, the majority of the design of which would be completed by the R&D of Tofaş. Therefore, it was important for all R&D employees, purchasing and quality units, as well as the supply chain to work physically together with the R&D engineers. The most opportune place for that was a techno park. An R&D company established by Tofaş would help collocate also R&D teams of suppliers and perform efficiently. Therefore, Tofaş supported the efforts to establish a techno park at Uludağ University. The Platform Company was established there with more than 200 R&D employees meticulously identified from Italy and Turkey. The testing and launch activities were under the responsibility of Tofaş R&D. The R&D, and technopark inc entives by TÜBİTAK played a critical role in product development for rendering development, cost competitive and the launch this project from Turkey. This had been the first of the projects in which all project rights belonged to Tofaş. Tofaş R&D team nearly of 50 members strong when started grew to 350 by the end of the project.

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CHANGE OF CEO AT TOFAŞ

Having served as CEO since yearly 2004, Diego Avesani yielded his post to Alfredo Altavilla in July of 2005. Avesani was going to return to Italy to start a new position at Fiat Auto. In the farewell party organized for him, he stressed that every day he spent at Tofaş was of great importance. The agreement we signed on March 31st regarding the MiniCargo project was a turning point, not only for Tofaş, but for the entire automotive sector as well. This mutual agreement of production is an indication of the highest standard and quality level the Turkish automotive industry has attained. I would like to extend my heartfelt thanks to all Tofaş employees, both for this project and for all the other projects we brought to life during my term at Tofaş.

Alfredo Altavilla’s career at Fiat Auto had begun as an analyst in 1990. He worked in the fields of strategic planning and product development between 1992 and 1995. In 1995, he became a representative at Fiat Auto China. He served as the director of Asian countries in 1999 and directed on many projects, most notably the creation of partnerships with General motors and Peugeot Citroën between 2000 and 2004. In 2004, he was appointed as VP in charge of Business Development and Chairman of the Fiat-Powertrain Board. FER-MAS OTO TICARET IS L AUNCHED

One of the most important events of July 2005 was the inauguration of the Kuruçeşme complex of the FerMas Oto Ticaret founded for the distribution of Ferrari and Maserati brands with the participation of Tofaş. Ferrari General Director and Ferrari Formula 1 Ream Captain Jean Todt and Michael Schumacher also joined the opening. Altavilla was a member of the Maserati Board in addition to his new position as the CEO of Tofaş. Regarding this new initiative, Altavilla had observed that Turkey was an important market:

Alfredo Altavilla took over the CEO position at Tofaş in 2005.

Turkey is taking steps to becoming one of the most important centers of Europe in every aspect. Being the host of the Formula 1 races for the first time this year is one of the clearest indications of that. I believe that the affinity for Ferrari that goes hand in hand with Formula 1 in the world is also prevalent in Turkey. We are certain that we will benefit from this sympathy not only in the commercial sense through this new establishment, but also through our relationship based on mutual trust.

On the day of the official opening, the vehicles at the showroom were sold out; marked by the high interest in the brand, this unforgettable anecdote demonstrated the faith and trust the existing

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Founded as a subsidiary of TofaĹ&#x;, Fer Mas Oto Ticaret went into operation in 2005 to distribute the brands Ferrari and Maserati.


and potential Ferrari-Maserati customers in Turkey had in Fer Mas. In the ensuing years, the Fer Mas team continued to raise the bar; in 2014, the team received the “Fastest Growing Brand” award in Turkey with the Maserati brand and in 2013 and 2105, it was awarded the “Best of the Best” prize from Maserati in Italy. Finally, in 2017, the Ankara, Antalya, and Bursa dealerships were launched in order to spread the dealer organization across Turkey with the Maserati brand, reaching 4 sales and 4 service points in the country. THE SUCCESS OF THE NEW DOBLÒ AND NEWS OF THE LINE A

The most striking news of 2005 was, without doubt, the presentation of the Fiat Doblò with its new image and its selection as the “Commercial Vehicle of the Year.” Given by the “Van of the Year” jury comprised of 19 European journalists, this important award was presented at the 28th International Commercial Vehicles Fair organized in Amsterdam. The award was granted to Doblò for the entirely renewed exterior design, increased road capacity, the new Maxi long chassis version and the renewed engine range. Fiat Commercial Vehicles President Lorenzo Sistino received the award on behalf of Fiat. Fiat Doblò was the center of attention in Amsterdam; it was the star of the fair. Renewed with the 120 million U.S. Dollar investment financed entirely by Tofaş and reaching nearly 500 thousand in sales in five years and bringing “The Best Commercial Vehicle of Europe” award to Fiat after a decade, Doblò had long earned that title. The new Doblò had appeared before admirers with a design that complied with the concept of modern aesthetics. It was powerful and strong. The durability that people using it for professional purposes needed, fuel economy, low maintenance costs, and driving flexibility were all prioritized in the new Doblò. Another “Tofaş vehicle” news received at the end of 2005 was only known by its code name: D200… The project that responded to the needs of a passenger car in Tofaş’s C segment, and its technical support and production agreement was signed with Fiat Auto SpA on December 30th. With 2005 behind, most of the predictions were coming true: 2005 was Tofaş’s year. In evaluating this year, Koç Holding CEO Bülend Özaydınlı was convinced that the achievements of 2005 were bringing Tofaş a step closer to be the automotive production center of Europe.

Left page and the following page: The New Fiat Dobló was chosen “Commercial Vehicle of the Year” in 2005 by the “Van of the Year” jury comprised of 19 European journalists.

We can say that 2005 was quite a successful year for Tofaş. When we evaluate the most recent financial results, we see that Tofaş doubled the profit of nine months compared to the same period of 2004. I believe the year-end balance sheet will be the same. However, it was, in my opinion, the new investment decisions Tofaş made that left their imprint on this year.

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Another ceremony was held at the factory in Bursa: Tofaş employees celebrated both the new Fiat Doblò’s win as the commercial vehicle of the year and the release of five hundred thousandth Doblò off the belt. On the day of the celebration, CEO Altavilla made a speech regarding the future. The speech included both “thank-yous” and the news of investments underway: Today, we are enjoying two happy incidents together. Having been chosen as the “Commercial Vehicle of 2006,” the new Fiat Doblò has succeeded in entering the European Union with all its features. I am grateful to all of you Tofaş employees for your contributions to the process. With 500 thousand manufactured so for, the New Fiat Doblò will continue to be the leader of her class with her renewed image. As Tofaş family, we are here to celebrate today the higest reward an automobile manufacturer could receive from the international press. This is you victory. And you have proven that one of Fiat’s most spectacular plants in the world is right here in Bursa. Following this success, I am thrilled to tell you that Tofaş is one of Fiat’s three most strategic production bases in the world. As you all know, Fiat has set aside a budget of more than 500 million Euros for the new investments at Tofaş. This number will increase incrementally in 2006 because the scope of the projects planned for Turkey is getting wider. Today, many automobile manufacturers in the world decrease production, shut down, and are forced to lay off their employees. However, this is absolutely not true of Tofaş. Tofaş continues to grow and as it does, we will continue to generate new job opportunities in this part of the country and to create now areas of business for our suppliers. My expectation from you is to continue with your hard work and determination, which carried Tofaş to this level of achievement in the first place. We are well aware the challenges that await us in 2006. I trust you fully to overcome these challenges. You have attained great success with the New Fiat Doblò. I am certain that you will keep that up in the D200 and MiniCargo projects.

NEW FIATS INTRODUCED TO TURKISH CONSUMERS IN 2006

Fiat’s new models were consecutively presented to automobile enthusiasts and consumers in Turkey in 2006. Representing the new image of Fiat, Grande Punto and the New Ducato, as well as Fiat’s 4x4 vehicle Sedici were introduced to the Turkish market. Having been released in Italy in September, Grande Punto was designed by renowned designer Giorgetto Guigiaro. It was thought that this vehicle in the B segment would be the locomotive of Tofaş’s new strategy. It was a compact and sporty-

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looking car and the interior design was just as attractive. It was launched during the dealer meeting in Istanbul and became part of the 38th year celebrations. FIAT SPONSORS THE HIER APOLIS EXCAVATIONS

Tofaş continued its support of culture and arts with a new initiative in 2005 and became the sponsor of the archeological studies conducted by an Italian excavation team under the supervision of the Ministry of Culture and Tourism at the famous ancient city of Hierapolis in Denizli. Located 18 km north of the city, the excavations at Hierapolis were presided by Prof. Dr. Francesco D’Andria of Lecce University. The studies were particularly focused on the Temple of Apollo, the Ancient Theater, House with Ionian Capitals, Frontinus Avenue, the Cathedral, Agora, Necropolis, and the Martyrium of St. Philip. D’Andria had been thrilled to have found the fractured Athena sculpture and base at the Temple of Apollo: “The site of the temple is like a museum. We discovered important sculptures there last year as well. This year, we excavated the fragments and base of the Athena sculpture. Once we bring together the pieces and translate the inscription on the base, we will know to whom the sculpture is dedicated.” Founded in early 2nd century B.C. for the Hiera, the beautiful wife of legendary hero Telefos, the city is considered sacred as it generally accepted that St Philip, one of the 12 apostles, was martyred here. In 133 B.C., the city had been relinquished to the Romans upon the will of King Attalos III of Bergama. It grew richer during the rule of the Roman Empire between 1st and 3rd century A.D. Visitors of the area tour the ancient city and Pamukkale as part of the same package. The impressive remains of Hierapolis are part of UNESCO’s World Heritage Site List. Vehbi Koç Foundation began supporting the city in 1994. First the large amphitheater had been prioritized. During that period, the wall of the stage that had crumbled during earthquakes in the Middle Ages had been restored. The theater was pulled off the ground following the works in 2005; between 2013 and 2014, Tofaş provided the necessary support for the restoration of the theater once the monumental marble front of the theater structure was restored. The works culminated in the restored theater building highly admired by tourists today. The demolished state of the theater in old photographs clearly reveals the scope of the work and the importance of the support Tofaş has lent to the project. As we tour the theater and walk up and down its steps, we truly realize the dimensions of this rescue project. Tofaş’s support of the ancient city of Hierapolis continues within the scope of the excavation and restoration of Plutonium. In the ancient world, it was believed that Plutonium or Gate to Hell was the portal to

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Vehbi Koç Foundation began sponsoring restoration works at the ancient city of Hierapolis in 1994. The large amphitheater was given priority and the collapsed wall of the stage was restored. Between 2013 and 2014, TofaĹ&#x; provided the necessary sponsorship for the rebuilding of the marble front of the stage structure and the restoration of the theater.


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the underworld where Pluto (or Hades in Greek mythology) and his wife Persephone ruled. The gate bears this name, as it contains a cave that releases carbon dioxide, which causes the death of living creatures going near it. Drawing visitors both with its prophecy and natural characteristics, the finds excavated at Plutonium are critical as they pull back the known history of Hierapolis by 300 years. EXPORTS TO RUSSIA

The agreement on the export of the Fiat Palio and Fiat Albea models manufactured at the Tofaş factory in Bursa was finalized in 2006. Fiat Auto and Rus Severstal Auto signed an industrial agreement for the establishment of an assembly line to manufacture the Fiat Palio and Fiat Albea models. Per the agreement, Tofaş would export all of the parts necessary to manufacture the Fiat Palio and Fiat Albea models, the production of which would begin in 2007 at Severstal Auto’s Neaberejniye Chelni Fiat employees near Kazan. Having begun production with the assembly line the Fiat employees had set up in 1971, Tofaş was now in a position to set up its own production lines abroad. This was evidence to Tofaş’s competitiveness on a global scale. After 10 months of work, the Fiat Albea began to come off the assembly line in Russia. As of 2007, Fiat Doblò was manufactured at the same company, generating a 250 million Euro income for Tofaş per year. All the workers employed for this production had been trained at the Tofaş factory. Turkish engineers worked on the assembly and testing periods of the vehicles in Russia. Russia-Albea and Actuel Doblò production ended in 2011, as per contract, after the manufacturing of 39,504 and 13,080 cars, respectively. CHANGE OF FL AG AT TOFAŞ

At the Tofaş Board Meeting held on October 27, 2006, it was announced that Ali Pandır was appointed as the new CEO and that Alfredo Altavilla would assume to position of Powertrain Technology CEO. Altavilla had strong faith in the competitiveness and sense of responsibility at Tofaş: During my term at Tofaş as CEO, I had the opportunity to work with a highly professional and skilled team that was eager to strengthen the competitive position of both Tofaş and Turkey in the world. It is always a challenge to create a successful relationship. However, as in the case of this partnership, if there is a will, a clear vision, common goals, and mutual respect, then it is not difficult to obtain a successful outcome. In that respect, Tofaş represents not only the competitive spirits of FCA and Koç Holding, but also their faith in expanding the

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business in a responsible and sustainable manner. Thanks to these assets, Tofaş has won many awards both in the commercial area and in the field of environmental responsibility.

Alfredo Altavilla was an important name for FCA; he was also among the executives that played a critical role in bringing Tofaş to its current place. Ali Pandır was a familiar name in the Koç Group. He had begun his career in the automotive industry at Tekersan Jant Sanayi in 1980 and worked in this group for nearly nine years. After working as an engineer at the Koç R&D Department, he transferred to Otokar and served as production engineer and production director. A year later, he became the After Sales Director of General Motors (GM) Turkey. He was appointed to GM operations abroad and also served as Opel’s Non-European Post Sales Director. Receiving an offer from GM’s organization in Asia, Pandır created the company through which GM runs its entire commercial operations in China and served as the general manager of that company for two years. Later, he became the president of GM Overseas Distribution Corporation. Finally, he served as the president of the restructured Indonesia. In 2006, Ali Pandır was appointed as the CEO of Tofaş.

T WO AND A HALF MILLION AUTOMOBILES

There was a special celebration on November 29th at the factory in Bursa: Tofaş production had reached 2.5 million cars. A Doblò was the 2.5 millionth car and it made the entire factory proud to take it off the assembly line. Tofaş had a giant team of 5252 members, 4347 of which were working on the field. The numbers were constantly growing and this growth was the work of that massive team. They had every right to feel pride. As they took the 2.5 millionth car off the belt, they cheered, “We have a right to be proud; we are Tofaş team members to the end, through thick and thin.” It was evident that consumers preferred the Doblò as well, as it had become the bestselling model in the automotive sector in 2006 with 34 thousands 41 cars. Tofaş broke its own exports record with 123 thousand vehicles in 2006.

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LINE A

Referred to as D200 in the corporate history of Fiat, the D200 Linea project is regarded as the company’s determination to stay in automobile production and as the precursor of the Egea project. Following the success of Doblò, it was debated whether Tofaş would focus solely on the production of light commercial vehicles or continue with passenger car manufacturing. Linea was proof that the company was resolved to continue making passenger cars, which is why it was very important. The project management of Linea was assigned to Ahmet Altekin, who had worked as a quality director at Fiat Cassino in 2005, and Product Project Director of Tofaş R&D, Technological Research and Innovation Director, Strategic Management and Business Development Director, and Cost Competition Director. After the project got the green light, the preliminary work to develop the model was initiated predominantly in Brazil. A rather small team in Tofaş followed the project development and later production stages. Development for Turkey and some European markets began a year later; however, the model was released in Turkey and in Europe a year earlier than it did in Brazil and the worldwide launch was made in Istanbul. Hence, the Linea project not only underlined Tofaş’s determination to manufacture passenger cars of the future generation, but it also allowed Fiat to recognize Tofaş’s emerging competence in product development and production processes. Meanwhile, as work on the Fiorino model had already begun, the development and production of the two models were overlapping; this period also heralded the news that an intense period for the simultaneous production of new models was about to begin. The 11th Istanbul Autoshow was held in November. This one had a special importance because the fair had attained international recognition with the accreditation of OICA/ / The International Organization of Motor Vehicle Manufacturers. During this event, Fiat finally introduced the long-awaited D200 project to the public. The new sedan was Linea and was presented to the Turkish and world press for the very first time. Koç Holding Honorary President Rahmi M. Koç was quite excited at the car’s world premiere:

Previous pages and right: Fiat Linea regarded as the precursor of the Egea project and an important sign of Tofaş’s determination to stay in automobile production.

It is very important for Linea to be manufactured in Turkey. This progress is beyond our imagination. I am living one of the happiest days of my life. Our automotive endeavors in Turkey are running very well with the Linea, which will be sold not only in Turkey but on international markets as well. Therefore, it was given a name that could be easily articulated in almost every language. A competition was launched a number of names were proposed. Linea received the highest number of votes among them.

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Linea meant “fine line.” With its diesel and gasoline engine options that had a large range, low fuel consumption, and environmental features, the various options on the car targeted offering the best price and content balance. Meanwhile, the integrated in-vehicle infotainment system “Blue & Me” that worked with Turkish commands was introduced to customers for the first time; in order to be released simultaneously with the 1.4 T jet-engine Grande Punto, pre-production was subjected to special tests in these cars. Linea hit the road in May of 2007. On April 15th, it was brought down form the assembly line among the cheers and confetti rain of workers that built her. CEO Ali Pandır shared his joy with workers with the following comments: “We have the most qualified labor force right here. We will present to Turkish consumers the most beautiful, competent, durable, and economical vehicle. This is what the consumer demands. We will be constantly looking for perfection. We have taken strides with Linea.” A celebration was organized for Tofaş employees at the Atatürk Indoor Stadium in Bursa on April 29th. Five thousand employees joined the festivities to enjoy the day as the ones to have personally

Chair of the Tofaş Board of Directors Mustafa M. Koç and FCA’s CEO Sergio Marchionne congratulate one another during the launch of Linea.

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manufactured the Linea cars that would fill the roads of Europe. The new Linea they had built with their hands had come on stage with the Linea song the entire team sang together. Tofaş’s Industrial Operations Director Massimo Risi thanked the manufacturers:” Linea is now in production and is simply amazing…. It is a great pleasure for me to remind you all that we completed this amazing project in 18 months…. We established a factory within the factory. It is no easy feat conducting two new car projects simultaneously and doubling production. Our human resources are our most valuable assets. We wanted to launch the car two months early and you achieved that! I would like to thank you and your families for the support you have given us.” On the evening of May 2nd, Linea was once again the star of the night. It featured the new Fiat logo for the first time and Tofaş had been involved in the entire process from product definition to design; prototypes were manufactured and production was completed in Turkey. As Tofaş’s child, Linea deserved a splendid celebration. That night, Fiat Group CEO Sergio Marchionne spoke of the important place local partners had for Fiat; he stressed that the sedan markets were very powerful in countries such as Turkey, Russia, Brazil, and China and added that Linea was an exemplary car that was developed in line with the demands of these markets: “The important thing is to work with the right partners and to have the right chemistry. Koç is one of these. Our partnership with Koç constitutes a model for many other projects in the world. This will lead to new developments in Bursa and the MiniCargo is one of these. Mustafa and I had the dream of organizing a global launch on the Bosphorus in 2004. Now, we have brought this to life with Linea.” The moment the two men embraced and congratulated one another would be remembered by everyone present that night. NEW PROJEC TS AND NEW MODEL S IN 2007

“Code name 263”… Before MiniCargo even hit the road, Tofaş signed a new and literally a giant project with Fiat… This would be yet another light commercial vehicle. Brought to life through an investment of 370 million Euro, the letter of intent for the Bursa production of the vehicle was sighed with the Fiat Group Automobiles S.p.A. on June 22, 2007. Introduced to the press as “Code name 263” at the time, this project was none other than the New Doblò. During the press conference of the project, Tofaş CEO emphasized the challenging path that led to the agreement. As in all new product initiatives, even when it seems like a natural extension of a current model, remaining globally competitive requires many difficulties are overcome and it is never easy to get the approval to go ahead. Two thirds of the 120 thousand light commercial vehicles are to be exported. The 263 project is very important for Tofaş, as it entails a commitment to exports.

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L ANCIA JOINS THE TOFAŞ FAMILY

As of June 2007, a new brand was added to the Fiat Group labels that Tofaş had been distributing: Lancia. Hence, the total number of brands was bought to five. Having celebrated its 100th year in Italy, Lancia was presented to the Turkish market with its smallest model: Ypsilon. Ypsilon was a B-class car and was the best-selling model of Lancia in Europe at the time. Corporate Communications Director Arzu Çolakoğlu recalls how the distributorship was granted to Turkey and the exciting period of launch preparations: After a separate organizational unit was created within the company for Alfa Romeo, the issue of bringing Lancia to Turkey came to fore. We began to conduct preliminary meetings and feasibility studies. One afternoon, Mr. Altavilla called me and my director Altan Aytaç to his office. He told us that we had been granted the distributorship of Lancia and that we had to begin launch preparations for the brand soon. While we were thrilled with the news, we were surprised how fast the approvals had been granted. The interesting part of it all was that we were instructed to bring the Lancia brand to Istanbul Autoshow, which would begin two months after this meeting. Preparing the product configuration and pricing, developing the launch strategy, training of the staff to work at the fail would normally take a minimum of six months to complete, but we had to finalize it all in two to three months. What is more, we were happy with our performance; it was an important experience for me. I would like to note that while at the fair, we also did the pre-sale of the vehicles that would arrive in the country in a few months. In order to achieve all this, we stepped out of the traditional methods we were accustomed to and produced creative solutions. This launch was one of my most enjoyable experiences during which I realized that if you do your job with passion, with the right teams, and with courage and dedication, you can overcome the seemingly impossible and get even more creative and resourceful under difficult conditions.

MINICARGO HITS THE ROAD

Tofaş achieved once again one of the “first”s of the automotive sector: As part of the MiniCargo project Tofaş brought to life with an investment of 380 million Euro, the factory in Bursa began producing, -on October 3, 2007- the vehicles it would export to the entire world. Production began with a magnificent ceremony. It was the first time in the Turkish automotive sector that a company would manufacture vehicles for three international brands: The operation entailed Fiat’s Fiorino, Citroën’s

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In 2007, Lancia joined the brands TofaĹ&#x; distributes.


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Nemo and Peugeout’s Bipper. Officials of the state, executives of Fiat and Tofaş, Tofaş dealers, and workers. Then-Minister of Industry and Commerce Zafer Çağlayan, deputies, Chair of Koç Holding and of the Tofaş Board Mustafa V. Koç, Fiat Group CEO Sergio Marchionne, PSA Peugeot Citroën CEO Christian Streiff, Koç Holding Automotive Group President Turgay Durak, Tofaş CEO Ali Pandır, and executives of the company were present at the ceremony. Mustafa V. Koç stressed the importance of this initiative as follows: The automotive sector holds a critical place in our focus strategy. When we look at the automotive sector in Turkey, we see constant development and progress. With the 1 million 24 thousand vehicles we reached last year, we are now ranked number six among automobile manufacturers in Europe. This success rate was reflected directly on exports. In 2006, automotive exports reached 18% of the total exports in Turkey. We are now exporting cars to 170 countries across five continents. During the same period, vehicle exports multiplied 35 times. I am proud to add that having shaped the development of the Turkish automotive sector since 1968, Tofaş is the leader in this growth. Tofaş is now a global actor not only in industry, but in marketing as well. The Doblò project is the first step towards making Turkey a production center and the MiniCargo project will take this a step further. As Koç Group, we have achieved 45 percent of both Turkey’s automobile production and exports in 2006. The MiniCargo project will play a key role in our vision with the growth it will generate. It will grow our competitive identity and open new horizons for us in the global automotive industry. We have much more ambitious goals for our country and for Koç Group. We are planning to manufacture 1 million vehicles by 2010.

It had become customary to sign the first car off the assembly line. This time, Mustafa V. Koç, Zafer Çağlayan, Sergio Marchionne, Chrstian Streiff, and Ali Pandır signed the first three cars. The “handsome” MiniCargos lined up before the Turkish consumers for the first time at the Istanbul Ticari Araçlar ve Yan Sanayi Fuarı (Istanbul Commercial Vehicles and Supplier Industry Expo) held between November 21st and 25th at the Tüyap Fair and Convention Hall, where Fiat Fiorino, Citroën Nemo and Peugeot Bipper all showed up before auto enthusiasts for the first time. Fiorino’s worldwide launch was held in Milano held at the 11th Transpotec Logitec International Commercial Vehicle and Spare Parts Fair. The exterior dimensions of the vehicle, economic price, and driving conditions, and agility were among the features that stood out at the fair.

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The MiniCargo was presented to the public in late 2007. Fiorino’s global launch was organized in Milan.


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COLL ABOR ATION WITH UNIVERSITIES

The weight and support Tofaş gave to education throughout its history continued and still continues at various levels both within the company and with the initiatives it has taken in others. This particular endeavor of 2007 concerned a project at the Master’s level. As a party to the collaboration between Uludağ University and Politecnico di Torino (The Polytechnic University of Turin), Tofaş played an instrumental role in bringing to life the first “Master’s Program in Automotive Engineering.” THE FIRST FAC TORY TO RE ACH THE BRONZE PL ANT LEVEL AT WCM

Let us now focus on another initiative that carried Tofaş to a worldwide level and describe the first step of this gradual achievement: WCM or World Class Manufacturing. The objective of World Class Manufacturing is to bring the production and service performance of Fiat to the level of the world’s most competitive firms in the fields of work safety and worker’s health, environment, quality, delivery, and cost. In this respect, all initiatives are based on the analyses of waste and loss; anything that is not valued by customer is considered a loss. The aim is not only to diminish these losses, but to eliminate them as well. In order to support their implementation, a Japanese production professor reviews their performance every six months, determining what needs to be made for progress. Competence training is offered in the process. Initiated in May of 2006 with all production areas of Fiat, the World Class Manufacturing (WCM) implementations continued with increase. The last evaluation was conducted at Tofaş on November 14 and 15, 2007. In charge of all fields of production at Fiat, Stefan Ketter also joined part of the work. At the end of the evaluations, Tofaş reached a very important level and succeeded in obtaining the highest grade among Fiat factories. It raised its former grade of 42 to 52; reaching the bronze plant level, it thus attained the level of a worldwide production plant. WCM evaluates maintenance, cost management, and logistic systems with respect to sustainability. Tofaş had been engaged in constant upgrading since 1984 and thanks to the amelioration programs, it has saved 72 million Euro. Structured on this foundation, the savings only in the field of production reached 8 million Euro in 2007 with the WCM applications; thanks to these studies, 3400 improvement projects and 36 thousand proposals were received from employees.

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FIAT MOTORSPORTS TE AM WINS SECOND PL ACE

In 2007, Fiat Motorsports Turkey decided, for the very first time, to join the entire European Rally Championship as part of its long-standing history of motorsports. Equipped with the team’s new car Grande Punto Super 2000 and experienced pilot Volkan Işık, the Fiat Motorsports Turkey team partook in a challenging struggle of 10 races. Competing against nearly 20 other teams throughout the championship, Fiat Motorsports Turkey won third place in the last race France – Antibes Rally and completed the 2007 European Rally Championship in second place. Reaching such an important level in its first year of participation in the ERC, the Fiat Motorsports team set its sights on becoming the champion in 2008. As the first Turkish pilot to win the Elpa Rally in Greece, while Volkan Işık’s win in the general classification entered the team in the championship pot in October, this win gave a Turkish team the first general classification first-place title in the ERC. 40 YE ARS OF TOFAŞ

The repercussions of the global economic crisis that emerged at the end of 2008 were seen in Turkey as well. The mortgage crisis that began in the U.S. spread to other countries and created a chain reaction that seriously affected the exports of developing countries, which, in turn, had a significant impact on production and daily life, and increased the number of the unemployed. The automotive sector in Turkey received its share of the stagnancy, particularly observed in the second half of the year. With the positive progress of the early months, de-growth remained only at 17 percent. The sale of 277 thousand 843 vehicles in the domestic and international markets brought the highest sales figures of the last 40 years. Thus, the company had a 23.8% increase of performance compared to the previous year. Exports revenues had risen by 43.3% since the year before. Tofaş CEO Ali Pandır reminded the public of an important point in his evaluation of the past 40 years and brought to fore the concept that would determine Tofaş’s place in the future: “With all of our employees, we are united around the common objective of manufacturing world cars on which Tofaş engineers will have the final say in every stage from design to production, as the R&D motto states, and of being a world player in this game.” By the end of the year, Tofaş had reached the highest sale figures in its 40 years despite the global economic crisis. The past 40 years had gone by as the same way as they had begun: Bold moves nurtured with smart policies; the passion to chase the “first”s and the ensuing accomplishments; never giving up the fight to reach the target; realizing

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and embracing the fact that trust in science, research and people are top priorities; never losing emotional ties and the sense of belonging while professionalizing human relations and the notion of family; becoming institutionalized by internalizing “us” instead of “me.” As Turkey’s industrialization progressed, Tofaş’s transformation into one of the most important actors was made possible by fostering these values as part of its own philosophy. The more challenging task would be to remain as the key actor. This could only be accomplished by never losing these values, but adding new ones to evolve and grow. Now 40 years old, Tofaş would continue on its path without losing its energy. In his address commemorating the 40th year of an institution looking towards the future, Chair of the Board Mustafa V. Koç wrote: The founder of our Group, the late Vehbi Koç wrote as follows in one of his letters to his colleague Bernar Nahum in 1963: “I believe that whichever strong company becomes engaged in the automotive industry before its competitors will succeed in this country.” As part of this vision, Tofaş, founded 40 years ago, has become one of the pioneering and innovative institutions that have accomplished many “firsts” in the Turkish automotive sector.

The 40th anniversary of Tofaş was celebrated at the Bursa Museum of Anatolian Cars on July 15th. Minister of Industry and Commerce Zafer Çağlayan, Chair of the Koç Holding and Tofaş Boards Mustafa V. Koç, Tofaş CEO Ali Pandır and guests joined the ceremony, which had a beautiful surprise in store: Written by Prof. Önder Küçükerman, Anadolu Tasarım Mirasının Ayak İzlerinde Türk Otomotiv Sanayi ve 40. Yılında Tofaş 1968-2008 (The Turkish Automotive Industry in the Footprints of the Anatolian Design Heritage and 40 Years of Tofaş) was presented to guests as a reminder of that evening. Starting with the ancient traces of transportation in Anatolia thousands of years ago, Küçükerman’s book tied the age-old story to the past 40 years of Tofaş and thus constituted a reference book in and of itself. The inauguration of the historic Umur Bey Hamam on the premises, the restoration of which was completed in 2008 through the initiatives of Tofaş and support of the Vehbi Koç Foundation, as well as the Vehbi Koç and Tofaş exhibition were also opened during the 40th anniversary ceremony of Tofaş. Considering the fact that the factory is located on one of the Roman roads that reach Anatolia, we can imagine that Tofaş continues to represent the ancient traditions of the area in which it is situated. PIEMONTE TORINO DESIGN EXHIBITION

Speaking of Tofaş Museum of Anatolian Cars, we should mention yet another exhibition opened there in early 2008: Displaying works by 200

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different designers, the Piemonte Torino Design Exhibition welcomed visitors in February through the contributions of Tofaş and the Italian Consulate in Istanbul. Encompassing more than 250 design objects ranging from space packs of astronauts and the helmet of Valentino Rossi, to Schumacher’s shoes, Borsalino hats, new Olivetti designs, to most memorable objects by Alessi, Abet, and Gufram, the exhibition was displayed at Umur Bey Hamam. “ VOCATIONAL EDUCATION: A CRUCIAL MAT TER FOR THE NATION”

Tofaş is strongly convinced that education is the means through which scientific research can change the future and thus has dedicated itself to education from its early years onwards. Hence, the company has never deviated from Vehbi Koç’s famous motto, “I can spend millions on education at the blink of an eye, but would raise the roof for any waste as little as 25 cents.” The first month of 2008 thus began with contribution to education. The protocol of the Fiat Training Laboratory designed as part of the “Vocational Education: A Crucial Matter for hhe Nation” project developed for Koç Holding’s goal to train qualified mid-level personnel for the Turkish industry, was signed between Tofaş and the Ministry of National Education on January 22nd. With the new academic year, 10 Fiat laboratories were put into operation in addition to the Şişli Industrial Vocational High School. The symbolic inauguration of the laboratories was held in Ankara on October 15, 2008, nine months after the protocol was signed. Two laboratories in Istanbul and one each in Bursa, Adana, Izmir, Antalya, Samsun, Kocaeli, and Diyarbakır were opened simultaneously with the opening ceremony of the Fiat Training Laboratory held at the Ankara Güvercinlik Industrial Vocational High School, which hosted Minister of Education Hüseyin Çelik, Koç Holding CEO Mustafa V. Koç, Tofaş CEO Ali Pandır, and Tofaş After-Sales Director Turhan Çeltikçioğlu. Strongly dedicated to these projects, Mustafa V. Koç was proud of the new progress being made: Tofaş is the first automobile factory of Turkey. This year, we celebrated the 40th anniversary of its inauguration. With more than nine thousand employees and a production capacity of nearly 400 thousand a year, it is a source of pride for the Turkish economy. Along with the Ankara Güvercinlik Industrial Vocational High School we launched symbolically today, the 10 new “Fiat Training Laboratories” are important contributions Tofaş has made to our project.

Successful graduates of the 11 Fiat Training Laboratories would be provided with internship and employment opportunities; the schools

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would yield the first graduates in 2010. The schools in which the Fiat Training Laboratories were set up through the support of Tofaş were as follows: Şişli Industrial Vocational High School, Samandıra Industrial Vocational High School, and Bağcılar Industrial Vocational High School in Istanbul; Güvercinlik Industrial Vocational High School in Ankara; Adana Motor Vocational High School in Adana; Gaziemir Industrial Vocational High School in Izmir; Hürriyet Industrial Vocational High School in Bursa; Antalya Industrial Vocational High School in Antalya; Samsun Industrial Vocational High School in Samsun; Kocaeli Industrial Vocational High School in Kocaeli; and Burhanettin Yıldız Industrial Vocational High School in Diyarbakır. Young graduates of these laboratories were employed both by Tofaş and by dealers and other institutions in the ensuing years. The main goal was being achieved and the number of skilled and trained young workers was increasing at the factories. The personnel that began working at different departments of the factory in Bursa were noticing the importance of education as they were applying the know-how they acquired at the labs to real life. As Kemal Özcan, who works at Tofaş’s Paint Production Directorate T.Ü.T. 311-Putty line: The educational level of the Fiat Laboratory is very high; all kinds of opportunities are given for professional education. My training at the Fiat Laboratory and internship at Birmot has allowed me to get to know the automotive sector well and accelerated my adaptation period to Tofaş. 9

THE NEW FIAT VEHICLES

Fiat Bravo was one of the new Fiat vehicles traversing the roads in Turkey in 2008. Following the launch in February, it came to be sold on the Turkish market. The uptrend Fiat initiated with the Grande Punto and Linea continued with the New Fiat Bravo. It was very competitive in the compact segment. Fiat Bravo would further pull up the perception of the brand as the model that completed the product range. Recognized as the “legend” of Fiat by most people, Fiat 500 went on the Turkish market as of October. Introduced to the public at the 2008 Istanbul Autoshow, 500 had been chosen the automobile of the year in 2008.

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“BEST AUTOMOBILE” FIAT LINE A

Comprised of Europe’s leading automotive editors, the Autobest 2008 jury declared Linea “best automobile” about a year and a half after its launch. The jury had visited Turkey in November, observed the production of Linea on site at the Bursa factory, and had test-driven the cars. The jury was comprised of the foremost automotive editors of 15 counties. In the Autobest 2008 contest, Fiat Linea left its rivals behind with 850 votes and was awarded the “Best Automobile” supporting the marketing of the car with the best price available. With the Linea and MiniCargo investments, Tofaş production capacity reached 400 thousand in 2008, making Tofaş the company with the largest capacity in the Turkish automotive industry. The company broke a new record in exports and finished the year with 209 thousand 456 cars. Third place in the automobile market, second place in the light commercial vehicle, and second place in automobile and light commercial vehicle categories all belonged to Tofaş. The Egypt production of the Şahin was ended after 103,056 cars. Having begun with 111 in 2008, the SKD-Linea production ended in 2011 after 2319 cars. FIAT MOTORSPORTS TURKEY – THIRD PL ACE IN EUROPE

Having successfully completed the final race of the European Rally Championship season of 2008, Fiat Motorsports Turkey came third in the championship. Competing with the Fiat Grande Punto Super 2000, Fiat Motorsports Turkey tem members Volkan Işık-Kaan Özşenler had completed the previous season in the top three as well. 2009: CHALLENGING , YET FULL OF ACCOMPLISHMENTS

Having emerged from the U.S. in the final months of the previous years and spreading to Europe and the rest of the world, the ripple effects of the economic crisis were slowly enlarging their scope. Although it was relatively far, the repercussions of the crisis were observed in the real economy; there was narrowing in the automotive market and the orders were declining. Starting with textile and metal industries, many factories were sending workers on mandatory leave, halting production or laying workers off. Tofaş first began with mandatory leave. Next, it was forced to halt production towards the end of the year. The statements announced that production would resume on January 12, 2009. The crisis hit the industry in Bursa the most. Tofaş began production again on the given date. The entire sector suffered serious employment losses during the period that continued through the early months of 2009. Factories in several other cities were

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shot down and hundreds of firms went under. Unemployment multiplied across the country. The worst impact was on Bursa, as the automotive sector had the second biggest blow after finance. The numbers given by Türk-İş 8th Region Representative Mehmet Kanca were unsettling: We are faced with numbers that exceed our estimates. The devastating effects of the crisis have caused considerable unemployment particularly in the final quarter of 2008. 5,683 workers were laid off in October 9,283 in November, and 9,397 in December. In other words, 24 thousand 363 workers were dismissed from employment in three months.

These statements were laden with predictions that 2009 would be worse than 2008. The ÖTV (Private Consumption Tax) discount and Europe’s scrapping bonus came to the automotive industry’s rescue. The discount decision was enacted in mid-March. Showrooms began to fill and stocks began to deplete once again. The idea of resuming production came to fore. Tofaş had been able to do a good stock management prior to the crisis, so it had entered this period with a low stock. The tax advantage was used to melt the raw material and semi-product stocks. The workers were called back and the lines were restarted. During this troubled period, Tofaş production had nonetheless reached 3 million. Manufactured in April and selected as the “Commercial Vehicle of 2009,” Fiat Fiorino was recorded as the 3 millionth car Tofaş had produced. SILVER PL ANT LEVEL AT WCM

Despite the challenges, March of 2009 gained a new meaning for Tofaş with rewarding news: the company attained the Silver Plant level at the WCM. Tofaş had made it through the 170 Fiat factories in the world and managed to be the first and only level to reach this level. Tofaş had been upholding its policy of constant improvement since 1984; there was a distinction in its view of organization and the relationship between product, worker, and quality. It had undertaken serious studies over the years. Therefore, as a concept, Tofaş was not a stranger to the whole concept of WCM. Therefore, reaching this level held a serious meaning for the company, as the path it had been following was bearing fruit and, in a sense, was being registered. Especially with this second step, consolidated its role as a global player. Approval for the “Silver Plant” level Tofaş received was given by Prof. Dr. Hajime Yamashina, Faculty Member of Kyoto University’s Engineering Sciences Department and member of The Royal Swedish Academy of Engineering Sciences, WCM Association Europe President Luciano Massone, WCM Association member Thermal Ceramics executive Diane Gaillot. Industrial Operations Director Massimo Risi’s observation drew attention to the importance of the “team spirit” that

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Tofaş had internalized since the first day: “Beating as a single heart is the basis of success.” Tofaş is the first and only factory to have reached the “Silver Plant” level among all the Fiat Group factories in the WCM project. As the first factory to reach first the Bronze and now the Silver Plant level in the journey it has begun in 2006, the factory has managed to maintain its leadership within the group. The strength of Tofaş is in its workers. The participation of our employees has reached a very high level with 96 thousand proposals and more than 8 thousand projects in 2008 alone. The most important element at the heart of this success is that the hearts of all employees beat as one in achieving their goals and they all want to be part of this process with sincerity and determination, being able to say, “I am a supporter of this process and a part of this success.” Measuring your economic performance constitutes the basis of the WCM studies, as the priority in the evaluation and approval of each project is the lowering of costs to a minimum. Our next target is the “Gold Plant” level... We must be more proactive, work harder, attain the most successful results to reach the results that will make a difference, and constitute an example for all other factories to reach the Gold Plant level.

Truly enough, it had not been easy to reach this point; everything was learned and developed “together.” Memories of the early days of the factory come alive with through the recollections and comparisons made by retired Tofaş employees, who have experienced the physical and intellectual distance traversed in 40 years and take pride in the present state the factory is in. Having worked as Press Shop Director, Production Deputy Director, Assembly Production Unit Director, and Production Manager between 1982 and 2003, and as Production Director between 2003 and 2014, Osman Soyoğul, who retired in 2014, recalls: Imagine, the building would be flooded during heavy rain in the early days. Once we began using constant improvement methods, the concepts changed inside. Now, the level we are at is globally competitive. We have come a long way...

There are certain rules and methods to establishing a factory on a par with world standards; if you abide by these rules, you can run everything smoothly. However, if you have been part of starting an institution from scratch, worked with dedication and loyalty to overcome countless challenges, and, more importantly, witnessed the process of growth and aged with it, your sentiments for that institution will be far different than the ones who have become a an up-and-running system.

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This is why the veterans know best the notion of “We’ve come a long way.” Perhaps they relish the awards and share them far better than anyone else could. Truly enough, they have already spent enough efforts to get to the point of receiving that award. Tofaş had been able to encourage workers to think -night and day- about how to bring the factory to the next level; the memory of 40 years had been internalized by its employees. This effort revealed itself so powerfully before the Silver Plant level that it culminated in both a product and a success story. As one of the actors of that experience, Metin Göyen remembers that period quite well. Retired from as the director of assembly technology system and maintenance in 2011, does Göyen feel part of this thrill as an engineer or a Tofaş team member? We were in the process of worldwide production at the time... As Tofaş, we had a claim: We were getting the same points with the Fiats in Italy and Poland. Prof. Yamashina was the president of the organization … He was visiting plants, supervising us with a team, giving points, and rating the factories. We were competing head to head with the others and our goal was to get to the Silver Plant level. We had to do something creative to make a difference and also impress the Japanese professor. The materials on the assembly line are carried by forklifts driven by people. Our team had an idea: let’s build a device and get rid of the driver. We shared the idea with Osman Syoğul and he allocated a budget. We succeeded in building an unmanned vehicle with that budget and event produced a few with a body resembling the Doblò. We named them all; we even had a naming competition! We decorated them a little. It was working just fine. Prof. Yamashina was very surprised when he first saw it and loved the device. Next came the Silver Plant level! Apparently, Prof. Yamashina said to others in Italy and Poland, “Tofaş built this creative device; you are carrying things with the forklifts, but the factory in Turkey has this thing!” We started receiving demands for our little device! After that, we made for prototypes, both for Italy and Poland. It was an AGV or Automatic Guided Vehicle; it was following the line on the floor and moving between the belts on its own, carrying materials. After that, it became quite widespread, entered other factories and became an industrial product. It made us leap!

Osman Soyoğul’s succinct comment is as follows: “This is a revolution in our journey of improvement. A revolution in every sense...” Courage first … Reflected on production, education on improvement was also an important part of this process for many years. Muhittin Yılmaz was a graduate of Ankara Gazi University’s School of Technical Education, who began working at the quality department of Tofaş in 1986. After a decade in the quality, he worked for nine years in production and another year in human resources and can objectively observe this process from afar:

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That final year in human resources, we achieved some great results that left pleasant memories both of Tofaş and us as the employees. At Tofaş, we created an atmosphere that couples production with education to raise quality education entails an atmosphere. Our directorate –of human resources- has allocated us all available possibilities and we began getting excellent results. We begin education first on the field in production. Moreover, this training has brought our production unit the zero-mistake work safety award at Tofaş. These have been huge sources of joy for us. After retiring in late November of 2006, I worked at the factory for one more year. During that period, we hired nearly 3800 new personnel. We worked ardently to see how education and training continue to reap rewards form production. We did follow-ups on the people we trained at the workshop to see how much of that training is reflected on production, how much they benefit from it. The results we obtained truly revealed that Tofaş is at a higher level than all the others. Training was conducted in every field from work safety to worker’s health, from production and quality, to performance and process... Our education methods were also very interesting—entirely based on conversation and fun. I have personally observed that this kind of training is far more effective and has longer lasting results in the workplace.

Education again and again... To ensure that field workers are not alienated from their jobs, but embrace their mission... That was the basis of the whole work. Today, we do trust the work quality of robots, but the human element attains more importance as the number of robots increases. NEW FIAT VEHICLES

Standing out with its sales numbers that reached 28 thousands in three years, the Fiat Grande Punto was completely renewed and launched in Italy under the name Fiat Punto Evo. Fiat Group CEO Sergio Marchieonne had personally given the car her name. The launch in Turkey took place at the end of the year and the vehicle was launched with three different engine options. AN IMPORTANT ANNOUNCEMENT: FIAT GROUP AND CHRYSLER MERGE

On June 10, 2009 Fiat S.p.A., Chrysler LLC (Chrysler), and Cerberus Capital Management LP, which ones the majority of this company’s LLC private investments announced that they signed a nonbinding preliminary agreement to set up a global strategic alliance. Fiat Group CEO Marchionne explained the content of the agreement as follows in his statement:

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This initiative constitutes an important milestone in the rapidly changing environment of the automotive sector and confirms that both Fiat and Chrysler are determined to play an important role in this global process and that they have both dedicated themselves to this mission. The agreement will provide both companies with access to the most well suited automotive market. This will not only help benefit from the additional cost synergies, but will also become possible through Fiat’s ability to present innovative and environmentally-friendly products, an area in which the company is a world leader. The agreement follows several targeted alliances and partnerships Fiat signed with leading automotive manufacturers and suppliers in the last five years, aiming to support the growth and production increase objectives of the concerned parties.

The two companies merged in 2014. The collaboration that had begun in 2009 was completed when Fiat purchased the entire Chrysler Company five years later. The new Fiat Chrysler Automobiles (FCA) Company was established in The Netherlands, with its headquarters in London. “ESKI HAMAM ESKI TAS”

The first large and exhaustive exhibition Eski Tas Eski Hamam10 of the Umur Bey Hamam on November 7, 2009 with the participation of Koç Holding Honorary President Rahmi M. Koç, Koç Holding CEO Bülent Bulgurlu, Koç Holding Deputy CEO Turgay Durak, Automotive Group President Cenk Çimen, Tofaş CEO Ali Pandırç and architect and collector Naim Arnas. As part of the museum, a special cultural space for Bursa, the gallery constituted one of the most pleasant examples of the new museology concept of the museum-gallery-café combination. Conceived as part of the building’s concept, this large exhibition was created with the collection Naim Arnas had passionately put together over the years; it comprised a range of objects that entirely reflected the hamam culture. FIRST GR ADUATES OF THE FIAT TR AINING L ABOR ATORIES

If you speak any one of the Tofaş team members, they will, and particularly the older ones, will say at some point of the conversation, “Tofaş is a school.” At first that sounds a bit cliché; Tofaş has always been dedicated to education with its founder setting education and training as the key principles of the company. However, this is not why people

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Literally translated as “Old Washbowl, Old Hamam,” this Turkish expression means “same old thing,” but in this context, offers a wordplay on the word hamam or bath, as the exhibition is held at the ancient Umur Bey Hamam, which is part of the Tofaş Bursa Museum of Anatolian Cars (T.N.)

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call it a school. As much is learned on the job, Tofaş has realized early on that this training and education significantly benefits production. At the heart of the Tofaş spirit lies craftsmanship, skill, artistry… That is why it is priceless. The same principle constitutes the essence of the Vocational High School project as an issue of the country; the objective is to generate and feed skill and transform it as an advantage for the country… The function of the laboratories set up at vocational high school as part of the Koç Holding project had therefore excited all parties involved, and it still does. This excitement and enthusiasm was felt not only by Tofaş members, but everyone from supplier industry owners to dealers, who had dedicated years to this filed. The first graduates of the Şişli Industrial Vocational High School’s training laboratory were thus quite valuable. The commencement reflected this excitement; diplomas of the students graduating with honors were given out by Tofaş After-Sales and Spare Parts Director Turhan Çeltikçioğlu. Representing the first one of the 11 Fiat Training Laboratories, Şişli Industrial Vocational High School Fiat Training Laboratory was opened in 2006. The 26 graduating students were set to work at the authorized dealers of Fiat, Alfa Romeo and Lancia. Meanwhile, the 36 students studying at the Ankara Güvercinlik Vocational High School Fiat Laboratory were now in 11th grade. Through the personal efforts and innovative approach of Fiat Laboratory Chief Mustafa Gümüş, the school administration had applied to the State Planning Organization National Agency through the Ministry of Education and had requested a month-long internship abroad as part of the Leonardo Project. The requested documents were soon sent to the Ministry with the support of Tofaş After-Sales Business Development Director Ahmet Çapar. Accordingly, a group of 50 students and teachers would intern in Italy for a month in February of 2010.

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The 2010s: future projects of TofaĹ&#x;


“Above all we must always look to the future, foresee the future of new inventions, be unafraid of the new, delete from our vocabulary, the word ‘impossible’.“ Giovanni Agnelli


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policy of acumen, new projects put into operation despite challenges, difficult years successfully overcome with team working were now making room for new ones. There was no notion of “stopping” in the automotive sector during this “journey around the world”; the cost of stopping was known very well. Moreover, the notion of the “future” was constantly moving ahead, as now was the time of R&D and innovation. Thinking about the next decade was no longer considered progressive. Competitiveness was not entirely based on R&D and innovation. THE NEW FIAT DOBLÒ OF 2010 AND ITS FE ATURES

For the past two decades Tofaş had made R&D the basis of its production and had evolved into one of the leading institutions of the country in this respect. Now, Tofaş was manufacturing vehicles for three different brands, breaking its own record by completing 27% of all automotive exports in the previous year, increasing its net profits by 105%, and had the capacity to present a new model to the market every other year. Tofaş was moving ahead as the New Fiat Doblò was being introduced to customers. All the dealer organization, members of the press, and private clients of fleet sales were present at the launch organized in February of 2010 in Antalya. The launch color of the new vehicle was “Turkish coffee,” uniquely manufactured for the Turkish market. Another launch was organized for the New Fiat Doblò in Taksim, Istanbul. After a week of striking short films on the environment, family, and technology shown on LED screens surrounding a giant box emerged the New Fiat Doblò on February 19th. A street party open to the public welcomed visitors. The launch was based on the concept of “large family.” Actors of the then-popular Geniş Aile (Large Family) TV series were also present at the launch.

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Doblò production reached one million in 2010. Mustafa V. Koç had personally taken the Turkish coffee-colored Doblò off the assembly line. State officials, Tofaş executives, and Tofaş employees were present at the ceremony held at the factory. There was another Doblò surprise on that day: the electrical Doblò! Fiat Doblò EV’s test drive took place the same day. It was the first fully electrical car produced through the R&D work in Turkey. Another new development perpetuating the fame of the Fiat Doblò was its selection as the “International Commercial Vehicle of the Year 2011.” The award was one of the most prestigious awards of the commercial vehicle industry in the world; determined by a jury of 24 specialized journalists, the results of the 2011 competition were announced at the 63rd Hannover Commercial Vehicles and Istanbul Industry Fair. Jury president Pieter Wieman stated that the award-winning New Fiat Doblò’s design had impressed the jury in a number of ways and that the most important element of the vehicle was the diversification of Fiat’s platform and body versions, which far outnumbered any other commercial vehicles competing in this category. The last development on the Doblò was related to Opel. In 2010, Tofaş increased the number of brands it was producing to five: Fiat Group and Opel signed a collaboration agreement to manufacture the new vehicle to be developed on the New Doblò platform at the Tofaş plant in Bursa.

The new Fiat Doblò was selected as “The International Commercial Vehicle of 2011.”

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BACK TO BEKO BASKETBALL LE AGUE

Tofaş Basketball Team had achieved its goals in the 2009-2010 season. A year earlier, the team had finished the season as champions of the second league and was now competing in the Beko Basketball League. The objective for the new season was to remain at mid-rank and it did. Preparations began to compete in the “play-offs” in the next season. Meanwhile, the FiatBall Basketball Festivities initiated in 2000 had completed the first decade. Collaborating with TEGV, The Educational Volunteers Foundation of Turkey, as part of the Basketball Volunteers project, the 2010 leg of this initiative took place in Bolu. Tofaş Sports Activities Coordinator Ege Aydan stated that the real goal was to bring kids together and look out for outstanding prospective players:1 A Civil Society Initiative, the objective of FiatBall is to be part of an organization, rather than winning games and becoming the champion. Therefore, each participating athlete receives a certificate of participation and a medal. The events take place in different cities in order to help kids study the historic fabric and culture of that area, to attend concerts when necessary, and to visit developed industrial areas. While our priority at the festivities is to create a bond between the kids as part of social responsibility and to teach them about local customs, we still recruit potential players. There were several outstanding candidates in that respect. They were admitted to the Tofaş Sports Club and their education and accommodation expenses were met. We are sparing no effort to help young athletes become successful individuals and good players. So far, three prospective players made it into the national team youth set up.

PRODUC TION FOR 40 YE ARS

The 40th anniversary of Tofaş Türk Otomobil Fabrikası A.Ş.’s first production was celebrated on February 11, 2011, at the plant with the participation of all employees, executives, and members of the press. Production had begun in 1971; the ground covered in the past forty years was shared at the “Bizbize Toplantısı” (Just Us Meeting). The story had begun with a capacity of only 20 thousand vehicles with nearly 600 employees. 40 years later, the plant had reached a capacity of 400 thousand vehicles, had 7 thousand employees and was exporting to 80 countries. It had all begun with assembly and was now continuing with R&D. There were other important points that could not be expressed in numbers, but were just as important as they were. After all, vehicles

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were not the only products of the institution; Tofaş had provided job opportunities for thousands of employees and led to the emergence of hundreds of suppliers, trained thousands of young people, formed one of the main arteries of the Turkish industry, and initiated the creation of an industrial city. Newspapers published on February 13, 1971 had put the inauguration of the company on the front page. Then-prime minister Süleyman Demirel had said in his speech that once known for artisans manufacturing towels, knives, and carriages, Bursa was getting ready to manufacture cars and that the Turkish industry was now moving from Istanbul to Bursa, Edirne, Central Anatolia, and Çukurova.2 Turkey is rapidly stepping away from being an agricultural society. Turkey will become a society of industry and services. The construction of an automobile factory in Turkey is one of the best signs that Turkish society and the Turkish people are adapting to ways of an industrial society and the life style of industrialized nations. Industrialization is a massive challenge.

40 years later, Turkey’s process of industrialization still continues, but the realized parts of this statement show that Tofaş has thoroughly fulfilled its commitments. It had done well by the ideology that its founder Vehbi Koç expressed quite plainly: “I believe that every nail hammered and every investment made is a great service to our country. Only through these investments will job opportunities abound, our country will develop rapidly, and the living standards of our people will improve.” JEEP ARRIVES IN TURKEY, AS PART OF TOFAŞ

July of 2011 was marked by the launching of a new brand in Turkey, as a result of the first step of the reflections of the global integration process between Fiat and Chrysler. The Jeep brand was included among the brands managed by Tofaş, which already held an important place in the Turkish market with the five brands it represented. DOBLÒ IS RE ADY FOR THE U. S . MARKET

The Doblò of Bursa was getting ready to hit the roads of America. The vehicle was about to expand its reach in 2011 by stepping into the North American Market through the letter of intent signed for the Doblò U.S. It would be ready for the U.S. in 2013. As a product of the synergy Fiat and

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Chrysler created worldwide, the Fiat Doblò was going to be exported the U.S. and Canada after more than 80 countries and an investment of 360 million U.S. would be brought to life to complete the process. As the Director of the R&D Product Engineering, Çağlar Şahin describes the thrill the prospective project created as follows:

In 2011, Jeep joined the brands distributed by Tofaş.

As a product of the synergy Fiat Chrysler created across the globe, Fiat Doblò will now be exported to the U.S and Canada along with more than 80 other countries. Apart from constituting a new market for the Fiat Doblò, these countries entailed new legal obligations, a genre of clients with different expectations, a project team spread across three different

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countries, and, most interestingly, working with an eight-hours time difference. While this little detail did not seem to matter much initially, we realized soon, once the project was initiated that it meant meetings at the break of dawn for some and at midnight for others.

NEWS FROM MUSEUMS AND EXHIBITIONS

Having brought diversity to the cultural life of Bursa, the Tofaş Museum of Anatolian Vehicles made headlines with another exhibition it launched in 2011. The theme was toys and games. Held between May 2011 and October 2012, the exhibition’s curator was Naim Arnas. The exhibition presented a selection from the private collections of Both Arnas and Rahmi M. Koç and included new and old toys. The exhibition generated wide interest with its presentation of the development of toy technology and thousands visited the display. An event organized at the Rahmi M. Koç Museum in Istanbul was also one of the most interesting occasions of 2011. Brought from the U.S. and restored through the support of Tofaş, the 1937 Fiat-made ALN 56 model motor train La Littorina came to be displayed at the museum. Starting as of March 2011, La Littorina was on loan from The WolfsonianFlorida International University for 10 years. Another important arts event Tofaş sponsored was the Turkish Pavilion at the Venice Biennial’s 54th International Art Exhibition of 2011, one of the most anticipated and visited contemporary international art events in the world. Ayşe Erkmen was the artist featured with her work entitled Plan B at the Turkish Pavilion brought to life through the collaboration of Istanbul Culture and Arts Foundation. Erkmen’s work was displayed at the Artigliere in Arsenale, one of the main exhibition areas of the Biennale. The exhibition was open from June 4th to November 27, 2011. The Turkish Pavilion had been co-curated by Fulya Erdemci and New Zealander art critic and curator Danae Mossman, who had previously worked with Ayşe Erkmen on other projects. Tofaş’s sponsorship of the Turkish Pavilion at the Venice Biennale continued in 2013, 2015, and 2017 as well. TOFAŞ ACADEMY

A special department was established within the Tofaş factory in Bursa in 2011: as Tofaş’s education, development and communications platform, Tofaş Academy was created as a unique academy that provides learning and growth possibilities on a par with world standards in line with the corporate values and strategies of the company. Focusing on functional and corporate development, the Academy would offer education to a broad spectrum of students including Tofaş employees, college students, suppliers, families of workers, dealers, and services and would therefore

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Right page: Providing better educated, trained, and experienced human resources for the automotive sector‌ That was the idea behind the establishment of TofaĹ&#x; Academy launched in 2011.


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assume a critical role in the company’s journey into the future. Through this endeavor, dealer employees also found the opportunity access the training they needed in a faster and easier manner. At the heart of the Academy was the idea to bring better educated, equipped, and experienced human resource into the automotive sector. Regarded as “Turkey’s Largest Educational Academic Design Project,” Tofaş Academy had declared its mission as follows: • To create an organizational culture that learns and shares in the entire value chain; • To present lifelong learning possibilities sensitive to differences; • To ensure adoption, diffusion, and development of the corporate culture. CEO Cengiz Eroldu gives importance to the values, Tofaş Academy adds to the company: We are talking about concepts such as renewal, adaptation to new technologies and customer expectations, updating ourselves for this purpose, networking to collaborate with the best of talents we can find on a global scale, and working with platforms. Behind all this should be an organization that has a high technical capacity and the competence to produce solutions centered on new people. Therefore, we prioritize creating an academic infrastructure and environment in which our employees can grow. We are developing Tofaş Academy as a center of comparison on a global level in terms of the best applications. We consider lifelong education an important element of growth and competitiveness as a living reality for the entire value chain. Tofaş Academy lends its support to the entire value chain; it develops programs to offer education to the employees of our dealers and suppliers to create a higher value.

Today, Tofaş Academy represents a platform of growth that possesses the physical conditions and content infrastructure equivalent to the related departments of universities. Equipped with hundreds of academic modules designed for different individual styles of learning and training its own specialized instructors, Tofaş Academy aims to increase the individual and team performances of its employees and to generate solutions that parallel the company objectives. Trainings are categorized under three main headings: Corporate Development Programs, Professional Development Programs, and Personal Development Programs. In this context, Human Resources director Burhan Çakır finds Tofaş Academy to be a key organization to ensure the permanence of the know-how Tofaş has and to carry that into the future. Through Tofaş Academy, we are combining the know-how of our company with world-class learning and growth possibilities to transmit them to our employees and partners. Thanks to the Academy, we had

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the opportunity to offer education and growth possibilities to more people in our value chain. Our employees attained new competence such as tutoring within the company and field specialization. The increase of recognition within the company, on the other hand, had a positive impact on their motivation. Through this, the level of satisfaction and perception in taking advantage of education and growth possibilities increased by 30% in our employee loyalty surveys.

“MY PROJEC T”

Tofaş initiated a very exciting program entitled, “My Project” in 2011, in order encourage implementation of innovative ideas of its employees and developing collaboration. The purpose of the project was “to create a concept for/on a mobile vehicle that could carry passengers or loads and the development of a prototype.” Addressing the engineers at R&D, the initiative was a kind of “seeding within the company” that would stir and put into motion their creativity. The fundamental objective of the competition was to support research in vehicle or product design, bring out innovative and creative ideas, reveal the skills and inquisitiveness of Tofaş employees, and strengthen interdisciplinary work habits. R&D employees were told, “Design a project for anything mobile you dream of and apply to get a funding. You will receive a certain budget and you will make your dream come true.” Taking start in 2011, the project generated –and continues to generate- interesting ideas. One such example was a work on self-driving automobiles. Created in late 2015, the 2106 test-drive of “My Project 2015-Vehicle on Track” Let me drive, which was a self-driving prototype, was conducted at the track of the roundabout in front of Building 1 of Tofaş. In another project, a sensory warning was developed to prevent the front-seat passenger from hitting the sidewalk when opening the door. Another project foresaw a new cooling system that would replace airconditioning. The project was extended to other departments of the company as well. This was the kind of encouragement needed to bring to life, dreams and ideas that were not part of the company official plans and objectives, but desired by a group of people that thought, “Wouldn’t it be great, if we could do that?” “My Project was an interior support mechanism based on creativity and imagination.” It was an integral part of Tofaş’s peopleoriented approach. “My Project” grew large enough to encompass all areas of the company and external collaborators.

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THE REL AY R ACE CONTINUES

Having celebrated 40 years in production, Tofaş had manufactured 308 automobiles in 2011, which made up for 28% of the entire industry and had taken 23% of the market share with 181 thousand vehicles in exports. The company generated 2.6 billions U.S. Dollars of exports and had a foreign trade surplus of 410 million U.S. Dollars. As Tofaş moved into a new year, the CEO was changing as well. After serving as CEO for five years, Ali Pandır left the company on January 20, 2012, leaving Kamil Başaran in his place. Having worked at the Quality Directorate in 2010, Erdal Şimşek remembers Ali Pandır as a highly pragmatic leader: He could easily get to the essence of complex issue with only a few questions and break it down. He would rapidly see opportunities, but would also keep the company on track. He was particularly good with numbers. When you explained your idea with solid data, he would be convinced and go after it with great determination.

The company’s new CEO Kamil Başaran had begun his career in Turkey at Tofaş in 1984. He managed the engineering works concerning the increase of production capacity from 30 thousand to 150 thousand vehicles until 1993 as the manager responsible for investment. Between 1993 and 2004, he worked, in consecutive order, as Car Body Unit Deputy Technical Director, Lean Manufacturing Director in addition to his position as Plant Director, and Doblò Platform Director and Purchasing Director during the product development phase of the first generation Doblò. Due to his critical role in and outstanding work he did on the development and production of Tofaş’s export cars, Başaran was appointed to Fiat’s organization in Torino in 2004. Between 2005 and 2007, he worked as Supplier Industry Development and Cost Management Director within Fiat-GM Worldwide Purchasing in Italy. After 2007, he worked as the CEO of an automotive supplier companies Martur A.Ş. and Fompak A.Ş. In short, he was highly familiar with what it meant to be a part of Tofaş.

In early 2012, Kamil Başaran was appointed as CEO of Tofaş.

FIAT VEHICLES EVERY WHERE

One of the most important changes in 2012 was the facelift of the Fiat Linea. The New Linea was taken off the assembly line with a ceremony held at the factory on April 9th. In 2011, Fiat Linea was the leader of her category and had continued to be so until the launch of her new and improved image in April. Later, in the January-May 2012 term, Linea became preferred by more than 10,600 customers and eventually received the title of Turkey’s best-selling automobile that year. The Punto, Fiat’s hatchback in the smaller category of cars, was renewed in terms of its design and accessories and was launched in Turkey.

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The new Fiat Punto replaced the Fiat Grande Punto and the Fiat Punto EVO model family that had sold more than 47 thousand since 2006. Representing the Fiat brand of the MiniCargo project, Fiorino received an award from the UK this time: Van Fleet World was a leading British magazine focused on commercial vehicles. At the end of the evaluation of the magazine’s expert editors, customers, and fleet rental firms, Fiat Fiorino was chosen as the “Best Light Commercial Vehicle of the Year” as part of the Van Fleet World Awards 2012. The global launch of the New Fiat Doblò Cargo’s XL version took place at the 2012 Hannover Commercial Vehicles and Supplier Industry Fair, the leading commercial and industrial vehicle organization. The new version exported to more than sixty countries was launched in the European markets, characterized by its flexible volume features. … AND THE JOY OF THE 4 MILLIONTH CAR

The beautiful, charming orange Fiat Fiorino… The 4 millionth vehicle… When it was taken off the assembly line, among a confetti shower, during the ceremony held at the Tofaş factory on September 12th, it was surrounded by those who had manufactured it. Present were the Chairman of Koç Holding and Tofaş Boards Mustafa V. Koç, Koç Holding Chairman of the Board, Temel Atay, Koç Holding Automotive Group President Cenk Çimen, Tofaş CEO Kamil Başaran, company executives, managers, workers, who were joined online by Istanbul office employees, watching the ceremony live. After the ceremony, the 4 millionth car remained at the factory until September 15th and became unique with the signatures it carried; in three shifts, all Tofaş employees covered the car with their signatures. After the celebrations were over, Fiat Fiorino was brought to the Tofaş headquarters in Istanbul and was signed by the employees there as well. Fiorino’s next journey was to the Tofaş Museum of Anatolian Vehicles, where it assumed its place on display as the witness of, one of the important milestones of Tofaş. NEW FIATS, NEW MODEL S

Having become legendary with its inner city driving features, Panda was combined with the environment-friendly Twinair engine and automatic transmission, giving birth to the New Fiat Panda Duaologic. The New Fiat Panda was put on the Turkish market. In addition to the Twinair fuel engine and automatic transmission, it offered users more than what was expected of an urban car, with its spacious interior. It was launched with two kit options as “Pop” and “Lounge.” Lancia’s mini urban car Ypsilon was completely renewed and put on the market in Turkey in 2013. Representing the fourth generation of this

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model, the launch of the vehicle was held in Izmir between May 2nd and 5th. It had two kit options named “Pack Dolce Vita” and “Pack Dolce Vita Magic.” “500L in Turkey!” was the headline newspapers used in their automobile pages in May of 2013. The five-door member of Fiat’s legendary 500 family, the 500L hit the road in Turkey with its Pop, Popstar, and Rockstar versions. Equipped with crossover features, the Rockstar kit option was globally launched for the first time in Turkey. ASSOCIATION OF RETIREES: THE “ TOFAŞ ALUMNI”

Some people enjoy having their photographs taken with their automobiles. In fact, just as they pose, they put their hands on some corner of their car. They want to put on record the “relationship” or the sense of possession they have with them. The exact pose of someone working at the assembly lines of an automobile factory may appear the same to us, but the dynamics are quite different. The latter touches the vehicle as his picture is being taken, but the essence of that sense of possession is quite different, as he is the person who actually “made” that car. There is no doubt that his contribution is partial, but he knows, better than anyone who simply paid to buy a car, the story of a car that begins with a flat sheet metal and then hits the road. He knows the breath of the birth process, the unbreakable bond between each link of the chain, and that he is an indispensable buckle in that chain. Thus, his is the photograph of the years spent working on the equipment with his mind and body, and the pride he takes in contributing to the production and its outcome, along with his colleagues. We must, therefore, look more carefully at that photograph. Only then, can we understand that when touching that car, he is actually touching his own life, one that he can never let go. Does retiring from an institution mean completely getting out of that institution’s life? Perhaps so, for some institutions and some people. However, that is very hard to come by in institutions like Tofaş. For, leaving behind the company the day after your retirement means leaving an entire world behind, leaving that “touch” behind. If you are part of a multifaceted, multi-phased production, almost akin to a cosmos, and if you have dedicated your years to the life inside that cosmos, you can’t easily get out of it, nor would you want to. That universe of which even your family is now part has become your way of living and you feel the urge to be part of the “new” even after you retire. Perhaps that new life should recreate a different version of that cosmos, to keep you standing. In order to do that, you meet with others like yourself. Suddenly you realize that you have created a setting that gives you an unexpectedly huge energy and infinite happiness. Tofaş retirees were lucky in creating their new setting. For, they were numerous and highly aware of sharing the happiness they could all enjoy together. Due to their long-standing history of being part of Tofaş

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and of Bursa, they had no trouble coming together in that new chapter of their lives. The company’s embrace of its retirees with great acumen and gratitude also prepared the groundwork for the birth of the principle, “Tofaş for life.” The official inauguration of the Association of Tofaş Retirees was brought to life within the company; joining the inauguration held at the Tofaş Recreational Facility on September 13, 2013, CEO Kamil Başaran had duly referred to the retirees as “Tofaş Alumni.” Following a meeting held with new members of the company, Başaran joined the retirees and expressed his thoughts on the value of know-how as follows:

Referring to themselves as “Tofaş Alumni,” Tofaş retirees founded an association in 2013.

Last month, I joined the opening and orientation meeting of our Association of Tofaş Retirees. I met with our valuable retirees or “graduates” I refer to as “Tofaş Alumni” and the new “students” that have recently joined our family. These two special meetings that took place at short intervals have allowed me to reevaluate the know-how that has brought Tofaş to the present in the best possible way. Those who experienced the history of Tofaş will recall the difficult challenges we faced at different periods in the last 45 years. A pioneer in the history of the Turkish automotive industry, Tofaş stands here today with its skill of managing the changes that the sector, the economy, and all the other circumstances you can imagine generated. I am certain that the new generation of Tofaş members will be highly effective on the path that

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leads to the future with the know-how they will receive from this strong family structure. As we stand on the shoulders of the successful project from Tofaş’s past, we will have new accomplishments with the strength of this family structure.

When talking to the retirees that refer to themselves as “Tofaş Alumni,” you may notice that the unique fabric particular to Tofaş is internalized by many of its employees. Doesn’t the word “alumni” imply being educated there in the first place? A network woven together with the worker who began his career by tightening screws and the young engineer who stepped through the doors with his diploma in hand at one of the most important actors of a huge industrial movement… Living together in the same city, creating another city within that city… Always together, side by side, hand in hand… They are the ones that made Tofaş grow, the ones Tofaş raised… In emphasizing how the title “alumni” coincides with Tofaş’s vision as a school in and of itself, Turgay Durak also involves the supply industry: As of the day it hires employees, Tofaş trains them with intercorporate education and the tradition of apprentice-semiskilled-master-foreman tradition and encourages them to work as a team per the pacta sunt servanda vision; therefore, “Tofaş alumni” is a good analogy. Similarly, Tofaş has executed the finest examples of methods such as bench and mold investment advance, technical staff training, and mid-level managers, and technical know-how transfer for the establishment of the automotive supply industry.

“I used to know all the parts of the Murat 124 and 131 by heart. Much like Yılmaz Gözne, I used to count numbers in my sleep. My mother would worry, “He is mumbling numbers instead of girls’ names in his sleep,” says Rahmi Aydın, who worked as a courier for the factory for years, between Istanbul and Bursa and still regrets, after 45 years, delivering the letter he was supposed to give to Marinetti late; Sabri Şen, who never neglected to buy coffee from Kurukahveci Mehmet Efendi on his way back from Istanbul to Bursa; Osman Soyoğlu, who says, “What work? I might as well say I slept there,” and still saves the delivery receipt of the first automobile off the assembly line, having “entered the factory as an engineer and graduated as production director after 35.5 years”; Muhittin Yılmaz, who is one of the leading actors of the “We are Tofaş” trainings; Yaşar Aydın, who presided over four co-ops and managed their organization while working at the personnel directorate; quality control officer Ferit Akın, who not only says, “Aslan Bey used to drink my tea every morning,” but boats, “no automobile could leave Tofaş without my signature, it would drive around inside the factory for a month,” when he worked as the final quality inspector; Turgay Ala, who never forgot the joy he felt when he was chosen at the Koç Foundation meeting at the Koç

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Holding building; Engin Algür, who could never forget the sorrow he felt when the ceremony in which he would receive his tenth year badge like others he eagerly watched before him, was canceled due to the economic crisis of that year… These names and the memories they collected… They are only a few among thousands. TODAY ’S YOUNG BR AINPOWER , TOMORROW ’S TOFAŞ ALUMNI

There is most certainly a difference in the corporate identity of employees between the present and the 1970s. That sense of belonging is always prevalent, but what it entails changes over time. Having contributed not only the production, but the creation of the company and their efforts to offer solutions to problems as if they actually own the business undoubtedly have a different perspective than the ones currently using the global language of advanced technology. The concept of family is giving way to professionalization. Particularly the new generations do not have the tendency to work in one place for the rest of their lives. In addition to the technical skills of humans, social expectations have diversified as well; there is a transition from the old employee notion of “we earn our bread here, the company is our benefactor” to an environment in which employees increasingly learn new technology, develop their skills, and contribute to the company with their suggestion and brainpower. Under these circumstances, the relationship between employer and employees needs to be redefined, as it requires transition to a different level in which mutual exchange is increased. Equipped with better qualifications, the individual lends more quality to team play. The former notion of “I made it in, now I’m here till I retire,” is replaced by “I can advance my skills here and I’m doing a good job, therefore I am here.” The sustainability of a deeprooted corporate culture thus lies in the ability to perform this transition and transformation. Tofaş puts great emphasis on that. The only thing that remains constant here is to be proud of being a member of the Tofaş team… Tofaş is idealized by many young people in terms of business. As a student, that was the case for Bülent Ertürk of Bursa, a member of the young generation of Tofaş team; today, he is one of the engineers of Information and Communication Technologies. He began working at Tofaş in 2000, but he prefers to describe what Tofaş means to him before he offers information about what he does there. Moreover, he is more concerned with the meaning and productivity of his time there, rather than his retirement in the future. Tofaş holds a different meaning for people in Bursa. It carries a great significance for the city. When I was still in college, I would regularly drive past the factory; buses to Istanbul run by it. The question, “Could I work here one day?” was constantly on my mind. After military service,

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there was an opportunity and I took it to be able to work at Tofaş. Finally, I began working at IT unit. I worked as a software engineer for 7-8 years. We developed the needed applications. Later, I continued as a system analyst. We worked on many projects with Italy. Our work is quite active. We are constantly in collaboration and communication with different business groups and partners. There is saying I like in the IT world. “We have to take down the books from five years ago from the library,” they say. In other words, we have constantly renewed ourselves and be open to changes. I believe that worrying about your retirement in akin to annihilating your expectations. For, we are at a point where people need to be beneficial to their respective companies with the known-how they accumulate over the years. This accumulation is one of the future pillars of the company. We live in a period in which retirement age has exceeded 60; people should take care of themselves and improve their skills.

Mathematical engineer Aslı Ağaoğlu began working at Tofaş Oto’s IT department in 1996 as she was getting her Master’s in systems analysis at İstanbul Technical University. She was among the ones that experienced the merger of the factory and Tofaş Oto. I began working at IT as a software engineer. At the time, the two companies were separate. In 2001, Tofaş Oto merged with the factory. After I joined the Tofaş staff, I had a better understanding of the possibilities and size of the company. Next, I learned “database management” to manage the systems in which applications are written and data are stored. These managers are called DB. Once, I was sent to a training for server setup in Torino. My visa was for five days, but training ended in three. Management did not call me back on the last two days and told me to “go ahead and travel instead”. I have been at Tofaş for twenty-two years no; my position was changed last year and I moved to Koç Fiat Credit as a Director of System Planning and Development. I truly love my company. The new generation has this approach, “I’ll get in, work for a few years, then move to another company.” They even recommend it these days, “Work someplace for two-three years, not more than five, then work at other firms.” Yes, this may be suited for the present, but I never had any intention to leave Tofaş and look for another hon. I am happy about that because I live my company and the work I do there.

Aslı Ağaoğlu never had any desire to quickly leave behind the company she joined as a graduate student. She finds herself a bit old school, compared to the new generation. However, while the young seem to adapt the current approach of work principles, some, such as Eren Çopur, find it extremely valuable to work within a deep-rooted institutionalism. Living in Gemlik, electronics engineer Çopur chose to live close to his family despite

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possessing a green card, and, after a few years of work experience, began working as a software specialist in the IT department in 2014. This “Y” generation of ours is a bit ungrateful; we get bored easily and our sense of belonging is not as strong as our elders. What matters to me most is to be peaceful and happy at my workplace and to enjoy going to work. Among the things I refuse to give up are my own happiness and peace of mind. From that perspective, you cannot continue working in this company if you’re not happy and peaceful. I consider myself quite lucky in that respect. The organization I work for, the company I am at, my relationship with my manager tie me to the company and to the institution. Our work is intense, but at the same time, I feel great to learn new things and expand your horizons. It feels good to set the bricks that will pave your future road in the long term.

After receiving his Master’s in business administration, Eren Çopur is currently doing his PhD in economics at Uludağ University. This alone constitutes an example of the care the new generation give to self-growth and diversification of their fields of knowledge. “When you channel yourself too much into technical fields, the other legs may become shaky. This is why I did a Master’s in business administration. Our technical mastery increases in time, but I thought it was important to attain managerial skills, learn what the economy is and how it should be managed, and how marketing works.” According to him, Tofaş is not a “grim-faced” company. He feels embraced, valued, and cared for at the company. OPAR TURNS 40

Recognized well by its yellow and blue colors by Tofaş users, Opar celebrated its 40th anniversary in 2013. This leading company of spare parts was founded on May 2, 1973. It had played a significant part in solidifying the image “Tofaş spare parts can be found everywhere.” Operating with 100% Koç Holding capital from its establishment onwards, the company until 1997, the company equaled its shares with Fiat in 1997. Next came the merger with Tofaş Oto Ticaret A.Ş. The existing number of personnel including office and fields workers was 1921. In 2001, following the merged of Tofaş Oto Ticaret A.Ş. and Tofaş Türk Otomobil Fabrikası A.Ş., it became a registered brand of the company. In 2012, Opar initiated direct communication through its website with the retail points selling spare parts in the industry and provided retailers and Tofaş main dealers and with the opportunity to order parts through the website. This way, it significantly contributed to helping dealers expand their business through special campaigns unique to retailers. In 2013, spare parts giants undertook an important collaboration; one of the partners was Opar, whereas the other was the leading automotive supplier Magneti Marelli Spare Parts and Service Unit.

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TIME MACHINES EXHIBITION

Launched at Tofaş Museum of Anatolian Vehicles in June of 2013, the Time Machines exhibition was the museum gallery’s third exhaustive exhibition. Comprised of more than a hundred-year-old works, the exhibition displayed a collection of 1800 objects including clocks, clock parts, tools used in clock making, and various ephemera. The exhibition was based on a selection from Naim Arnas’ collection. The theme of the third exhibition Arnas curated for Tofaş was based on the idea that much like cars, clocks were machines with basic parts. The exhibition remained open from May 2013 to May 2015 and was visited by 56,670 people. GOLD PL ANT LEVEL AT WCM IN 2013

The last supervision to grant the third and final level at World Class Manufacturing (WCM) took place in November 2013. Tofaş had made great efforts to maintain its lead in the category and everyone was convinced that their efforts would be rewarded. Progress had been quite rapid and successful: in the early years of the program, had Tofaş won the “Fastest Growing Plant” award. Then came the Bronze level, followed by Silver level in 2009, thus becoming an exemplary establishment. Now, it was time for the Gold level. Applied in 175 Fiat Chrysler Group factories and the factories of the group’s 350 suppliers, WCM had been initiated in 2006 through the support of Japanese specialists to overcome the financial difficulties

Former Tofaş CEO and Fiat EMEA Regional Operation Director at the time, Alfredo Altavilla signs the golden automobile.

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of the period and to lend more productivity to the plants. It was thus applied at all the establishments of the group. The evaluations were held on November 13-15. They were conducted by the Fiat Group’s WCM consultant Prof. Hajime Yamashina and a team of Fiat executives. Since the implementation of the program in 2006, production standards at Tofaş were constantly on the rise. Accordingly, work accidents had improved by 97%, exterior quality indication by 68%, productivity by 35%, and machine failure by 75%. These evaluations carried Tofaş to the Gold Level. Production Director Recep Temizesen shares the thrill he felt on the day the words “You’ve reached the Gold Level!”: The evaluation had been completed and the supervisor gathered everyone together. If we could get one more point, we would reach the gold level. However, we had failed to get the gold in the two previous evaluations and excitement was at its peak. Before he presented his evaluation, the supervisor said, “We hereby confirm that you are a Gold Level Plant.” A big round of applause was heard and everyone grabbed their phones. Immediately after the meeting, the automobile painted in gold was brought down and all our colleagues gathered around it. There was an atmosphere of festivity all around. I think that was the best part of the celebrations. Then came the official ceremonies and the award ceremonies, but this wave of excitement was the best. Everyone signed the golden automobile, which was then taken to Istanbul for the rest of the company to sign. The slogan was as follows: “Your signature is under this success!”

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When Tofaş employees received word that they had been granted the Gold Plant level, they celebrated joyfully in front of the factory. They signed the golden car with the motto, “Your signature is under this accomplishment!”.

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Truly enough, the success belonged to everyone, to all Tofaş members, who showered the symbolic golden automobile with confetti and shared the joy all together from executives to field workers before going back to work. 2013 was inscribed in golden letters in the company’s own history. The factory’s gold level achievement was celebrated through a series of events. One of these was organized at the headquarters in Istanbul, which included CEO Kamil Başaran, along with Fiat EMEA Region Operations Director and former Tofaş CEO Alfredo Altavilla. In sharing his excitement with the rest of Tofaş team, Kamil Başaran stated that from the first day of the WCM evaluations Tofaş entered alongside all Fiat Chrysler plants in the world, the company had achieved a string of accomplishments that made everyone proud. Today, we have reached the gold level among the 175 Fiat Chrysler Group plants and 350 suppliers across the globe. Inscribed in our history in gold, this accomplishment belongs to the entire Tofaş family. We always sought self-improvement and renewal. Even in the most challenging of times, we derived our strength from within. In the future, we will undertake the increasing competition in the best possible way and increase our competence. I thank you all for the respect you have for your work, as well as your faith, dedication, and motivation.

What did being a “gold plant” bring to Tofaş? In explaining the various phases of WCM, Recep Temizesen explains the meaning this title holds for Todaş and for Turkey. This process has three main phases. The first is the “reactive” phase. That’s how you approach all your problems. Of a problem arises, you have to find the root of that. Then, you develop solutions accordingly. This means rapidly solving the problem you encounter such that it won’t repeat again. The second one is the “preventive” phase, in other words, catching a problem before it arises. This eliminates your losses. The third is the “proactive” phase. You resolve the problem as you put the work on the bench. Since you already know all the potential problems that may occur, you can do it. Reaching the proactive phase does not happen at once. In order to get there, you need considerable know-how and experience. So, to reach the golden level, you must be successful at all three phases. That is what the golden plant is: A factory that can resolve problems before they occur! If you can spread this to your suppliers and your environment, then you become “world class.” This is particularly important with respect to suppliers, as you meet with them with long specifications in hand. This condition increases that firm’s prestige as well; if, for example, someone else goes to that supplier for business, he can say, “If they can do it for Tofaş with in

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compliance with all their specifications, then I can work with them too.” And when he does, he says, “Do it the way you’re doing it for Tofaş.” What does that mean? Of you can spread this culture everywhere, you are developing the entire country.

In reality, the WCM had always constituted a guideline for Tofaş to do better. By improving the methods, applying them, and adapting employees to them, amelioration in production had been brought to a global level. The next target was to attain a hundred percent. In other words, the level of “perfection” expressed in 100 points. Having served as the Vice Chair of the Tofaş Boar until 2004 and the head of the international business development department of Fiat SpA, Jan Nahum confirms this perfection in evaluating Tofaş from where he stands today. Through the skill and know-how of its employees and engineers, Tofaş has become the most effective company of its own licensor in the world. As I managed the international business development department of Fiat for some time, I am familiar with all its factories across the world. Tofaş is Fiat’s best plant in the world. It is number one! The Ducato aside, it is an incredibly competitive production center in light commercial vehicles.

DOBLÒ DRIVES OFF TO AMERICA

In the June 2013 issue of Tofaş Gazette, CEO Kamil Başaran shared the news of an important investment. As you all know well, we are currently working on new product projects to build our future. I am happy to share with you that two of these projects were approved at the Board Meeting we had in Detroit on April 24, 2013. As a result of our partner Fiat Chrysler’s guiding contributions and our long-winded efforts, we are going to make an important move in exports in the Turkish automotive sector through the projects of the Doblò America and the renewal of the existing Doblò model. The Fiat Doblò that came to life thanks to your efforts in our Bursa plant will be appropriated to the standards of the American market with an additional investment of 268 million Euro and will be exported to the U.S. and Canada under the RAM brand. The existing Doblò model, on the other hand, will be renewed and made even more competitive for Turkey and other foreign markets. We have spent a great effort to adapt the Doblò model, a success story for Tofaş in and of its own, to American standards and we have completed the technical process. Starting the exports of the Doblò America will constitute yet another success story for us.

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The success story was already written. A breaking point for Tofaş, this project assumed its place in the history of the company as an arduous period that included a string of experiments, tests, and productions that had been markedly different from the previous ones. The conversion of this process into an accomplishment was made possible through the dedicated collaboration of the Tofaş team and its drive to overcome the impossible. The Doblò America project also known as the Promaster City, targeted the development of a passenger and commercial vehicle for the American market based on the Doblò model that had already been in production for four years. When the team took on the project, it was happy to develop a car for a massive market such as the America, but was also equally worried about the needs and demands of that market. Both the legal requirements of the vehicle and customer demands of a country much different than that of Europe, not to mention its simultaneous export to Europe made the task more difficult. Moreover, the vehicle was to be manufactured on the existing production lines of a vehicle that already had more than 200 body types, 7 engine options, and more than 100 versions. In addition, the project was to be completed in 15 months, six months shorter than the normal production period of 21 moths. New applications for Tofaş, the rear camera system, tire gauge observation system, and curtain airbags were among the other challenges.

Doblò America, or Promaster City was the new version of the Doblò manufactured for North America and Canada and would be sold under the RAM brand. It was shipped overseas in the last month of 2014.

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Recognizing the ProMaster City as a cornerstone in his career, Project Director Ömer Keskin was one of the closest witnesses of this period along with his team. The perfect implementation of the new technologies and different standards and the smooth flow of the project fell on his shoulders: In Turkey and in Europe, the legal obligations are registered and approved through the tests you conduct in front of a representative of the state. In the U.S., the documentation of your declaration is deemed sufficient. If need be, testing is done in the presence of officials. Therefore, legal obligations and their interpretation are of great importance. A simple misunderstanding or misinterpretations can have very heavy repercussions. As the communization of technical standards between Fiat and Chrysler were still ongoing, some of them had not yet been clarified. Therefore, we were moving forwards with what we had available. The standards on paint were completed six months before the project was completed and were much heavier for the American market compared to Europe. In order to complete it, we had to establish an additional facility within the existing paint shop. Tofaş’ agility made a difference once again. In a short period met with much surprise and admiration by both the Fiat and Chrysler management, we were able to put into operation the additional facility without delaying the production date.

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A number of incidents concerning the rapid initiative of Tofaş executives and teams occurred during the RAM project. Another incident Ömer Keskin could not forget was about the test-drive of the ProMaster City. The pre-production test-drive of the several models Fiat was developing at the time was to be conducted at Fiat’s special test track in Torino by the FCA upper management. ProMaster City was not on that list, but at 9 PM, we received news that they wanted to test-drive our vehicle on the same track. Some of our colleagues at Fiat said that the vehicle had to be ready and the next morning at 10 AM, but that they were sorry to say that since they were informed too late, it would be impossible. As Tofaş, our speed and determination was boundless in all projects, but especially in this project that had a very unique meaning for us. From the moment we received word, it took all of us from Tofaş executives to field workers a total of 35 hours to find the vehicle, prepare it, send it from Tofaş to Fiat to put it on the test-drive track. In fact, we had delivered the vehicle one hour before the deadline. Today, our colleagues at Fiat recall this incident during our chats and still express their admiration.

Manufactured for North America and Canada, Doblò America set out on December 3, 2014 following a big ceremony held at the factory. The ceremony of 1000 participants, which included the prime minister and state officials of the period, was a celebration of Tofaş’ representation of Turkey on a global scale. Prior to exports to North America and Canada, Doblò was being exported to 80 countries. It was possible to see Doblòs on the streets extending from the Ivory Coast and Ghana to Argentina. There were hardly any countries left in Europe. However, manufacturing the Doblò and exporting it to Detroit, the cradle of the automobile industry, was a singular source of pride for the Tofaş teams. The American name of the new Doblò was ProMaster City, to be sold under the RAM brand. As mentioned above, the process had moved quite rapidly and reduced from 21 to 15 months from approval to the release of the first vehicle. The overall design was completed in Turkey, style work was done in Italy and crash tests were conducted in the U.S.A.. At first sight, there American Doblò was almost identical to the others, but important modifications were made in the interior. The external airbag and head airbags were installed; an engine and transmission used exclusively in America was implemented, which required modifications in engine volume design; the wheelbase of all the exported vehicles were longer. Manufactured “as many as the streets of the entire country,” the Doblò was now driving towards the north of the American continent. Prime Minister Davutoğlu delivered a speech at the ceremony: “If late

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Vehbi Koç had been here, he would have been greatly pleased to see that his motto ‘My country exists; therefore, I exist,’ brought to life. Truly enough, today is a great day to be proud. I am very pleased to join the ceremony marking the start of the Doblò America exports.” Davutoğlu further added that the total export of the automotive sector amounted to 3.3. billion U.S. Dollars in Turkey in 2002 and that the exported Doblòs would be almost be the equivalent of the exports of the entire automotive sector. In his speech, FCA EMEA Region Business Development Director Silvia Vernetti emphasized that the production of the Doblò for the American market was a milestone for Tofaş and a clear indication of its quality. In the past years, Tofaş has been able to attain a structure that allows its production capabilities and the constant improvement of the knowhow of its employees through the investments it has made in production technologies in the past years. By investing in the future, we are strengthening the current position of Tofaş and support its potential future achievements in the Turkish and foreign markets. As FCA EMEA, we are structuring our production center strategies in a manner that increases total production and bring impetus to export figures. Turkey’s Doblò exports to America constitutes an important step in bring our strategy to life.

Holding a place in this market was not an accidental success. Doblò had reached this point with a series of awards and first-prizes since the day of its release. Tofaş had renewed itself with the Doblò, made a name across the globe, and proven to be a production center on an international scale. Now, the most powerful and durable version of the Doblò had been manufactured and 76% of it had been locally manufactured. Doblò had conquered the most difficult market of the world. The target was to export 175 thousand vehicles to America by 2021. ProMaster City was put on the market as the vehicle with the highest towing capacity and lowest fuel consumption in its class. Having received the title, “Most Environmentally-Friendly Commercial Vehicle of the Year” in the U.S. in three consecutive years including 2017, ProMaster City continues to make Tofaş proud. FIGURES OF 2014 AND A NEW INVESTMENT

The local elections of March 30, 2014 had created a slump in the market. When increase on taxes was coupled with the financial market turbulence, the automotive sector was affected by the slump and a narrowing of 35% was observed. On May 13th, Turkey was shaken by a tragic disaster; a fire caused by electric leakage at a mine in Soma led to the death of 301 miners buried under the debris. This was the highest number of casualties in a mining accident in the history of the Republic. The disaster brought to fore job safety

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and was debated for a very long time. Starting with automobile plants, many factories in Bursa halted production for a day to observe the loss. Meanwhile, Fiat shareholders approved Fiat’s merger with Chrysler in August of 2014. The new company would take on the name Fiat Chrysler Automobiles after the merger and would be established in the Netherlands. Despite the stagnancy and troubles in Turkey, Tofaş’ figures continued to grow throughout 2014. Let us take a quick look at the figures first and then put on the record a huge investment made at the end of the year: The first steps of a surprise project that would change the game in Turkey in a year… In 2014, 19% of all vehicle production in Turkey was completed at Tofaş with more than 222 thousand vehicles. While the Turkish automotive market finished the year with 10% shrinkage at a level of 770 thousand, Tofaş reached a 12% market share and 92 thousand vehicles in sales with its six brands. 89 thousand of these were under the Fiat brand. Net sales revenue increased by 5.7% compared to the previous year and reached 7.4 billion Lira, setting a record in the history of Tofaş. With the size of assets at 7.1 billion Lira and real operating income at 533 million TL, Tofaş was once again at the highest level of its history. Net profit was 574 million TL. Hence, Tofaş had reached the highest revenue, profit, and size of assets of its history. As for exports: Despite the economic and political ambiguities in the exports market, Tofaş exported 142,281 vehicles and generated a revenue of 4.2 billion TL. A foreign trade surplus of 353 million U.S. Dollars was generated. The export volume made up for 16% of Turkey’s total automotive exports. 2 billion U.S. Dollar part of Bursa’s total 11.7 billion U.S.D exports volume of Bursa belonged to Tofaş. According to the data provided by OIB (Automotive Exporters’ Association), Tofaş was ranked third in the sector with 2 billion Dollars in exports. It was among the top ten companies with the highest volume of exports according to TIM (Turkish Exporters Assembly). Tofaş was Bursa’s second, Turkey’s ninth largest industrial company and the highest tax payer of Bursa. In the last three years, it had paid the highest premiums in Bursa to the SGK (Social Security Institution). So, this was the strong background with which Tofaş was getting ready to announce a huge new investment to the public. As one of the largest production and R&D centers of (FCA) Fiat Chrysler Automobiles in the world, it continued making investments that would strengthen the competitive advantage of the automotive sector and the most recent investment was declared in the final month of 2014. The project in question was the production of a new sedan created in collaboration with FCA and two new models—a hatchback and a station wagon in 2016. A total investment of 520 million U.S.Dollars was to be made for the entire project. It was presented as a project that would reveal the success of Tofaş engineers on a global scale. CEO Kamil Başaran once again stressed the importance of R&D.

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We can all see the huge return of the value we attach to and the investments we make in R&D not only for Tofaş, but for our entire country as well. We not only pose the competence to develop products and technology for international customers of global automotive brands, but we also have reached a level to compete with the rest of the world in terms of the models we have developed and manufactured through the guidance of FCA. We use the advantages of being a financial strong company in new investment possibilities. As a more active player of the global market, we have made it our priority to generate more exports revenue with our new projects.

At this point, it would be beneficial to convey more detailed information about the 520 million-dollar investment. Kamil Başaran offers clues on the new sedan project that would come to be known as “code name 354” in the near future: We always observe our customers. We have to be close to customer expectations. We have thus embarked upon studies on a brand new passenger car. It also has an important feature: it has a very fertile platform. This platform constitutes a basis for the vehicles Tofaş will develop from this point onwards. On the road leading to 2012, we have entered this investment by giving much weight to this platform. With the 520 million Dollars, we have announced a huge investment with a very modest stance. With advanced technologies that will meet the expectations of modern customers in Turkey, we will develop this project at the R&D center of Turkey, manufacture the vehicles in Turkey, export a third of our production, and introduce the rest of the cars to Turkey’s repertoire.3

FEMALE WORKERS AT THE TOFAŞ ASSEMBLY LINE ON SEP TEMBER 1 , 2014

In Turkey, women’s integration into the workplace is progressing in direction proportion with their own struggles and the approach of the firms. Tofaş took an initiative about this in 2014; having completed their İŞKUR (Turkish Employment Agency) training, 13 women began working at the production lines at the factory. This step had been taken for the very first time; the next step would be to increase the number of female workers. Training was completed in August; as of September 1st, 13 female blue-collar workers assumed their places at the factory. Employed “indirectly” meaning outside of production earlier, women were now ready work in production.

3 Interview with Kamil Başaran, İş’te Hayat, Şelale Kadak, released on March 10, 2014, https://www.youtube.com/watch?v=Zl69oi1M_g8

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When touring the company today and watching the workers at production units, it gives great joy to see young and energetic female workers among then. Seeing them skillfully undertake many tasks seen as a “man’s job” and makes one thing, “I wish the number of male and female employees would be equal.” It is unclear when things will ever get to that point, but it is critical for their numbers to be increasing. As of 2018, that number has risen from 13 to more than 500 at Tofaş. Simge Meryemoğlu, who has been at Tofaş for several years, was recruited among the first group of women hired to work at production at Tofaş. When she first began work, she was assigned to the production line and was merely 20 at the time; obviously, it was no easy feat, but she somehow managed to handle it. When I was hired, I first began to work at the assembly line of the Doblò for several months. Everyone was looking at me with surprise at the time; without getting any help, all on my own, I was performing tasks that were traditionally done by men… It was met with considerable surprise. In fact, some people would come from other units just to see me, to see if I was really able to work…. Was it exhausting? Yes, especially at first…But, I never complained because I never wanted anyone to say, “She can’t do it.” On the line, you have to finish your task within a certain period of time before the vehicle passes you by. Otherwise, you drop down to the lower station, as you impede the work of your friend. You are constantly running around; another car comes along before the previous one is finished…

Women finally assumed their places on the assembly lines of Tofaş in 2014. Having completed their İşkur training, 13 women began working at the factory. Today, their number exceeds 500.

The presence of female workers in the production units of the factory surely elicit a different state of mind and behavior from men; the accounts reveal that this transition has progressed positively in every way. Ercan Uzun has been with Tofaş for 25 years; his late father Mustafa Uzun had worked in the construction of the factory, carrying sand and cement with a horse carriage. When production began, he joined the production team and “graduated” from the body production unit. Ercan Uzun, on the other hand, is at the paint production unit and has worked with the first set of female workers. I am the team leader of lean production. We have female workers on the putty line; there is 47 of us and 10 of these are women. Some apply putty, others brush over it. At first, they had a difficult time. We helped as much as we could. Now, they are very happy. Women’s presence on the assembly line seemed interesting first; would it work, not work, how do we keep the balance, we wondered. But we got used to it in time. Before, we could not even conceive of women working on the assembly line. Moreover, when women are present, men behave differently; they pull themselves together automatically. That’s actually good for us.

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Material Quality Laboratory employee Meral Başaran draws attention to another aspect of female presence in the production unit of the automotive industry: Women’s employment in the automotive sector allows them to be more knowledgeable about automobiles. I realize, for example, that I am now more conscious about the failures in a car. I understand better if a failure is caused by this part or that, because they all run by me. I can sense where that strange noise is coming from; if is it the glove compartment or the roof. If you’d asked me three or four years ago, I wasn’t really paying attention. Women were not knowledgeable about cars but nowadays, they can take care of their business. You don’t have to wait for someone to show up and help; you have more self-confidence. That’s a good thing.

Through the guidance of Meral Hanım, who combined her work with her personal life, perhaps women –and men– could be required to receive technical and practical training before getting their driving licenses…Perhaps women could give that training…Why not?.. Tofaş was one of the participants of a campaign Koç Holding supported in this context: The message of the HeforShe / UN Women Stand Together for Gender Equality campaign, which mobilized masses to defend gender equality and women’s rights in Society, was spread through the voice of Mustafa V. Koç in 2015: Gender equality is freedom for both men and women. First and foremost, it accepts that humans are individuals. It saves us from prejudices. In order to build a society that targets constant development, we must appreciate the value women bring to society and do the best we can for gender equality. A society without women is a society without a future.

The campaign was based on the fundamental idea, “Gender equality concerns not only women, but all of society. In a society of gender equality, both men and women benefit in social, political, and economic areas.” The campaign was aiming to mobilize 1 billion men in the world until September of 2015 to bring one half of society with the other for support. Women stood before the production line at Tofaş in 2014, but employees had been part of the company from the onset in various positions ranging from secretarial work to engineering… Cahide Parlatan Düzgüneş was one of the women writing that story: She was the first mechanical engineer hired to the company. She was a graduate of Osman Gazi University’s Department of Mechanical Engineering. At the time, the school’s name was Eskişehir State Academy of Engineering and Architecture. She had worked, in her words, “to the fullest” for 28 years at Tofaş. She had been employed when Murat 131 went into production— first in purchasing, then at R&D in her last few years.

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Tofaş is my home, my everything. Everything I have, I owe to Tofaş and I am very happy about that. I worked for 28 years, but when I look back, it feels like 28 days. My first job entailed analyzing the cost of parts brought from the supply industry; I was determining the prices of the auto parts. Un order to do that analysis, you must know the salaries, the general expenses, how the parts are manufactured, which operations they undergo at how long. Determining the cost would establish the sales price. We were doing all that without computers. Our work was very bust and intense; I worked at it with great pleasure and satisfaction.

TOFAŞ SPORTS CLUB TURNS 40

1974-2014… 40 years had passed since Tofaş Sports Club was founded. When the company was merely six years old, the club was founded by sports enthusiasts executives with very limited means, the club had moved forward through the support of employees and made it to its 40th anniversary. With unforgettable wrestlers, basketball, and sports figures under its umbrella, it had spent these forty years with championships, records, international achievements, and unforgettable matches, becoming an institution within the institution. The Club’s initiatives in recent years to spread and popularize basketball especially among young people had given rise to incredible results; thousands of young players had been able to display their talent through Tofaş’ collaboration with NGOs. In the last month of 2014, Tofaş athletes, managers, and coaches celebrated the Club’s 40th anniversary with a special evening organized at the Tofaş Social Facilities in Bursa. The special event was hosted by CEO Kamil Başaran and Tofaş Sports Club President Efe Aydan. It was also the opening of the 2014-2015 season and they changed the opening into a meaningful celebration by launching a new project. The project was called “A ball for each score, a hoop or each win” and was another civil society initiative. In collaboration with Bursa Metropolitan Municipality, the Club was going to donate a basketball hoop for every win in Bursa and a ball for ever point scored in the 2014-2015 season to primary schools in need in Bursa. The project was indeed the Club’s thank you to Bursa. In his speech, Efe Aydan noted that as Tofaş they give as much weight to social responsibility project as they do to their competition in the professional arena and that they regard encouraging the youth to play sports, keeping them away from bad habits, and developing a sports ethics in them as an investment for the future. Therefore, it was quite meaningful to celebrate the 40th anniversary as a sports club that had embraced the notion that true investment is investment made in people.

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A NEW TOFAŞ CEO IN 2015

There was a change of CEO at Tofaş in early 2015. After serving for three years, Kamil Başaran left his post to Cengiz Eroldu, who was also a longtime member of the Tofaş team. He was trained under the Tofaş umbrella. He began his professional life at Koç Holding in 1989. Between 1993 and 1995, he did his MBA in Italy on a Fiat scholarship. Afterwards, he began working in Bursa. Between 1995 and 2007, he assumed different positions in various fields of finance. He was appointed CFO in 2008 and held this position until he was named CEO in 2015. ENTERING A SPECIAL PERIOD

For Tofaş, 2015 was a year that marked the introduction of new model investments, fresh efforts to venture out to new markets, R&D works, achievements in financial and corporate sustainability, and, all in all, a period that could be considered a turning point in its own history. It was now able to plan both the near and the distant future and “shape the future.”4 2015 was also a year of successful results in production, sales, and exports figures: The total production of the company had risen by 24.9% compared to the previous year, reaching 278,252 vehicles. Reaching a capacity use of 104% as part of the double shift production program, Tofaş undertook 20.5% of the country’s entire automotive production on its own. 26% of the vehicles manufactured were passenger cars, whereas the remaining 74% were light commercial vehicles. Exporting to 80 countries, Tofaş increased its exports by 22.2% and reached 173,873 vehicles. Exports revenues were at 1.9 million Euro.

In 2015, Cengiz Eroldu was appointed as CEO of Tofaş.

EGE A

Investments on new models –i.e. Ne Doblò, Doblò America, and the Egea– family put into operation following the investment on the renewal of the MiniCargo in 2015, were recorded as the largest investment of the sector in history with 1.5 billion U.S. Dollars. As the second largest industrial company of Bursa and the sixth largest in turkey, Tofaş was designing and manufacturing cars for Europe and the U.S. and had become one of Fiat Chrysler’s two main R&D and production centers in Europe. The new sedan project and the subsequent hatchback and stations wagon models were coming to life in an atmosphere shaped by the self-confidence of an organization of this size. The idea to manufacture a new sedan after Albea and Linea was, in fact, dated earlier. Tofaş had seen the need for a new locally manufactured sedan; the demands from the Tofaş dealers supported

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Cengiz Eroldu, “CEO’muzun mesajı”, Tofaş Gazette 130/2015.

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Designed and manufactured after TofaĹ&#x; recognized the need for a new locally manufactured sedan (salon) car, the Egea family constituted one of the key turning points for the company.


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this view. There was no counterpart of it in the product range of Fiat in Europe. When the product development plan was evaluated, designing a new model appeared more logical than developing an older model to reach a different market size. Working as a project director at the R&D department at the time, Çağlar Şahin cannot forget a phone conversation he had after a board meeting held on May 28, 2010. After getting out of a meeting with Mustafa Koç and Marchionne, then-R&D director Kemal Yazıcı called me in the afternoon: “We are designing a new project. You have to put together a team and fly to Brazil,” he said. Recently, a similar work had been conducted at the Fiat factory in Belo Horizonte, Brazil, so we created a team to exchange ideas and do some research there. Our team included engineers experienced in product integration and design, as well as colleagues from marketing, finance engineering, and production technologies. We traveled to Brazil in June and that’s how the whole process began.

The first steps of Egea were taken. After that date, following studies of the first set of data, the economic evaluation of the roughly formed ideas would be finalized. The project was deliberated countless times until 2013. What kind of a car would the new sedan be? What were the dimensions, the target group? How much of it would be exported? “Before we received approval for the project, endless meetings were held on the weekends at the Tofaş headquarters in Istanbul. Along with

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the CEO, CFO, and all directors, we were aiming to ameliorate all aspects of the project. The features, the industrial expenses, and the commercial estimate… It was an arduous process for all the participants, but finally we had a team! The test-drive in Turkey, discussions over performance, brainstorming on how to increase the dynamics and comfort of the car… All of these were made possible thanks to the people that brought energy, passion, and competence to a project that held great meaning for Tofaş.” This period that then-R&D director Filippo Sesia excitedly relates was finally completed in 2013. The feasibility of the sedan developed with a focus on the Turkish market was approved. The product development process began as of this point, followed by exercises in style. With 1 billion U.S. Dollars in investments, 250 suppliers, 2.5 million hours of engineering work, and 2 million kilometers of test-driving, Tofaş had a significant role in both the conceptual design and development

Above: Fiat Egea Hatchback. Below: Fiat Egea Station Wagon. Right page: details of the sedan.

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stages of the Egea project. In explaining why the Egea constituted a turning point for Tofaş, Filippo Sesia recalls the contributions they had taken most pride in as Tofaş R&D during the development stage: We needed a new design to update the features and performance. Beyond that, Tofaş had attained the chance to design a passenger car from scratch for the Turkish market. Prior to Egea, all passenger cars were either imported or were based on the EU models. Moreover, Tofaş had also undertaken the lead a large part of the project with Egea. The greatest contribution Tofaş R&D made to the development of Egea was that the entire upper body and part of the lower body had been engineered

from the conceptual stage. What’s more, we designed the entire interior, including the front panel, which is the most complex part of the car. We constantly worked with concurrent engineering principles: First, we completed the concept stage with the Fiat Style Center in Italy, after that, the feasibility study with a plastic molding company, and finally in the industrialization of the part with first-rate suppliers in Turkey.

The high level of performance we reached is the one we are most proud of. Egea was created by recognizing the need for a new domestic passenger car in our society. Initiated after the approval of FCA, the project soon gave rise to another question: Italy needed hatchback and station wagon models rather than a sedan. So why is not turn Egea into a family? When the car’s style, character and cost performance began to emerge, it was brought to the agenda that the Egea’s siblings could be

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With an investment of $One billion, 250 suppliers, 2.5 million hours of engineering work, and 2 million kilometers of testdriving, Tofaş had assumed a significant role in both the conceptual design and the development stages of the Egea project.

presented for European market without delay. The feasibility studies were carried out again and the family was expanded. This brought along another “first” experience; for the first time a hatchback and a station wagon model were based on a sedan. Sedan models were usually designed from the very beginning by adding a trunk to hatchback vehicles. This time the opposite was done. These were two benefits; one was the hatchback attained a large, dynamic, spacious and broad sense of style as it was placed on the sedan platform. The second was that the sedan also got rid of the limitations created by developing it over a hatchback, and had the comfort of sizing it from scratch. On February 13, 2015, a supplier information meeting was held on the new sedan project. At that meeting, CEO Cengiz Eroldu stated that the R & D investments that have been in brought to life over the years had provided a significant advantage in the model development process, and it was precisely because of that that sedans, hatchbacks and station wagon models were able to continue, and that there was potential to develop new vehicles on the platform. Tofaş was hosting a global collaboration with this project. Egea’s name was also a warm and familiar one that everyone embraced upon hearing it. It had a ring that made it “ours” and sounded pleasant. There was a melody that was both “us” and nice to the ears. “It was almost an Ode to the Aegean Sea that serves as a symbolic bridge between the East and the West.” Okan Baş tells us that Egea the naming of Egea was just as exciting as the rest of the steps along the way. We were trying to find a name for the new car... We wanted to get on Bursa or Turkey to be part of it. Also, both the Turkish and the Italian

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had to like it… Hundreds of names were tossed around; we would bring in the proposals, like them, try to get them registered, only to see they were already taken! It was so difficult! Finally, we settled on the name Egea for the new model, but the patent bureau said there were two problems with this name as well; the same name was used with a spare parts company in Izmir and a factory in Aksaray, Konya. We had almost reached the stage of releasing the name, but we were having trouble registering it. Finally, the letter “A” was added to the beginning of Egea, and the it was registered without any trouble. Meanwhile, we first reached an agreement with the firm in İzmir and bought his rights to the name. Then, through the support of our dealer Orhan Ağaçlı in Aksaray, the other issue was resolved and the Egea name was used without the A as the first letter.

The use of the name “Tipo” for Egea’s European version is another point worthy of note. Tipo had been a very important model in the past years; it was a highly popular and widely sold model in its time. Fiat’s reuse of this name for the Egea family was an indication of how the company supported the model and had faith in it. As preparations was underway for Egea, something unexpected happened: On May 15th, a workers’ resistance was initiated at the Renault in Bursa. Production was halted at the factory in which nearly five thousand people worked at the time. Claiming they weren’t given a raise and their rights were not protected, 1500 workers refused to go to work and held a demonstration in the garden of the factory. Affecting the leading automotive companies, factories, and suppliers of Turkey, this

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wave of strike and resistance spread to Tofaş as well. Some employees joined the resistance. Meanwhile, some of the engineers briefly went down to the assembly lines to work. Following a mutual agreement, the resistance ended on May 25th. It was a hard and problematic period. Yet, Autoshow 2015, which coincided with this period, was highly critical for Tofaş, as the preview of Egea was to be held at the expo. Known by its code name 356, the car was finally being introduced as Fiat Egea to the public. In CEO Cengiz Eroldu’s words, Egea was a project that “Crowned the nearly half-a-century partnership between Koç Group and FCA. The supply industry was taking part in the thrill as well. Okan Baş recalls that in order for Egea to succeed as imagined, the ecosystem the supply industry created with Tofaş worked seamlessly.

The R&D team.

In the course of the Egea project, everyone would be working at the factory on Saturdays we well, in order for the work to proceed without a hitch. At one point, three or four issues were causing trouble. Small teams were put together extremely rapidly to overcome these issues. Before, when a problem would arise, it would take too long to have people come over

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from the supply industry. Sometimes it would take them 10 to 15 days to work on a part and bring it back. During the Egea project, they would sometimes be called on the day; the specialists would come, the design would be changed, and the new product would arrive in a matter of days. The issues were resolved at lightning speed. It was a great thrill because everyone had a single, common goal: to manufacture the Egea as desired. This was made possible through Tofaş’ deep-rooted experience in the field.

Following the preview of Egea in May, mass production phase was closing in. A few months had passed and as they neared the stage of production approval, all Tofaş employees from the CEO to the youngest field worker were in a state of increasing anticipation. They were impatiently waiting for the day to reap what they had so diligently sown. Cengiz Eroldu reflects on the tension: It must have been July of 2015. We were at the end of the Egea project and it was the week of production approval. Completing the Egea project without a flaw had become a paranoia for all of us involved. We had no tolerance for even the slightest mishap. The last Sunday before production approval, we all woke up early and went to the factory to be with Okan Bey and the team. Although it was Sunday, we met with nearly fifty engineers and reviewed the final preparations. The same day, there was a power shortage that had been planned months in advance by DOSAB (Demirtaş Organized Industrial Zone). We had to interrupt the tests. The next day, I found out that a number of our colleagues waited until midnight for the power to come back on, not to lose time. As the CEO of the company, I did not have the right to ask for such selflessness. However, I was deeply impressed to see they had done it of their own volition. I witnessed once again what perseverance and the desire to succeed meant to Tofaş employees. It was impossible to repay this dedication. Out biggest reward was putting on the market a highly successful product. This is how we wrote our own success story.

At the beginning of production, the R&D people, who constantly met with all the industrial directors to talk about daily problems were one of the teams waiting for the happy ending with enthusiasm. Sesia tells the details of the moment the FCA approval: The performance indicators of the project were good; the factory was ready. We believed that we had created a success story with self-confidence. On the planned day, the remote connection room in Italy, the different areas of Tofaş R&D and the factory were ready to join the long-distance meeting. More than 100 people were connected. Our enthusiasm and joy nearly exploded when we received approval! I remember the words of the Fiat administration: “We have never seen a team of such different backgrounds work so harmoniously” and “One of the best project practices we have ever

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seen”. We were happy and excited, as we had accomplished our mission! FCA senior management visited Tofaş immediately after the production approval. The CEO, EMEA’s COO, Program Director and Production Director met with Koç Holding’s Executive Committee. They test-drove the vehicle, talked about performance expectations and the economy of the project. We received sincere congratulations!

Çağlar Şahin could also never forget the moment of approval: As the culmination of a mutual effort that lasted years, this project had reached the point of approval after overcoming all challenges and problems. It is hard for me to out into words the thrill I felt upon when I heard that approval had been granted during the meeting with the upper management. Every incident from the beginning of the project until production approval flashed before my eyes that instant. From the cost-lowering work we repeatedly did to get approval on project feasibility to unexpected problems we encountered during verification tests, from crises emerging from the deviation of performance indicators we have observed at every phase of the project, to nights we worked until the first hours of the morning to prepare for project review meetings, everything is fresh in my mind like it was yesterday. This project has once again shown us that as Tofaş, there is nothing we cannot achieve when we come together for a single common goal.

FCA’s CEO Sergio Marchionne gave the “final production approval” of the Fiat Egea with Chair of Koç Holding and Tofaş Board Mustafa V. Koç at the factory on September 14th. Marchionne, who did the first testdrive with Koç, enjoyed the ride very much and congratulated the Tofaş employees with compliments. “The new compact sedan is the result of the advanced skills Tofaş has in product development and manufacturing. Well done!” Egea’s production began with a great celebration. Chair of Koç Holding and Tofaş Board Mustafa V. Koç was the person to sit at the wheel and drive the car off the assembly line along with Tofaş employees… At the ceremony held on September 28th, Koç said, “As the Koç Group, we invest in technology and innovation to increase our added value to our country and advance our competitive strengths. The Egea project is the most powerful example of our group’s stance. Egea’s production in Turkey is a direct consequence of the investment Tofaş has made for years both in R&D and in world-class production and the skills it has attained.” According to Mustafa V. Koç, Egea was a “smart” project: It is smart because it was developed through a series of studies as a vehicle that meets the expectations of Turkey and can be accessed by large masses. In addition to the domestic market, it also appeals to customers worldwide. It will be exported to 40 countries in Europe, the Middle East, and North Africa. In addition to the sedan, two more vehicles –a station wagon and a hatchback, a large portion of which we

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will export– will be manufactured on the same platform. This is another factor that makes our project smart. I believe that as the first passenger car of this scope to be launched to the worlds from Turkey, Egea will be very successful in every sense.”

The final production approval of Fiat Egea: Next to a black Egea sedan are FCA’s CEO Sergio Marchionne and Chair of the Tofaş Board Mustafa V. Koç.

During the test-drives, Egea toured around the world 200 times… Now, it was being transferred to the skillful and experienced hands of Tofaş employees. CEO Cengiz Eroldu stated that a production team of five thousand was now carrying the flag: “We will reach the designated standards of quality and production volume with the diligence, attention, and hard work of our teams. The most important target of the Egea team is to increase the loyalty and love our customers have for the brand.” As one of Tofaş’ milestones, Fiat Egea was introduced to dealers at a convention organized in Istanbul on October 7th. The launch gala,

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on the other hand, was hosted by Koç Holding Honorary President of the Board Rahmi M. Koç at Rahmi M. Koç Museum. In his speech during the ceremony, FCA EMEA Region Business Development President Silvia Vernetti extended FCA’s congratulations and thanks to Tofaş: I am thrilled to be back in Turkey with the Koç family, Tofaş team, and dealers on such an important occasion for the future of Tofaş and FCA. I would like to extend the greetings of EMEA COO Alfredo Altavilla, who unfortunately couldn’t be with us today on this very important meeting organized by Tofaş for the launch of a new product. I would like to tell you briefly about the world of FCA. FCA is strengthening its position in the automotive sector with each passing day and we are setting much higher targets for the near future in Europe and across the globe. With all our brands, we are focusing on products that meet the market’s demand and as we provide high-quality customer satisfaction, we also strive to benefit from the potential of our brand value. In the EMEA region, the Fiat brand is of vital value for our future and the Egea family is an indispensable part of this future. Holding a key place within the FCA from the onset, Tofaş has succeeded in increasing its strength and significance with each passing day. With the Egea project, Tofaş has begun to play even a more important role in future plans of FCA and the Fiat brand in particular in terms of developing products in Europe and maintaining its leading position in Turkey. From the first day onwards, this project was managed in a perfect manner. From the development stage to production, Tofaş’ contribution to the project was at a magnificent level. We regard Egea as a product that perfectly complemented the successful collaboration between FCA and Koç and as a direct consequence of Tofaş’ drive to succeed. We are very proud of the outcome!

Following this intensive launch program, Egea Sedan was made available at all the Fiat showrooms across Turkey as of October 15th. A SUCCESS STORY OF TE AM SPIRIT

Designed at the FCA style center in Italy and developed with the Tofaş R&D, one of FCA’s two leading product development centers in Europe, Egea had come to life with a team of more than two thousand people working on the project. For the Tofaş team, it was an unforgettable experience. In order to immortalize it, the R&D unit rolled up its sleeves and put together a photograph album. It was a perfect way of commemorating the unforgettable thrill of celebrating that team spirit and creating a “first” together. As the team’s director, Filippo Sesia cannot forget that excitement. We wanted to congratulate the team that designed and managed the Egea project and looked for a new, commemorative, and emotional way to do

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it. More importantly, we did not want to leave anyone our because the team members deserved and praiseworthy recognition! We met with our employee Nurkan Kahraman, a fine portrait photographer and thought of doing a photograph book. Having our engineers pose with the designed parts was as exciting as photographing a family with their newborn! You can see the excitement and pride in the eyes of the engineers’ portraits!

The EgeAR-Ge (EgeR&D) book Filippo Sesia mentions was the project of lighting engineer Nurkan Kahraman and was concretized when he brought his work and passion for photography together. The book and exhibition born out of that spirit through the support of the Corporate Communications Department not only provided a different perspective on Egea’s R&D process, but also immortalized the team’s enthusiasm about the project. Nurkan Kahraman recalls: The project was born with the name “My part, My Car.” We thought that each engineer could pose with the part s/he designed or managed. However, as there were many departments within R&D and quite a sizeable team, we had to set some limits. We photographed the design specialists with the parts created and used the portraits of the others on certain pages. The text was put together from the words and notes of all the colleagues working on the project. The objective was to demonstrate the local input and to reveal the team and the feeling behind the car. By putting R&D in the foreground, we were able to bring to light the kitchen and we have not encountered a similar work of this kind in the world. The English version was shared with other Fiat factories across the globe. The Egea team was amazing. They stayed in Italy for 6 to 9 months and embraced the project as their own baby. There was that thrill of Turkish engineering in the entire process because there was no precedent of involvement and sense of ownership in any other project. There was a prevailing sense of unity, camaraderie, and desire to do better. When the first “teaser” photograph was released, the entire team read the social media comments for hours. When the car received positive feedback at the expo, we all felt proud and honored to have been a part of the project.

There were years between the birth of the idea for a new car and the day Egea’s ignition was first turned at the factory. Çağlar Şahin compares the slow emergence of the car to the growth of a child. He feels that the meaning of the poses the individuals gave with the parts they produced must be conceived with the entire process in mind: Those people did all that. It is such a great pleasure to see how all these parts came together to make a moving car. It is extremely satisfactory to see this automobile come to life after all that hard work. When people like and admire what you did, you forget about the exhaustion. The difference between this project and its precedents –though future ones

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will possibly be better– is that the product is not merely approved, but has been accepted by all performance indicators and reached its target.

Current Tofaş R&D director Vincenzo Cusolito’s comments on his faith in the spirit of teamwork reveals how the Egea project lent a unique and unprecedented experience to Tofaş teams: After the Tipo program, Tofaş looks to the future with more confidence, for the infrastructure is very strong: The factory received the WCM Gold award. The R&D center has its speed of increasing its know-how and the engineers are quite driven to improve their skills. The know-how of our workers and managers has improved in proportion with the expansion of a product range. The Tipo program has us our power of meeting the demands of our business partners and customers. This team can focus on untouched territory on new products in the future, add new technologies, and focus on setting aside the obsolete functions. By carrying the power of perfect collaboration between departments to new projects, this team can become not only a local, but perhaps a regional player in the automotive industry. The Egea project was recognized as an unforgettable experience for the R&D engineers of Tofaş. Working as a lighting engineer at Tofaş at the time, Nurkan Kahraman used his photography skills to put together an EgeAr-Ge (Egea R&D) booklet with his colleagues, immortalizing the team’s spirit and enthusiasm.

THE EGE A PROJEC T: A MASTERPIECE

CEO of Fiat Chrysler Automobiles and former Tofaş CEO Alfredo Altavilla was quite intent on the Egea project and expressed his interest in it as follows: The Egea family or Tipo as it is known in Europe, or Dodge Neon as it is known in the Middle East is a magnificent success story for Tofaş and FCA… We trusted, from the beginning, that Tofaş had the expertise to complete the project and could deliver a competitive and high-quality vehicle that would comply with our investment and production cost target. However, from the onset, the commercial performance of the vehicle went far beyond our expectations from the European markets.

Having worked on every project as of Tempra since started working at Tofaş in 1985 and controlled every phase on the industrial side of production, Okan Baş was the brand director of the Egea project. He evaluates the project as follows: All the projects added a different value to Tofaş. Finally, Egea was, as they say, a masterpiece. It was an important project in terms of opening new doors for Tofaş. I think that Egea’s birth was predominantly an accomplishment of Tofaş management. After this point, Tofaş can move towards new products in new markets; this cycle of production will continue. Egea may end, but another will

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start. It is quite experienced in that respect. However, it has a long way to go in manufacturing new products in new markets.

In the final analysis Egea assumed its placed in the automotive sector as a series that carried Tofaş’ bran perception in Turkey much further ahead than where it was. Cengiz Eroldu evaluates this prestigious position as follows: When we began creating Egea, we also began thinking of how to meet the customer needs and worked really hard to get to that target. We studied markets in Turkey and in the world. We used our engineering know-how and shills in the most effective way to have our product meet customer demands. All of this culminated in the birth of a fine automobile. Users in both Turkey and abroad, our shareholders, and partners saw that we were able to keep our promises. As a fine car delivering what it promised, Egea opened a place for itself with this positive perception in society. We pulled up the success level reached with Doblò and Fiorino. The transparency of our technical and organizational shills altered Tofaş’ perception in FCA and the rest of the automotive world. You can make more money from time to time or buy market share by running the risk of losing some money. Or, you can try to ameliorate public perception of the company through campaigns. None of this; however, can replace the rightfully earned prestige in the eyes of society. For, people can really distinguish what is real and sincere and what is forged.

Fiat Egea is exported to many countries. It is marketed in Europe as Tipo.

The path that led from Albea to Linea and eventually to Egea brought Tofaş its masterpiece and allowed it to enter the production portfolio of FCA. With the Egea project Tofaş seriously demonstrated the link between concept, product development, and production. According to Koç Holding Automotive Group President Cenk Çimen, the project reaped the advantage of having been planned correctly from the onset.: All of Tofaş’ projects were intelligently planned and could foresee the gaps in the market. This is how the Egea product family was planned. We manufactured a hatchback, then a station wagon on the sedan platform. As we used many common parts in doing that, we gained important advantages both in investment and production costs. Turkey needed sedans, whereas Europe needed hatchbacks and station wagons. We met these needs with the tri-platforms within the platform. What we actually did was a good analysis of customer expectation and need and to put into operation products that would meet this need. This is why Egea succeeded and I hope it will continue the same way.

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JANUARY 21 , 2016… AN IMPOSSIBLE FAREWELL …

Tofaş entered 2016 with a glorious year inscribed in gold letters behind it. Fiat Egea sedan’s success had spread everywhere even before it was released. Orders were coming in one after the other before it was out for sale. Exports began earlier than planned, in November of 2015, and by December, the car was presented to the Italian market. Although the sedan market was narrow in Europe, an extraordinary demand had poured in. Everything was going perfectly for Tofaş and 2016 began with an air of joy. However, on January 21st, the entire company and the entire country was shaken by inconceivably sad news; The chairman of Koç Holding and the Tofaş Board, Mustafa V. Koç had passed away. This painful, untimely death devastated not only the Koç family and the Tofaş teams, but everyone. The loss created by a successful and visionary leader at the most productive stage in his life greatly had a profound impact on everyone. Mustafa V. Koç’s relationship with Tofaş had begun at an early age. Upon completing his B.A. in business administration at George Washington University, he began working at Tofaş as an advisor. Later, he worked with Tofaş Oto in sales with İnan Kıraç until 1986. İnan Kıraç believed that Koç had drawn inspiration from his father Vehbi Koç. One of Mustafa’s most important assets was his quick decision-making. During that time, some things had taught him loud and clear; some other things, he learned from me. His grandfather was a great role model; when the late Vehbi Koç visited a town, the first person he would visit would be the Mayor or the Governor. If there were a chamber of commerce, he would visit the president. What he would talk about with dealers was not company gossip, but the troubles of that town. He would learn what was missing and end with that. He would correspond with whomever he had been touch with. Mustafa followed in his wake.

He moved on to Koç Holding in 992. He was elected the chairman of the Board during the 35th Ordinary General Assembly focused on the 2002 activities of Tofaş. He proudly watched the rise of Tofaş particularly as of 2010 and supported every one of its projects; he believed in his colleagues and always encouraged them. Tofaş had made a decision to invest in a new automobile, namely Egea, it would start manufacturing as of the second half of 2015. With the new investment of 520 million U.S. Dollars, 580 thousand vehicles were to be manufactured between 2015 and 2023, one third of which would be exported. During his speech at the November 2014 ceremony marking the beginning of the production of the Doblò America model developed and produced at Tofaş, Mustafa V. Koç shared the excitement and pride he felt about the recent investments as follows: “Tofaş is developing and exporting cars for America, the cradle of the automotive industry and the

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lead player of the sector. I believe that the New Doblò, which has brought us together here today, is an important indication of the level of success we have reached with all our employees in the automotive sector.” Along with his family, friends, and acquaintances, the employees shared this painful loss; they sent Mustafa V. Koç off with the words, “farewell blue-eyed, good-humored boss.” In his 20 year-long career at Tofaş, Cengiz Eroldu had the opportunity to work closely with Mustafa V. Koç. As our Chair of the Board, the late Mustafa Koç held the economic and social welfare of his country above all else; he was a visionary leader that could read the changing world extremely well. We suffered and extremely valuable loss not only for the Koç Group, but for Turkey and the global business world as well. Mustafa Bey believed and lived by the idea that companies were not only about financial output, but made their way into people’s hearts with the contributions they made to and the values they created in society, the environment, and in people’s lives. He courageously brought to life new business models for our company to renew itself. He believed in the sustainability of long-term solutions. He inspired us and Koç Group leaders to have accurate visions for the world, our country, and our job and to always think long-term. He never gave up on reminding us that we are living in a world where those who can keep up with change, stay open to innovation and criticism, and quickly learn from their mistakes are the winners. He encouraged us all not to settle for less. He advised us to constantly help grow our employees, dealers, suppliers, business partners, and even our competitors when necessary. Tofaş was the place in which Mustafa Bey also made many of his dreams come true. He has a very special place in our company… Having begun his career at Tofaş, the hard work he put into Tofaş and the trust and sincerity with which he approached all of us is extremely valuable to us. We will continue to carry Tofaş into the future on a global platform in a manner that the late Mustafa Koç would have been proud of us.

From executives that worked with him at Koç Holding and Tofaş to Italian partners, from supply industries to dealers, everyone grieved his death. As one of Tofaş’ first general managers and a current board member, Temel Atay remembers him with great sorrow: Dear and beloved Mustafa Koç held the position of Chair of the Tofaş Board for many years, which was a privilege that many other Koç Group companies did not have. Throughout his position as Chair, he closely followed the company’s progress, personally joined meetings and events, and extended his support and motivation both to upper management

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and personnel, which has greatly contributed to Tofaş’ rise in the recent years. On the other hand, his close and sincere ties with FCA President John Elkann, as well FCA’s CEO and Vice Chair of the Tofaş Board Sergio Marchionne has helped towards the positive growth and continuation of our collaboration with our partner. I cherish his memory with respect.

The first thing former automotive group president and former CEO of Koç Holding Turgay Durak remembers about Mustafa Koç is his sincerity. “His sincere embrace of Tofaş employees as a boss, as well as John Elkann of the Agnelli family and CEO Marchionne, and the completion of the Doblò, MiniCargo and Egea agreements are the first things that spring to my mind. Morever, the weight the Koç family put on the styling of the Egea, Rahmi Bey and Musafa Bey’s several visits to Torino to add the finishing touches to roof radii at the design studio, their contributions to the modern and simple lines of the dashboard…” “We have a very strong partnership with Koç Holding. We are constantly discussing new investments. We frequently meet with Mustafa Koç to discuss almost every issue,” said John Elkann, a third generation Agnelli family member, who had become the chairman of the Fiat Board in 2010. He was greatly affected by this loss. Mustafa Koç’s unexpected passing was quite a tragedy for me and my entire family. In time, we had established a true friendship through the times we spent we spent together with our families. He was one of the most sensitive and open-minded people I have ever met. In terms of business, he was a visionary that helped overcome many challenging projects that mattered to our firms and to Turkey. It was a great honor for me to have worked with him. I miss him both as a businessman and as my friend.

It is impossible for any member of the Tofaş team to forget the photograph of Mustafa V. Koç and FCA’s CEO Sergio Marchionne, with who he had a great relationship, taken as they were signing the Egea project. It is a memory of both their professional relationship and a testimony of their friendship… Just as Marchionne stated when he congratulated the 90th anniversary of the Koç Group,5: “The family was very lucky to have a conscientious, highly gifted, and intelligent leader such as Mustafa Koç. I always regarded Mustafa as a friend. We all miss him deeply.” Yet, no one can conjure up the warm and sincere businessman picture of Mustafa V. Koç better and more plainly than his father Rahmi M. Koç:

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When Vehbi Koç was the Chair of the Otosan Board of Directors, I had been put in charge of Tofaş. When Vehbi Bey left, I moved to OTosan, and Mustafa took the wheel of Tofaş. Mustafa could easily make friends with everyone, from a stranger on the street, to the highest executives. Indeed, he became close friends with John Elkann of the Fiat Family and Sergio Marchionne. So much so that he and John would socialize outside of work as well. Everyone knows about Mustafa’s passion for and talent for sports. After his passing, the executive management of Tofaş named the sports complex they built after him. Thus, Mustafa was forever identified with Tofaş. Now, Ömer Koç is in charge of Tofaş and Ali Koç is in charge of Ford Otosan… Both the Agnelli and Ford Families put great emphasis on that. They would very much want someone from the Koç Family to follow the business on the Board and, as the saying goes, to shoulder the responsibility.

T WO AWARDS FROM AUTOBEST

As soon as the Fiat Egea emerged, it began receiving awards. First it was selected the best automobile of the year in Europe. Exported from Bursa to the rest of the world, Fiat Egea was the recipient of Autobest 2106, which named the best in Europe and chose the best vehicle of the year. Egea was extended this award based on its many outstanding features, including price-value balance, quality, comfort, and functionality. In fact, there were two awards in question: Koç Holding Automotive Group received the “Companybest 2015” award; for the first time Autobest, the award was extended not to an automotive brand, but an automotive group. Established in 2001 as an independent entity, representing 91% of Europe’s population, and determining the best price-quality automobiles of Europe by a jury comprised of 26 automotive journalists from 26 different countries, Autobest had chosen to extend not one, but two awards to Tofaş, which caused great excitement among its teams. The award ceremony was held in Milan on February 11, 2016. Koç Holding Automotive Group President Cenk Çimen began his acceptance speech by commemorating the late Mustafa V Koç: At a time in which we have made the largest volume of inward and outward investments in the history of our company, we would like to dedicate these awards, which epitomize our recent accomplishments, to the memory of Mustafa Bey. As we cherish his memory, I would like to emphasize that we will work with greater courage for greater success with the inspiration we draw from his visionary steps. As the pioneer of the automotive industry in Turkey and the leading automotive group for more than 60 years, we take pride in our superior production

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quality and service network, as well as our leadership in exports. We are honored that Fiat Egea, the masterpiece of the FCA-Tofaş collaboration and the most recent fruit of our collaboration with the greatest brands in the world, has won the “Best Automobile” award and that our automotive group has been extended the Companybest Award.

At the end of this special evening, FCA’s CEO Alfredo Altavilla delivered a thankyou speech: Established in 1968, our partnership with Tofaş is not only the longest partnership of the in the automotive industry, but is also an indication of stability, success, and trust. As FCA, much like other manufacturers, we have been sensitive to the realities of the market and reshaped our strategies. In some instances, we guided important initiatives in another direction and postponed others. We continue to do what’s necessary in order to fully meet the demands of the market. At this point, the Egea/Tipo Family gains importance. It constitutes the main part of our strategy at EMEA. I would like to thank the Fiat and Tofaş teams, and the Bursa, factory, one of the best automobile plants in the world that has zealously continued its work, for their superior performance.

A CRITICAL INVESTMENT FOR BASKETBALL AND BURSA

From a gym built at the factory with whatever was available to a sports hall created with a 10 million Lira investment… Considering how Tofaş’ involvement in sports began at such difficult times and still culminated in a string of accomplishments, it would have been difficult to find an investment of this size odd for a company that had become a global center of production and R&D. The groundbreaking ceremony of the new sports complex Tofaş Sports Club would build within the factory property was held on February 12th, the day production began 44 years ago. The new project was a sports complex and comprised of four main sections. It included three basketball courts sprawled across an area of 2600 square meters a 700 square-meter area of health center for the athletes, a foyer of 260 square meters, dressing rooms, office areas, sauna, and meeting rooms. Moreover, the new complex was handicapable-friendly; this way, investments in young athletes would be taken a step further. RECORD-BRE AKING FIGURES OF 2016

The figures of the New Year please everyone; the daily production capacity of the company had increased, reaching 1488 cars in the first six months. 25% of the entire automobile production belonged to Tofaş, meaning one out of every four cars was manufactured at Tofaş. Exports

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figures had risen as well; in the first half of 2016, export share reached 254%. Again, Tofaş manufactured one out of every four exported cars. Much like production, this was a record-breaking result in exports as well. The foreign trade surplus had reached 1 billion U.S. Dollars. During the same period, the factory transitioned to a triple-shift with 3500 new employees. 93% of the cars sold on the domestic market were locally produced. Considering the first six months, the market was much ahead of 2015. By the end of the year, 2016 was recorded as “unforgettable,” as all figures were at record-breaking level. Annual production: 383,495 … Daily production: 1556 … Yearly exports: 279,537… All these figures reflected credit both on Tofaş and on Turkey. SUSTAINABILIT Y REPORT IN THE AUTOMOTIVE INDUSTRY

Having brought its endeavors to a level of sustainability with all its investments and published a sustainability report for the first time among automotive manufacturers in Turkey, was granted an award by the Academy of Sustainability in 2016: 5Rs of Sustainable Waste Management project received an award in the Waste Management category. CEO Cengiz Eroldu offers the following insight on Tofaş’ sustainability principles: The sustainability of companies depends on how well they see the connection between reputation, market share, and profitability. A company of good repute is, of course, in a more favorable position to be able to maintain its long-term profitability. Profitability is seen as a result of the value we create. Although it is more appropriate to address the market share depending on the conditions of the times, companies responding to social needs, right products and services can respond to all of them.

NEW AND DISCONTINUED FIATS

Fiat Egea’s sedan model continued to transcend borders in 2016; As of July, under the Dodge brand name, Neon was launched in the Mexican market. After RAM Promaster City, the model was the second car to be sent to America. In Mexico, only the gasoline version of the vehicle would be sold in line with the traditional preference of the market. So, the number of brands on the assembly line in Tofaş was increased to seven. Tofaş employees also took off the assembly line the latest classic Doblò, which was discontinued in 2016; a special ceremony was held at the factory for. Doblò, a vehicle that created its own segment, revolutionized commercial vehicles, and constituted an important milestone for Tofaş; a total of 1,003,773 vehicles had been manufactured.

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In Cengiz Eroldu’s words, its statue needed to be erected! Or the words of Ümit Dursun Yağlıdere from the assembly unit, “Doblò not only carries cargo, but its carries worries and concerns as well…” Both the employees and the managers said “goodbye” to the legend. Meanwhile, another ceremony was organized at Tofaş for the MiniCargo project to release the 1 millionth vehicle from the band; it was a Fiat Fiorino. Brought to life for the first time in the Turkish automotive industry with the development and production of multiple brands, the success of having reached this number was celebrated together. THE 2016 ADVENTURE OF THE FIAT EGE A FAMILY

Egea’s Fiat sedan had become the most widely sold model in Turkey. As planned, 2016 was the year in which Fiat Egea started production of

both the hatchback and station wagon models. On the other hand, the investment of the second body line of the Egea was brought to the agenda. Let us now look at the details of this project from the beginning: Fiat Egea’s hatchback and station wagon models were debuted for the first time at the 86th Geneva International Motor Show. The whole family, along with the sedan, was on display for automobile enthusiasts on March 3rd at one of the biggest automobile expos in the world. It was one of the most crowded booths at the expo and there was a great interest. Rahmi M. Koç was thrilled to see all the Egea vehicles side by side at the Fiat stand during the launch:

The Fiat Egeas manufactured for Mexico are marketed under the name Dodge Neon.

I have been following the Egea project since the beginning. In the early stages of the exterior design of the vehicle, we had a number of meetings at the Style Center of FCA in Italy, including discussions with the chief

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designer. I like the final stage the designs have reached. The comfort and equipment features are well thought out and meet all needs. Before the launch, I personally reviewed and tested the new models of the Egea family. The engines of the vehicles are also very satisfactory in terms of performance and fuel consumption. In designing the product, customer expectations have been well studied and the equipment and engine options are carefully selected.

“I once again felt proud of our employees,” Rahmi M. Koç had said. The Fiat Egeas were the pride of the Tofaş teams, as well. After all, 70 percent of the vehicles they produced would be exported. By 2023, 1.2 million vehicle-production and 10 billion U.S. Dollar exports were targeted. As the second member of the family, Fiat Egea Hatchback, was ready to hit the road on April 12th. While it was being taken off from the assembly line for the first time at the factory, Chair of the Koç Holding

Above: Fiat Egea Station Wagon; Below: Fiat Egea Hatchback model.

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and Tofaş Boards Ömer M. Koç and Tofaş employees were present along with the Minister of Science, Industry and Technology Fikri Işık. For Ömer M. Koç, the ceremony held a different meaning, as he was together with the Tofaş teams for the first time: Today has a distinct meaning for me; as I am here with you at Tofaş for the very first time and enjoy speaking to you for the first time as well. As one of the locomotive companies of the Koç Group, Tofaş has been experiencing its strongest period by making historic investments in recent years. Tofaş has renewed its entire product range with an investment over 1.5 billion dollars made in recent years. The new Doblò, Doblò America and the renewed Fiorino models were put into production. It has become FCA’s largest production center in Europe. As the only automotive company in Turkey to produce both automobiles and commercial vehicles with an advanced R & D center, it has assumed a distinct place compared to other manufacturers in Turkey. Currently, it is the only automotive company that manufactures vehicles for seven different brands. The most important investment in Tofaş in recent periods was, naturally, the Egea project. In October of last year, we celebrated the start of the production of the sedan model. Today, we are together for the ceremony of the beginning of for the hatchback model, the second product of the project. I would like to take this opprtunity to commemorate my brother Mustafa V. Koç who passed away most unexpectedly. He regarded Egea, which he greatly valued, as a family that would strengthen both our internal market position and create significant export potential. Having exceeded expectations, the success of the sedan model on the European markets and the start of exports to the American continent in the upcoming months, prove how accurate the investment decision was. I believe that with Egea hatchback, the production of which begins today, this success will be carried even further. I would like to express my sincere gratitude to all the engineers and workers who have contributed to the development and production of the Egea project. The model we begin manufacturing today will bring added value to our country and the Turkish automotive industry with the employment opportunities and foreign trade surplus it will generate. I hope that our new model will be beneficial to our country, our Group, Fiat Chrysler and Tofaş.

Ready to drive off, the Egea hatchback was introduced to dealers at a special gala on May 11th. Arriving from different cities of Turkey, the dealers met at the headquarters of Tofaş. The evening of the gala took place at the Venetian Palace. Chair of the Board of Directors Ömer M. Koç was meeting the dealers for the first time: This special night, on which we celebrate the launch of the new hatchback model of the Egea family, holds a unique place for me. It

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brings me great joy to unite with our esteemed Fiat dealers and to address you here for the first time. Like all other members of our family, my dear brother Mustafa Koç gave great importance to these conventions. He regarded our dealers as part of our family. I would like to take this opportunity to cherish his memory in your presence with much love and longing.

During the evening, Ömer M. Koç also shared the importance of the Egea project, as well as his thoughts and expectations on where this project of international importance can be carried with the help of dealers: The Egea project is an important investment that will carry both Tofaş’ domestic market position and export potential at much higher levels. I have also driven the Egea hatchback and I enjoyed it very much. Much like the admiration and interest our sedan model has received, I expect the hatchback to reach a similar level of success. However, as you all know, in today’s challenging competitive environment, product qualities alone do not bring success. Moreover, consumer demand is increasing on a daily basis. On the other hand, a certain volume of sales needs to be achieved for the success of the project. Therefore, knowing the value of our product, we have to promote it by explaining its features very well. For this reason, we expect you to prepare your teams very well, especially during launch periods, and to transform your power into a great opportunity.

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Fiat Egea Hatchback was released from the belt in April of 2016. During the ceremony at the factory, Ömer M. Koç was present for the first time as the Chair of the Tofaş Board.

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As our dealers, you are in direct contact with the customers and represent the face of our brand. With your service quality, you carry the image of our brand and our customer satisfaction to much higher levels. We know very well that you work with enthusiasm and determination to achieve these goals. We regard this as an important competitive power. I am deeply convinced that Tofaş, together with our esteemed dealers, will further its accomplishments. I would like to thank you all individually for your dedicated efforts and the added value you have created. I would also like to extend my greetings and appreciation to your families. May the Fiat Egea hatchback be beneficial to our entire organization!

Dealer Council President Hüseyin Birinci’s speech that night was an important expression of confidence he had in the brand: I have said at our previous meetings that Egea is the guarantee of our near future. Egea has been very popular in all respects since the first time it appeared on the market with the sedan version. Now, with the hatchback, we take this popularity to a higher level. By the end of the year, when all the members of the family enter the market with both body and enginetransmission varieties, we will confidently be able to say, “Making cars is our business” as the Fiat brand. I would like you all to know that we are well aware of the power of Tofaş and our brand and are ready to be the leader in Turkey with the impetus the Egea has created.

The last member of the family was launched in October of 2016. The sale of the Fiat Egea station wagon began. Evidently, 2016 was the year of the Egea family. Following these developments, Tofaş manufactured its 5 millionth car—it was a Fiat Egea hatchback. The ceremony held for this momentous occasion was held at the factory on July 8, 2016. AROUND THE WORLD WITH EGE A SEDAN

The news of Egea were not limited to with this: In 2016, flashy red Fiat Egea sedan embarked upon a tour of the world in August to drive for 40,000 km in 80 days. Experienced auto journalist Okan Altan was on the driver’s seat. Extending from to Russia and Mexico to England and Greece, this interesting route would end up back at the doors of the factory and ending in Bursa, at the gate of the factory. Along with Okan Altan, photographer Savaş Yılmaz would also join the journey. After 22 countries, 400 hours of driving, and 41 thousand km of on the road, the journey was completed at Tofaş factory in Bursa. The Tofaş teams met the duo –and the red car they had manufacturedwith great enthusiasm and interest; the red Egea sedan seemed to have

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endured the challenging stages and roads. There had been no mechanical failures along the way. The mountains of Mexico were crossed at walking speed and the German highways were traversed at 190 km an hour. No changes had been made to the vehicle since its release from the assembly line and the first world tour of a mass-produced car had been successfully completed. The journey of the red Fiat Egea Sedan ended with a splendid welcome ceremony at the factory. Okan Altan was thrilled to have realized the dream of travelling around the world with a domestically manufactured car of standard equipment.

Automobile journalist Okan Altan set out on a world tour with photographer Savaş Yılmaz in a red Fiat Egea sedan in 2016 and drove 40 thousand kilometers in 80 days.

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As Fiat Egea was getting ready to be exported to the rest of the world, the idea to take Egea across the world emerged. Driving around the world with a car of standard equipment manufactured in Turkey was beyond my expectations. We have accomplished, an amazing, unprecedented task. We have shown Egea to the entire world, from the mountains of Mexico at walking speed, to the highways of Germany at full throttle.

“ TOFAŞ NEW GENER ATION” AND THE SUPER LE AGUE

Taking the necessary steps to transform Bursa into a real basketball city, Tofaş engaged in a very important initiative for children in 2016 with Tofaş New Generation, a long-term basketball infrastructure project in Turkey. The project was aimed at creating equal opportunity in children’s

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access to sports. Beyond sport training, the project was designed to implement a certain culture and perspective that would help them be successful in all areas of life. The target was to reach fifty thousand children in five years all across Turkey. Prospective professional athletes and coach candidates were to be selected from among the children to be included in the Tofaş New Generation project. Aimed at transforming Bursa into a basketball hub, the project was revealed at a press conference held on April 26th at the Tofaş Sports Hall in Nilüfer, Bursa. Having contributed to basketball in Turkey with outstanding athletes and accomplishments for 42 years, Tofaş had trained 3500 athletes under its roof so far. 95 of these athletes had played on the national team. Tofaş Sports Club has trained many stars and brought many trophies to Bursa. Then-Club President Okan Baş was convinced that the Tofaş New Generation project was very challenging: Today, we are carrying our commitment to basketball a step further by bringing to life a sustainable infrastructure model for the first time in Turkey. We have taken the first step of this project, which will offer equal opportunities of access to sports for young people interested in sports Turkey, right here at home, in Bursa.

Along with this project, the first sports library of Turkey was inaugurated. Brought to life to offer accessible and high-quality information that constitutes the basis of the education offered as part of the Tofaş New Generation project, Tofaş Sports Library hold a wide range of local and foreign works published on sports and history of sports, as well as sports-related disciplines such as nutrition, personal development, and psychology. The library was designed to admit all users and to contain more than 2000 publications in the first stage. Members of the Tofaş Photography Club developed a special project for Tofaş New Generation in April 2017; they organized photo shoots with young basketball players, who participated in the project that opened a

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new page in the lives of hundreds of children, and shared their stories alongside the photographs by transforming them into a book. Also serving as the President of Tofaş Sports Club, CEO Cengiz Eroldu, extended his thanks to project coordinator Kartal Önel, along with the administrative and technical staff, for their contributions to this impressive project and touched upon important points regarding the future: We brought to life the Tofaş New Generation project within a sustainable structure based on years worth of strategy. The objective of the New Generation Tofaş project is to reach all children and to implement sports culture in society through the transmission of complete and accurate information with the aim of contributing to the upbringing of healthy individuals. We aim to spread the project across Turkey within a short period of time with the support of our strong dealer network. We believe that the Tofaş New Generation in Turkey project will help train prospective professional athletes and valuable trainers in Turkey.

In summarizing how far this long-term project has come, Tofaş Sports Club General Manager Tolga Öngören emphasizes the principles behind the company’s approach to basketball approach and why it is valuable: Our club, which is also active in social responsibility projects, brought to life the Tofaşball / Fiatball project in partnership with TEGEV in 2000. Thousands of children were introduced to basketball as part of the project. The trainings and studies offered brought positive changes to the lives of the children. The Fiatball project ended in 2015 upon reaching its goal. As of 2016, a brand new social responsibility project was initiated under the name Tofaş New Generation. More than 1000 children are offered basketball training within the scope of the project, which adopts the principle of equal opportunity in basketball. In addition, effort is made to recruit prospective basketball coaches as part of the project. Since 2016, volleyball and basketball courses are offered by our club coaches free of charge to the children of our factory employees on the weekends.

Tofaş New Generation was initiated in 2016 with the idea of transforming Bursa into a city of basketball.

As part of its vision, Tofaş Sports Club is striving to train high-level athletes and coaches for Turkish basketball. Young athletes constitute the core of our basketball investment. Tofaş Sports Club’s vision in sports is not solely focused on sports results. The education of young athletes through sports lies at the heart of the project. Over the years, our club has trained top-notch basketball players as well as academically successful individuals. In line with our vision centered on people, we also emphasized the training of coaches to train high level players. As a result of our investments, our coaches have been serving the national teams of basketball as well as our club for years. Currently, we have more than 100 licensed players in our infrastructure organizations; there are more than 3500 Tofaş Basketball Schools players in Turkey.

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2016 was truly a year of championships… Tofaş’ basketball team became the champion of the Turkish Basketball League in the 2015-2016 season and managed to re-enter the Super League after one year. After the game, head coach Orhun Ene had stated that the championship was achieved after a difficult final game following a very well-played season. The celebration was held at the social facilities of the factory. SPORTS HALL NAMED AF TER MUSTAFA V. KOÇ

The inauguration of the sports hall, the construction which began on February 12, 2015 with an investment of 10 million, was held on June 9, 2016. This magnificent complex was named after Mustafa V. Koç. The facilities would not only serve Tofaş Club and Tofaş employees, but amateur athletes in Bursa as well. In his opening speech, Chair of the Tofaş Board Ömer M. Koç expressed his joy at seeing that the sportsloving side of his late brother Mustafa V. Koç would be immortalized at this complex. Our Group takes great pride in the fact that our club, which has always placed great emphasis on infrastructure work since its establishment, has transformed its know-how into an advantage for the training of young people all across Turkey. This facility will continue to be a school for prospective athletes and thousands of people who play sports or strive to engage themselves in the field of sports.

Next page and the following double pages: Named after Mustafa V. Koç and located within premises of the Tofaş factory, the large sports complex was inaugurated in 2016.

Everyone was particularly pleased that the inauguration of the new facility had coincided with the championship. Tofaş Sports Club President Okan Baş, reminded guests that the late Mustafa V. Koç had been very eager for the Club to win the championship:

A great supporter of sports and actively involved in a range of sports activities himself, Mustafa V. Koç had always been supportive of the renovation of our facility. It is, therefore, very meaningful to us that this facility carries his name. His motivating enthusiasm will always live in our minds and memories.

T WO EXHIBITIONS AT THE TOFAŞ MUSEUM OF CARS AND ANATOLIAN CARRIAGES IN BURSA

On November 11, 2015, an exhibition on Zeki Müren was launched in collaboration with Yapı Kredi Private Banking and Yapı Kredi Kültür Sanat Yayıncılık at the Tofaş Museum of Cars and Anatolian Carriages in Bursa. Bringing to fore the renowned singer once again with an exhibition

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organized in the city he was born, the exhibition was titled, İşte Benim Zeki Müren (That’s Me, Zeki Müren). Preserved in the archives of Türk Eğitim Vakfı and Türk Silahlı Kuvvetleri Mehmetçik Vakfı, nearly ten thousand photographs, costumes, poems and notes, archive images, and personal belongings of Zeki Müren were displayed in the exhibition. He had appeared before viewers with the lyrics in the songs about him: “Spreading emotions on songs, withstanding pain, entering suffering hearts…” The exhibition remained open until February 19, 2016. We hardly think that indispensable parts of our daily lives can become museum-worthy items and put on display years later. However, when these old and new items are brought together to constitute a collection, they offer us clues about the cultural structure of our society. Collecting is, therefore, is very important; their display and public sharing, on the other hand, is priceless, as they can establish ties between the past and the present of viewers. These seemingly ordinary items can be anything; such as hamam bowls, toys, or clocks… That is exactly why the exhibitions master architect Naim Arnas, who collects these objects, curates at the Tofaş Museum of Cars and Anatolian Carriages in Bursa are very precious; they are particularly important in terms of refreshing memory and allowing viewers to see the bigger picture from afar. Reflecting the same idea and presenting to viewers a collection of scales, weights, and measuring devices, the exhibition entitled, Kantarın Topuzu/The Poise of the Steelyard was very valuable. It was launched in the exhibition hall of the Museum on September 21, 2016 and had on display more than three thousand instruments from different periods. The pieces in the 35-year-old collection were extremely interesting as much for their functionality, as for reflecting the old technological features and ancient designs. TOFAŞ R&D CENTER AND THE SIZE OF COMPETITION TOWARDS THE 50 TH YE AR

Tofaş had been at the top of the list for two years in the European Commission’s list of R&D expenditures. Moreover, it had been selected as the most successful R&D Center of Turkey’s automotive sector for the second consecutive time. According to the R&D Center Performance Index of the 5th Private Sector R&D Center Summit organized by the Ministry of Science, Industry and Technology, Tofaş was once again won first place in the “Automotive Sector.” was again Tofaş according to. During the award ceremony, CEO Cengiz Eroldu stated that sustainable competition could only be achieved through R&D: We first began working on R&D to solve problems and access information. After that, it progressed very fast with new projects and continuous investments. The most valuable achievement of the last 48

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The area where the durability test of automobile doors are carried out at the TofaĹ&#x; R&D building.


years in Tofaş was the successful transformation of this accumulation in R&D into a global project. Sustainable competitiveness for the industry is only possible with R&D.

In discussing the 1990s towards the middle of our story in this book, we had explained how Tofaş’ R&D work had begun with courage and care. Let us now take a look at the point it has reached 20 years later, just as Tofaş about to turn 50 and has become the company to make the highest amount of investment in Turkey according to European Commission’s World R&D Investment List. Today, Tofaş R&D center, is one of the two largest centers of Fiat Chrysler Automobiles in Europe; it is the only R&D center outside of Italy serving Fiat’s European markets with the high technology and diversity of its laboratories around the world. It has nearly 700 employees and 18,090 square meters of laboratory and office space. The goal is to contribute to the country’s economy by producing exciting vehicles and technologies that fully meet customer needs in every region of the world and by developing passenger and commercial vehicles that are competitive in every respect. Tofaş showed its success in raising the national average in R&D investment values; it also has a significant place in the ranking among the institutions that invested in R&D across the world. By 2015, design and test investments in vehicle concept, style, body, interior design, suspension, engine, emissions, vibration and acoustics have exceeded 45 million Euros. So, what has an organization of this size done so far? Let’s take a look back at the automobiles on which R&D work has been done: Tofaş gained significant impetus to improve R&D competence by taking responsibility for the MCV project, which was developed for Fiat and PSA brands between 2005 and 2007. In the ensuing years, the development of the new Doblò for Opel, Vauxhall and Dodge brands played an important role in the helping Tofaş increase in exports by producing cars for six different brands. This success was a first in the Turkish automotive industry. The new version of the Doblò model was also developed for the North American market. Targeting both Turkish and other global markets, the development of a new passenger car and a new platform for this car was carried out by Tofaş R&D as well. The European Union Joint Research Center (JRC) annually publishes the Industrial R&D Investment Ranking6. This institution ranks the companies in the world and in the EU according to the resources allocated to R D by looking at the figures in the company’s activity reports. Tofaş has been one of the few Turkish companies that have entered the list since it accelerated R&D work. With the breakthroughs made over the last few years, the company to quickly rose up on the list and was ranked 535th in 2017. Thus, as the to invest in R&D

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Road stimulators at the Tofaş R&D. Following pages: The acoustics laboratory designed like a giant sound studio.

European Commission’s Joint Research Centre (JRC); The EU Industrial R&D Investment Scoreboard.

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in Turkey for the third consecutive time after 2015 and 2016, Tofaş pulled its rank up higher than 574 and 547, respectively. There is another important issue within Tofaş R&D that grows side by side with product development: technology development. When a product is being developed, advanced technology research continues in parallel with these studies although it is not certain if it will be ever used in that product. Çağlar Şahin cites an example: Technology development work is long-term, very costly and, if not managed properly, can lead to massive spending that yields no return. We pay particular attention to ensuring the balance between time and development costs with their use in the product. We evaluate strategically important technologies like electric vehicles differently, but we want to use the output of much of our work on a product that can be sold. Even if development periods are longer than the time needed to develop a single product, we extend our program longer accordingly. An example of this is the thrust washer we have developed to make cars lighter. One of the most frequently used methods of decreasing the weight of the vehicle is to make a certain design out of aluminum instead of sheet metal. In that case, the geometry of the part also changes completely. However, the properties of aluminum can change when exposed to certain temperatures in which paint is applied. Since we did not have time to develop a design that took into account the effect of heat, we developed a thrust washer that could be fitted into the car in the final stage of production of the Doblò America and went into production. Still, the development of that product continued after that. By working on the geometry of both the material and the part, we implemented the thrust washers that could be installed before sending the body to the paint shop and thus could not be affected from the year, on the Egea HB, which came out three years later. the carriers that could not be affected by the temperature before being sent to the furnace for dyeing, grew to the Egea HB vehicle, which flew three years later.

While Tofaş continues to work on technological research with universities, other R&D centers and lean entrepreneurs, it strives to ensure that these studies place Tofaş in a unique place in the FCA world and that the technology created is not only used for its own production, but also in the entire FCA world. Therefore, it concentrates its work on the areas it marks on the technology road map globally, such that existing and new products can meet current and future customer expectations, respectively. As often said, Tofaş constitutes a good example of how competition strategies based on R&D and innovation companies can be brought to life through top level support. Rahmi M. Koç emphasizes the importance of R&D for Tofaş as follows:

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As in every business, a strong R&D in unit in the automotive industry is the biggest guarantee of success. Both American and European hourly engineering rates, monthly salaries, and premiums are very high. In our country, this amount is half of most other countries. Turkish engineers and managers work more selflessly than their European counterparts. They complete the projects on time and most certainly stick to the budget. Tofaş is responsible for product development. Its engineering and an important portion of its parts are locally domestic. The same advantages apply to Tofaş’ light commercial vehicles. Therefore, Tofaş’ R&D is not only a huge economical advantage for itself but for the FCA as well. As you all know, the automobile world is now transforming into electric vehicles, unmanned automobiles and full automation manufacturing. In “full automation”, quality is at the highest level and the workers are not used. The manufacturing defect is almost zero. Therefore, today’s R&D centers should guide their works towards the industry’s 4.0 goal.

While working on individual projects, Tofaş also develops a roadmap to contribute to competitiveness with the advantages created by the 4th Industrial Revolution or by the Internet of objects. Beyond the technological renewal of individual machines and processes, the development based on the combination of machines, equipment and vehicles in the value chain that simplify our lives, is transformed into a winning strategy by creatively combining with what is exists and what can be made possible. There are two key ways of determining this roadmap: Using your plans to meet the needs of technology, customers, and new work environments and relationships, along with stakeholders in the entire value chain. The main thing to avoid is not to attempt at something because everyone else is doing it. Of course, it is also known that the approach will be futile when it is only addressed as part of the framework of the applying technological development to today’s working environment. In this context, Cengiz Eroldu summarizes the customer’s decisive position as follows: Regardless of the sector or product, in all areas and sectors, people expect to experience the best possible alternative at all points of contact. In this case, the competition of the sales experience at the dealer becomes not another automobile company, but any company in the service sector. Anyone who comes out on the market with the claim of meeting people’s needs is now obliged now offer the best of global and top-notch experiences. This applies not only to individual customers, but also to relationships between companies. All the brands we manufacture; therefore, seek a well-designed, well-executed experience that will make the work more efficient and trouble-free. We are also working on redesigning our understanding, competencies and organizational solutions to meet these expectations.

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Koç Holding CEO Levent Çakıroğlu’s assessment is a summary of Tofaş R&D’s approach: The dizzying developments in technology are also palpable in the automotive sector. While manufacturers continue to invest in electric or autonomous vehicles on the one hand, they are working to renew existing product ranges, increase technology levels, and reduce emissions. In such an environment, R&D competencies of companies will be the most important factor in shaping their future. The most important element that prepares Tofaş for its second 50 years will be the ability to constantly develop the technological capabilities in its DNA, to adapt quickly, and to train human resources. Therefore, I predict that Tofaş’ R&D investments will continue to increase.

A YE AR BEFORE 50

According to the Automotive Sector Report published in 2017, demand centers in developing countries would continue to be a driving force in terms of market and production dynamics, and the East was expected to continue its advantageous position against the West in production. Based on the same report, exports of the year 2017 were expected to grow by 13 percent.7 The new regulations in the SCT legislation and exchange rate fluctuations would also push competition in the automotive sector to a higher level. As Tofaş neared its 50th anniversary, the annual production figures expressed in the early day of the factory’s establishment were fast approaching 400 thousand. The Fiat Egea family was holding the market. From its launch in 2015 to 2017, sales figures were reaching 45 thousand, indicating that this family car would appeal to more people and continue to be the leader in sales. Egea was, in fact, a “first” in many respects. How would this rise continue towards the second half-century? Cengiz Eroldu explains: The firsts Egea achieved are a result of Tofaş’ efficiency in the product development process. However, we are in fact talking about a journey and constant improvement. For quite some time, Tofaş has been improving its product development and production skills and presenting successful products to world markets. We made a strong return to the passenger car market with Egea. More than 90 percent of Tofaş’ domestic market sales consist of products developed and produced by the company itself. More than 70% of the products we develop and produce are exported to 80 countries. It is a source of pride that the products we develop and produce are competitive in every

7 http://www.osd.org.tr/sites/1/upload/files/Otomotiv_Sektor_Raporu_TSKB-2208.pdf 18.10.2017.

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respect vis-à-vis their rivals in some of the world’s toughest markets. This gives us confidence for the entire value change as the variables in different markets balance each other out to a large extent. We will continue to succeed in both automotive and light commercial vehicles by introducing new products and entering new markets.

MANAGEMENT EXPORT FROM TOFAŞ

One of the news about the automotive sector published in papers in May of 2017 mad all Tofaş team members proud: Industrial Operations Director Akın Aydemir, who had been working in the factory since 2010, was headed to the United States to manage FCA’s Sterling Heights Factory in Michigan. Aydemir would assume his position as the director of a factory that would produce the new generation RAM pickup models, for which FCA had invested $1.5 billion in May. Former Quality Director Zeki Erdal Şimşek was appointed to Akın Aydemir’s place. Tofaş Board Member Temel Atay’s comments on the reasons behind the selection of an engineer from Tofaş for this position is quite clear: The overall staff policy at Tofaş focuses on the training of the personnel at each position based on his job definition without any level discrimination and the expectation of the highest level of performance in productivity and quality. In that respect, the pre-selection, training and experience programs of engineers and technicians are maintained at a level identical to that of European ones. As a consequence, both the employees at Tofaş, or those transferred from our factory to other factories of our partner FCA in different countries of the world are always successful and are mentioned in the FCA organization with a high level of appreciation for Tofaş. The most striking example of this is the fact that our production director, Akın Aydemir, is appointed to serve as the director of a factory in the United States.

Convinced that the most important factor behind Tofaş’ success is the company’s competent and focused employees and their work culture, Cengiz Eroldu believes that this distinguishing characteristic of the company will carry it into the future: The fact that our employees at all levels are sought-after in foreign countries demonstrates that our “exports” are not merely limited to our products. Working at Tofaş also means having the opportunity to develop as individuals that can be employed anywhere in the globe. What makes us distinct is that our accomplishments are globally meaningful and valid. Although Turkey’s position as one of the most competitive markets makes our lives difficult, it allows us to be more prepared on a global

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scale. In the upcoming period, we will once again be focused on our competencies, skills, organizational structure, and culture, making sure that all of these factors can keep up with the changing world and technology. Our distinction in this area is one of the important advantages that will carry Tofaş into the next 50 years.

What is emphasized here is the success that comes with the environment Tofaş creates for the personal development of its employees. HR Director Burhan Çakır says that Tofaş is exporting talent abroad mostly at managerial level: “Our friends recruited for positions abroad receive offers to work permanently in the region as a result of their superior performance. This can be considered a demonstration of Tofaş’ institutional success in talent development.” TOFAŞ OPENS ITS DOORS TO THE PUBLIC

In November of 2017, Tofaş opened the doors of the Bursa factory to the public. On certain days and hours of the week, anyone interested in automobiles and how an automotive factory works could join the tours organized within production areas. In the past years, some groups were able to visit the factory upon special request. Now, visits were organized as part of a system; similar to North American and European countries, interested parties could join the organized tours. The factory tour was organized as a unique and valuable experience for automobile enthusiasts, people who follow industrial progress, or simply the curious individuals who wanted to learn how an automobile was manufactured. Tofaş was the first factory in Turkey that could be visited like a museum by simply making an appointment via Internet. The work is not interrupted during the factory tour today; visitors see the ongoing production on site. Tour hours are determined with special attention to lunch hours or breaks, as the point is to see the factory in operation. Only the R&D center, auxiliary departments and paint shop are excluded from the tour, but the presentations on these units are shown on a screen during the tour, which lasts nearly one hour.

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Driving through time‌ Riding into the future‌


People, ride with us We’ll drive you without any vibration So much so, you think You’re lying on water We’ll drive you so soundlessly, You think you’re riding Your car’s shadow Bertold Brecht Bertold Brecht, Singing Cars, (Kurt Möser, “Otomobil Sanatta Nasıl İşlendi?”, trans. Dürren Tunç, Kitap-lık 57, 62, January 2003, İstanbul.)


It is impossible

to avoid speed. We are constantly gaining speed... We pretend to slow down from time to time, but our average speed is accelerating. As humans, our physical velocity has a limit. Yet, our minds and our intelligence do not. Because we want to be able speed and accelerate that speed even more, we create objects and vehicles that can help us reach that velocity. We are trying to find our comfort in this speed; we make it part of our comfort. We feel like we are standing still, even when a plane is travelling at 700 kilometers per hour. In reality, we are the ones that created that momentum. After all, time flows in its own rhythm; in fact, it hardly has any rhythm. We strive to create and shape our own temporality within that flow. Then, we attempt to take the time we create under control; we organize ourselves around it. There is only one thing we know: we amalgamate our minds and intellect with all we know and struggle to create new technologies to achieve “more…and even most..” of what is available. Hence, we save time and use that time to create new temporalities. We are building faster cars; As Brecht says, we are making vehicles that “drive us so silently” that we do not feel the acceleration. Acceleration makes us happy, but we are not satisfied; we try to build faster and more comfortable ones to use. So how far does this go? That’s the one question we know how to ask, but cannot provide answers to… The love for the road cannot be distinguished from the love of cars! It is both a sensual and spiritual joy that strips one of weight and human obligations, transforming a car into the sister of a water nymph. As ridiculous as it may seem from the outside, this construct, which brings another along with it, transforms the hasty man seated at the wheel into a kind of monk in a cave—a fakir than finds extraordinary inertia at an

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extreme speed. There is not a single entity that brings answers to his questions. Except his car.1

It is hard to predict how far things will go, even by today’s standards. Still, we know why and how. The fact that cars are built more powerfully and with increased comfort with each passing day naturally increases people’s quality of life. Companies engage in serious competition to diversify the capabilities of automobiles and in this day and age, the playmaker of that competition is quite obvious: R&D… Nowadays, the power of an automobile manufacturer’s R&D unit determines its competitive power. The path that leads to high efficiency, low cost and quality passes through R & D. In addition, it is not possible to make progress in the field of new automobile technologies required for artificial intelligence, digitalization, driverless automobiles, and to generate alternative energy sources in automobiles without R & D competence. Not making any compromises in product quality… Having a clear vision and path… Quality of products...Creating and maintaining a strong structure with a solid management and a high quality, educated work force ... Knowing the customers well... Is there a reason why an institution that can protect such a structure would not walk self-assuredly into the future and not provide perfect service? We can only appreciate, from where we stand today, the part played by Tofaş Türk Otomobil Fabrikası A.Ş., which Vehbi Koç founded half a century ago with good judgment and vision, along with the right people to stand by him. “Tofaş carries the title and the honor of being the first automobile factory in Turkey.” In looking at the 50-year-old image of this institution from afar and evaluating why it was able to follow its course without being derailed, Rahmi M. Koç offers the way to the future along with his good wishes: Being able to carry this flawlessly and profitably for 50 long years; maintaining the high market share; working constantly with dedication and faith… All of this is made possible through timely investments and good planning. I would therefore like to congratulate all Tofaş employees, past and present. In the automotive world, a big transition is anticipated in the next 20 years. It is now obsolete to build cars the old-fashioned way. Imagine, the market value of Tesla, which makes 80 to 90 thousand electric cars per year, is higher than General Motors, which manufactures 10 million cars a year. Why? Because they have already taken the first step into the

1

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future and paved the way. They have built their business on electric cars. In other words, they sell the future. Therefore, we must begin to see this transformation, make the necessary R & D investments in time, and not fall behind in this race. A consolidation has been taking place in the global automotive market over the last thirty years. Many brands have become history and numerous manufacturers have either closed shop or were purchased by others. The long-lost brands include Packard, Plymouth, Oldsmobile, Pontiac, Mercury, Kaiser, Imperial, DeLorean, Vector, Autobianci, Geo, Rover, Saturn, Hudson, Edsel, Saab, Rambler, Studebaker, and Yugo. The ones bought by others are Volvo, Jaguar, Range Rover, Seat, Opel, Audi, Vauxhall, and Skoda. At the end of a study he conducted, Marchionne concluded, “A company that manufactures less than seven or eight million cars a year has no chance of survival.” Therefore, companies are either merging or buying other companies to reach that 10 million. Fiat Chrysler’s CEO Marchionne is a visionary entrepreneur who can take risky decisions. Look at where Fiat and Chrysler were before he arrived and where are they now. We have no doubt that he will take the right steps in the future as well. I would like to congratulate Tofaş executives on their 50th year, hope that they will carry on as effectively in the next 50 years, and wish them a continued success.

In its next fifty years, Cenk Çimen hopes to see Tofaş as a leading, renowned company not only in Turkey, but also in the rest of the world. An entirely different automotive sector awaits us in the future. Electric vehicles, autonomous driving, and connectivity will be among the basic expectations in customer demand. Through the support of the digital vehicle, brand new services and purchasing habits will emerge. Therefore, digitalization, new technologies, and new service areas are at the top of our agenda. Globally, those who do not understand the game, this new world and how to take part in it are bound to disappear. This process is proceeding very swiftly. One must be quick to adapt. We are experiencing this transformation at Tofaş.

FIAT-TOFAŞ, 50 YE ARS TOGETHER

When Tofaş Türkiye Otomobil Fabrikası A.Ş. went into business with Fiat and its birth certificate was published in the Gazette in 1968, Fiat was already 70 years old. Today, Tofaş is the third production center of Fiat Chrysler Automobiles in the world; it does not set five-year periods as targets, but envisions where it will be in 2030. Ömer M. Koç, who took over the position of the Chair of the Tofaş Board in 2016, sees this journey as follows:

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Along with its widespread and strong dealer network, another strong aspect of Tofaş is its strong partnership structure. Koç Holding and Fiat Chrysler’s long-standing collaboration has led to many successful projects. We continue our investments with our long-term vision and our faith in Turkey and Tofaş.

In evaluating the 50-year-old partnership between Fiat and Tofaş, Rahmi M. Koç explains: Contrary to other automotive companies, Fiat adopted a strategy at the time, to opt for other niche markets. These included Yugoslavia, Russia, Spain, South America, and Turkey. They entered these markets before everyone else did. Entering a partnership with an international automotive company such as Fiat gave much impetus to the Koç Group both in terms of culture and prestige. Much water passed under the bridge since then. Fiat took over Magneti Marelli, Lancia, Ferrari, Maserati, and Alfa Romeo. In order to expand its tractor business, Fiat first bought Ford’s tractor business and created the New Holland brand, then bought Case. As for the heavy commercial vehicle business, the company purchased Cargo Truck from Ford and added it to Iveco. In 2009, with the agreement of the US government, Fiat was able to get Chrysler by bringing in technology, without any payment. The new company was founded in the Netherlands and the company moved its headquarters from Italy to London. Italian-Canadian lawyer Sergio Marchionne was the one to truly change the game for Fiat. He had big dreams. He wanted to get General Motors for a while after Chrysler. At one point, there was even word that Fiat Chrysler Automobiles would be sold. At that point, he separated Ferari from the group in a single maneuver and opened 10% of the company to the public, bringing in $4.5 billion. The value of the company reached $ 21 billion, making investors very happy. He is thus a great entrepreneur and businessman. However, it is important to remember that Tofaş is one of their most profitable investments.

Having closely observed the radical changes Sergio Marchionne made at Fiat, Bülend Özaydınlı evaluates the Fiat-Tofaş relationship at the time as follows: Fiat underwent a revolution with Marchionne. I was the CEO of Koç Holding at the time. We all witnessed how he transformed the system. A serious restructuring took place through the efforts of John Elkann as well. Marchionne wiped out the old system. I was fortunate enough to work with him when he was named CEO. We have a very harmonious dynamic. We were also going through a transformation period and initiating new projects. We were trying to make Turkey a production center of the Fiat

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group and succeeded at it. We were able to produce low-cost vehicles and make high-quality products within the Fiat world. Tofaş greatly benefited from doing this during Marchionne’s term. We also succeeded in giving weight to Turkish executives and working with them at critical points. Mustafa Koç was a key figure in refreshing the trust between Fiat and Tofaş during Marchionne’s term. The impact of the relationships on family level was quite significant.

Tofaş’s place in the FCA world becomes even more evident when the importance of this rarely-seen 50-year-old partnership is expressed by Chair of the FCA Board John Elkann, a third-generation member of the Agnelli family and grandson of Giovanni Agnelli. In the late 1960s, Fiat -under the presidency of my grandfather Giovanni Agnelli- was looking for fresh opportunities to open up to new markets such as Turkey with a strong and reliable partner. The ties with Koç and the subsequent joint venture with Tofaş was the result of this strategic expansion plan. I would like to underline, once again, the courage and vision of those who have stepped into such a partnership at a time when globalization had not yet overtaken the world. They laid the foundations of the growth we witness today. Today, this partnership continues to prove its power more intensely than ever and carries its goals forward. I am certain that Tofaş, which exports passenger cars and light commercial vehicles to all four corners of the world, will be a reliable partner in the future as well. Tofaş is one of the pillars of FCA’s presence in the EMEA region and a key element in our long-term strategy. We have achieved numerous and significant milestones together, both at the industrial and economic level. In 2016, for instance, Tofaş celebrated the 5 millionth vehicle produced since the foundation of the joint venture. However, the importance of Tofaş goes beyond its value as an advanced industrial player. It is also an exemplary collaboration of two international partners, which has remained solid over five decades and several generations.

Koç Holding CEO Levent Çakıroğlu explains this long-standing and exemplary partnership as follows: I believe that the future of Tofaş is brilliant in the harmonious, ongoing partnership between Koç Holding and Fiat-Chrysler. This strong partnership, based on mutual trust and a desire growth, has been developing further over the years. Most importantly, our partner believes in Turkey and in our company as much as we do. I am certain that Tofaş, a company that constantly reinvents itself and breaks sectoral records in production and exports, will continue to grow with new investments.

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TOFAŞ VALUES AND BEYOND

The big picture also demonstrates how the second fifty years will begin and how they will continue… As you get closer, you begin to develop a better understanding of the ideas and details that make it worthwhile. Tofaş members themselves tell you all you need to know: For example, “Tofaşlılık” People change, but the culture of being “Tofaşlı”, or a member of the Tofaş team, intertwined with Bursa, remains the same. The content of the concept of loyalty is expanding, but the affinity with the company and the Tofaş name grow stronger. Having created its own dynamics within the Koç culture, the Tofaş culture transmits 50 years of know-how to future generations. Those who are assigned to new position in different countries from an institution that is now able to “export” engineers and executives abroad, are proud not only to represent Turkey but for having been part of Tofaş. Alfredo Altavilla, together with Tofaş employees, had celebrated the release of the 500 thousandth Doblò from the assembly line, as well as the selection of the New Fiat Doblò as the commercial vehicle of the year in 2005. He remembers that celebration years later, even though more than 10 years have passed since... As a former CEO, the one incident that he recalls and was most touched by in speaking of Tofaş is a tangible example of the Tofaş spirit: I have witnessed many momentous occasions when I was in Turkey. Still, there is one that I can never forget. When I was CEO of Tofaş, Doblò won the “Best Van Vehicle of the Year” award and we decided to hold the Award Ceremony at the factory in Bursa to celebrate with the production workers. I can never forget that day. I had never witnessed such pure and genuine joy. Everyone at the factory was very proud. They were hugging and congratulating each other, singing songs. You could feel their commitment to their work. They had manufactured this vehicle. They were truly a team and that team had won the Champions League finals. It was a very emotional moment. Not just for me; the jury president, who was there to extend the award to Tofaş, could not believe his eyes and was deeply moved. And he had been doing this for 18 years… It is a rare, unique spirit. .

For example, education and investing in people Since it is an institution that has the courage to create new opportunities and re-generate itself, Tofaş continues to be a school for both the sector and its employees, meeting the needs of everyone with its brands. It is refreshing to see that people who think this way are not just Tofaş employees, but dealers as well. Ali Topçuoğlu, a Fiat dealer for 60 years, feels the same way:

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Tofaş plays an undisputed role in the Turkish economy. It is the backbone of the economy. For me, it is a school, almost a university. At least 10-12 thousand people are employed at Tofaş today. It is Turkey’s biggest exporter. Producing new models with the best performance, appointing the best managers to bring to increase its market share, supporting large investments, and providing input for the country’s economy made Tofaş the backbone of Turkey’s economy.

Today, Tofaş has a great engineering team that knows how to produce cars. Tofaş is a fine school... Many engineers trained at Tofaş are currently working in different positions in Turkey and around the world. The corporation’s corporate culture, which has firmly established itself over the years, makes them feel that they are in a different and unique environment. Production Director Recep Temizesen says, “If you are talking about putting people at the center, you are at the right place”: Making investment in robots, buying equipment ... Everyone does that. You can see similar equipment in all the “good” plants in Turkey or Europe. Then, there is the ensouling that equipment; people endow these machines with a soul. That has been happening here for years. We stand out with the difference our people create, not just with the great investments we make. Look at the systems we implement; human development is always at the center. I have been here in the last 25 years of this company’s 50 years. I was not here in the first half. But that’s what I saw when I came. A lot has changed in Tofaş since the beginning. People have created those differences.

For example, quality Reiterating that constant improvement is the basic principle at Tofaş, Koç Holding Automotive Group President Cenk Çimen adds that “doing better” is the other half of this principle and thus draws the outlines of the company’s approach to quality. We have very well-trained engineers and field workers at the Bursa Plant. They have carried Tofaş to the “Gold Plant” level with the harmony of their teams and their innovations and improvements in the production process. Today, many Fiat Chrysler factories come to Tofaş and take all the systems as their “benchmark”. This makes us proud. Tofaş now has the capacity to design and develop a vehicle from scratch and, carry out its investment at very competitive prices, and to produce it at the highest quality.

For example, quality of people The way Tofaş employees approach quality and the perception of quality supply industry establishments developed over the years have evolved

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into a true ecosystem and continues to grow, which is an advantage Tofaş has created for itself. It is exactly this human structure that İnan Kıraç articulates when he says, “I am proud of Tofaş.” The human structure working at Tofaş at the time is what brought us to this level in Turkey’s automotive industry. After that, some of them became foremen. Some left to set up their own businesses and work in the supply industry. The supply industry in Turkey is very powerful thanks to these people. That is why a Turkish vehicle can be sold anywhere in the world today. The only profitable company within the Fiat structure in Europe is Tofaş and is able to renovate itself. Egea is a very beautiful car and has been produced in an environment that involved Turkish engineers.

For example, sustainability and social responsibility By upholding its corporate sustainability policy “Life is Renewal”, Tofaş is constantly pursuing improvement and new goals. The concept of corporate management at Tofaş is rooted in generating added value to the entire country and all it stakeholders. The sustainability Cengiz Eroldu underlines below is multi-dimensional. Sustainability has economic, social, and environmental dimensions. First of all, economic sustainability is important. Society needs not only automobiles, but channels that can integrate with the global economy and an environment where employees can make progress. If we cannot provide it, there’s no point in doing the other good things we do. The development of Tofaş in the long run can only be possible in a society that will nurture us with humanitarian values, entrepreneurial spirit and creativity. Therefore, we are trying to do our best to develop our environment by sharing our known-how of professionalism and leadership. First of all, we offer educational facilities within the Tofaş Academy for the development of our employees. On the other hand, we have been continuing our work for a long time to support vocational education. Also, we invest in sports for the development of our young people. We want to transform Bursa into a basketball city because the future will be shaped by people equipped with these assets. We are striving to limit the environmental impact of our production activities and our products because global warming and environmental disasters are a threat to our future. We have set goals for every year to improve energy use in production, water consumption, waste emissions of our products, the amount of exhausted materials used and the impact on the environment.

For example, corporate culture and management philosophy In a strong corporate culture, creativity is derived from the comfort employees get from working by rules and principles, the peace of being

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in an established system and a part of an efficient production structure ... Arzu Çolakoğlu evaluates the approach Tofaş has created as a corporation that was formed within the deep-rooted institutionalism of Koç Holding, but was able to generate its own culture: I think that the strong institutional culture in Tofaş guides all the employees. In Tofaş culture, values of continuous progress, dedication to work, working with passion and modesty, and the accomplishments of the team and the institution rather than the individual come to fore. Tofaş is a company that values friendships and develops the people and companies it is in collaboration with. In short, I think Tofaş is a giant school with all these qualities. In terms of management philosophy, there is a feeling that all employees at Tofaş - whether they are a team or not - are leaders of their own jobs. We are working with the aim of reflecting, on our daily lives, our principles of leadership that mirror our corporate culture, but allow us to keep up with the rapid changes in the world and make our competitiveness and achievements sustainable, and thus carry us into the future. As Tofaş, I can say that we have adopted a concept of leadership that is ambitious, competitive, innovative, plain, and customer-oriented. We respect differences. We aim to build relationships based on mutual trust, examine the issues under our responsibility, make decisions based on available data, and solve our problems without making room for repetition.

Having worked as the Secretary General of the Corporate Management Association of Turkey Director of External Relations before joining Tofaş, Güray Karacar’s comments are important in evaluating the structure of the company: Prior to joining Tofaş in June 2016, my experience was centered on improving the institutional structures of both public and non-public companies in the capital market. During that period, I took part in the development of related laws and regulations by carrying out many projects that bring to life principles of fairness, transparency, accountability and responsibility and internationally accepted principle of corporate governance. After joining Tofaş, the one factor that affected me most in the shortterm was the corporate culture of Tofaş. I would like to point out that in bringing to life the aforementioned principles, I found Tofaş to be quite successful in creating its own style and sharing that concept with all levels while adopting the management culture of both its international partner and the Koç Group. I find that the use of technological possibilities in the survival of institutional cultures is more efficient and

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effective here compared to the many organizations I had the chance to work with. Leadership principles are very clear and openly express expectations from newcomers. You can find the experiences and good practices of the past 50 years on the intranet system. As a manager who had not yet completed her first year, all of this has helped me to understand and apply the institutional culture. On the other hand, the “sincere” attitude and behavior of employees are the most prominent feature of Tofaş’s corporate culture.

For example, teamwork Successful teamwork is one of the features that Tofaş employees are most proud of. It is an indispensable advantage for a production that needs to be fast and communicative. Koç Holding CEO Levent Çakıroğlu thinks that Tofaş is identified with teamwork: As a company, Tofaş has a very strong team spirit. The harmony of our Turkish and Italian friends on the teams is exemplary. Each time I visit the plant, I am pleased to observe that our employees are working with great enthusiasm and passion.

Product Engineering Director Erkan Polat also embraces this subject with great enthusiasm: By its nature, product development consists of many processes that run in parallel with one another. Development activities flow through areas such as Tofaş R&D, FCA, Commercial, Industrial units and our suppliers. Our friends manage the process with a number of local and foreign colleagues at the same time and go for results. At this point, teamwork, coupled with the desire and skill to run towards a common target, is the key to succeed. There are so many memories that I will never forget about our life and friendship. What always most impressed me was the following: when we are in a difficult situation, everyone would get together regardless of the time of day, day of the week. Sometimes, you would not even have the time to call them. A few times, I even witnessed our retired friends calling in to help. When Tofaş team members come together, you see that the memories occupy the largest place in their lives are about the things they have proudly accomplished in the past.

Regardless of which department they work in, the team spirit affects all employees. IT Director Özgür Çetinoğlu is one of the people to have been most influenced by the cooperation and coexistence that constitutes the very foundation of Tofaş’s corporate culture: I think that in our factory culture, cooperation, fighting together to

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overcome challenges and celebrating accomplishments together in particular are the most important factors of our company’s success. The rational decision-making ability in business and appealing to the spirits and hearts of the employees beyond emotional approaches in a businessoriented environment has perhaps been the most accurate indication of the Tofaş culture. Team play is very important for total success today. One thing that should not be forgotten here is that the team must consist of diverse employees. Tofaş’s philosophy is to listen to and evaluate different voices and ideas while running towards a common goal.

For example, their distinguishing qualities Cengiz Eroldu believes that what distinguishes Tofaş from the rest of the automotive market in Turkey is primarily the desire and faith in the company’s DNA to develop products, manufacturing, and opening up to global markets, and the capacity of renewal based on developing skills. The distinction created by the skill to be innovative in Cengiz Eroldu’s description is in the foreground: We have evolved from an assembly plant into a company that designs products for the world markets, manufactures them in very high volumes, and can export their products to the world’s toughest markets. The R&D unit we established in the early 1990s when it was still unknown in Turkey has a huge impact on this transformation. Being able to design new products based on social needs as a whole from market positioning to financing and evolving into a company that has the ability to earn the confidence of the shareholders and achieve targets goals in the best possible way for the projects to be brought to life ... And of course, to maintain that for many years. These features set Tofaş apart not only in the automotive sector, but among corporate companies as well.

For example, the future How is Tofaş’s vision determined while we are already trying to live the future? Koç Holding CEO Levent Çakıroğlu believes that Tofaş, as part of the Koç Group, will create its future through its own competence in the next fifty years: As Koç Group, our business model is designed to generate long-term value. It is our responsibility to prepare our companies not just for the next 5 or 10 years, but for the next generations. Equipped with a global perspective and a sustainable growth approach, Tofaş also prepares itself for the future in this regard. Tofaş has a great potential with its know-how, R&D competence, brands, partnership culture, and management skills. Therefore, evaluating this potential and creating additional value will be one of the most important priorities.

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Tofaş’s CEO Cengiz Eroldu describes the excitement they feel in their 50th year: Tofaş has passed through different stages of development in the past 50 years. As it transformed itself, the company transformed the Turkish industry and carried it forward as well. I see our founder, Mr. Vehbi Koç’s vision of building cars as an expression of his belief in the development of the society and the country’s industry. We are thrilled to have this vision of being a leading automotive company that carries the flag forward and shapes customer expectations. In its journey that began 50 years ago as an assembly plant manufacturing automobiles made of sheet metal body for the local market, Tofaş had many accomplishments and marked turning points in the history of the Turkish automotive industry along the way. Among them were the first exports to Europe on a mass scale, becoming the only production center of a model sold in global markets, and evolving into R&D center that develops certain technologies for FCA for global use. Finally, Tofaş developed and manufactured the Egea project, releasing a model group that FCA added to its product range to market in developed countries. This was a development that crowned the first 50 years. Egea, Fiorino and Doblò’s achievements, the highest daily and annual production volume and exports in Turkey also broke records. We have become one of the top 10 automotive producers in Europe with the largest production capacity at a single plant. 50 years in the automotive sector is not too long. Today, when we consider the lifespan of new product projects, we are reflecting on vehicles we can produce until the 2020s-2030s. Our goal is to continue our success of sustainability, and, for the next fifty years, to be a global player that generates value for its customers, uses technology well for this purpose, creates an environment in which its employees are happy to create global value globally for this purpose, and is therefore always considered first for new investments.

Tofaş is a company that strives to understand what people expect from an automobile and provides answers to that... A factory that has its unique microcosms with about 10 thousand employees, 1 million square meters of outdoor space, and 350 thousand square meters of indoor space... It has a production capacity of 450 thousand vehicles per year ... It provides world class manufacturing ... It has the ability to recognize its customers and make improvements continuously by putting them at the center ... It has the kind of staff that can determine need and produce solutions… With R&D constantly evolving through continuous investment, it benefits the country in direct proportion with its own growth... It derives its competitive power from science, research,

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education, and people... Taking advantage of its past and experience, aware of the changing rules of the game in the sector, equipped the vision and agility to make the most unexpected moves towards the future, and renewing itself at every step along the way, the company is moving towards excellence... The target is zero waste, zero inventory, zero fault, zero error ... Tofaş is moving toward this ideal as it enters its second fifty years.

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The production journey of a vehicle


TofaĹ&#x; from past to present


1968

Founded with the progressive vision of the late Vehbi Koç, Koç Holding founded Tofaş Türk Otomobil Fabrikası A.Ş. in partnership with the Italian Fiat Company.

1969

The construction of the factory began in Bursa in 1969.

1971

The factory was inaugurated with a ceremony on February 12, 1971. President Cevdet Sunay, Prime Minister Süleyman Demirel, Chief of Staff General Memduh Tağmaç, Chair of the Tofaş Board Vehbi Koç, Chair of the Fiat Board Umberto Agnelli, Minister of Industry Selahattin Kılıç, the Governor of Bursa, and a large crowd of guests joined the ceremony.

Put into operation with a capacity of 20 thousand vehicles, the factory first began production with the Murat 124 project.

The first motor sports team was brought together at Tofaş

Tofaş Oto Ticaret was founded.

1973

Automobile parts distribution company Opar was founded.

1974

Tofaş Sports Club was established.

An important turning point for the Turkish Automotive Industry, the first exports of Tofaş were made to Egypt with the Murat 124 model.

1976

Production of Murat 131 began.

1977

Production of Şahin was initiated.

1981

Production of Kartal and Doğan models began.

1984

Annual production capacity was increased to 35,000 vehicles.

1987

The first diesel engine assembly line at Tofaş was put into operation.

1990

Production of Tempra began.

Annual production capacity was increased to 100,000 vehicles.

1991

With a new investment, the Tempra engine came to be manufactured domestically.

The first CKD exports of the Doğan and Şahin models were made to Egypt.

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1993

The 1 millionth car of Tofaş to be released from the assembly line was a Tempra.

The first robot was purchased.

Production of Tipo began.

1994

With the Fiat Uno production, a vehicle in the B segment was presented to the market for the first time in Turkey.

Annual production capacity was increased to 200,000 to meet the increased demand.

Tofaş R&D was founded.

1995

The Serçe model was discontinued.

The first organizational change: the integrated factory

Following the export of the Tempra model, Turkey completed the first large-scale sale to European markets. This move paved the way of other manufacturers to produce vehicles for the European market in Turkey.

1996

Koç Holding’s founder and Honorary President Vehbi Koç passed away on February 25, 1996.

1998

Working on the Fiat Palio model, Tofaş joined the “global” automobile project and began managing a worldwide supply chain.

The first customer satisfaction survey was completed.

1999

Production of the Marea and Brava models began.

Motor sports team won first place in the Turkey F3 category.

Tofaş Basketball Club won the league championship.

2000

Fiat Doblò went into production and created its own segment in the Turkish automotive market. Tofaş employees were involved in the pre-production stages for the first time.

Tofaş Basketball Club won the league championship.

2001

Tofaş took the Turkey distributorship of the Alfa Romeo brand under the Fiat Auto umbrella.

With the decision of the Tofaş Executive Board, the Engine and Transmission unit was sold to the Fiat-GM Powertrain Company.

Tofaş became the leader in exports.

Fiat Motor Sports team won the Turkey Brands Championship.

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2002

The Palio series was renewed; the Siena model was discontinued.

Production of Albea began. A new product prototype was developed for the first time with the Albea project; the model later joined the Fiat’s global product range and was put into production at Fiat plants across different countries.

Renowned Formula 1 pilot Michael Schumacher visited Turkey for the first time as the guest of Tofaş to participate in the launch of the Fiat Palio advertisements in which he starred.

The Tofaş Museum of Cars and Anatolian Carriages in Bursa was opened in Bursa.

Hybrid Doblò made history as the first hybrid vehicle in Turkey.

Tofaş Gazette went into publication to further internal communication and to inform workers of developments, information, and plans concerning the company.

The collective drum-play of 2208 Tofaş team members, dealers, and service organizations at the internal communication assembly designed with the concept “Tofaş Drums In” made it into the Book of Guinness World Records.

The Bird Series was discontinued in the domestic market.

Jan Nahum was named Fiat’s Director of International Business Development.

Mustafa V. Koç was elected Chair of the Board at the 35th Annual Meeting of the Company.

Tofaş became the sector leader, exports champion, production champion, and motor sports champion.

Alfa 147 was launched.

2003

Honorary President of the Fiat Companies, Giovanni Agnelli passed away on January 24, 2003.

As Tofaş’s 2 millionth car, the Fiat Palio Go was released from the assembly line at a ceremony in which then-Prime Minister Recep Tayyip Erdoğan also participated.

Founded in 2000 as a co-initiative of the Koç and Fiat Groups, all shares of Koç Fiat Kredi Finansman AŞ was purchased by Tofaş Türk Otomobil Fabrikası A.Ş.

Fiat Motor Sports team won the Turkey Brand Championship for the third time.

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2004

Panda, Strada, Idea, as well as Alfa 166 and Alfa 156 Sportwagon models were launched.

Fiat Moto Sports won the Super 1600 Championship.

Chair of the Fiat Board Umberto Agnelli passed away on May 28, 2004. 2005

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The MiniCargo project was initiated to develop and manufacture a new light commercial vehicle for the Fiat, Peugeot and Citröen brands. This project was a first in multiple brand production.

Fer Mas Oto Ticaret A.Ş. was founded in 100% partnership with Tofaş Türk Otomobil Fabrikası A.Ş. Thus, Tofaş became the official distributor of Ferrari and Maserati in Turkey.

Production of Fiat Linea began.

Doblò received “The Commercial Vehicle of the Year” award.

Fiat Sports won second place in the Super 1600 category.

2006

Tofaş managed the product development process in the renewal of Doblò.

Aiming to increase the standards of the industrial plants within the FCA, World Class Manufacturing (WCM) program was implemented at the Tofaş factory.

Fiat Linea was the recipient of the AutoBest award.

The Fiat Doblò won the “Commercial Vehicle of the Year” award.

Doblò was the 2.5 millionth vehicle manufactured at Tofaş.

Grande Punto, the New Ducato, and Sedici were launched in Turkey.

Fiat Motorsports team won the Turkey Championship in Super 2000.

2007

The production of the MiniCargo model began for Fiat as Fiorino.

The one millionth Fiat Doblò was released from the assembly line.

Tofaş became the Turkey distributor of Lancia.

Scudo was launched.

Fiat Motorsports team became the champion of Turkey Super 2000 and came second in the European Rally Championship.

Tofaş was the first plant to reach the bronze level of WCM.

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2008

Tofaş’s 40th anniversary was celebrated at the Tofaş Museum of Cars and Anatolian Carriages in Bursa.

The factory’s capacity was raised to 400,000 vehicles per year.

A new record was broken in exports with 210,000 vehicles.

Bravo and Grande Punto FL, Fiat 500, and Lancia Delta were launched.

Linea was the recipient of the Autobest 2008 award.

Fiat Motorsports came in third at the European Rally Championship.

2009

Fiat Fiorino was the third millionth vehicle Tofaş manufactured.

Tofaş was the first factory among 175 FCA plants worldwide to reach the Silver Level in World Class Manufacturing (WCM).

Doblò was the recipient of the “Commercial Vehicle of the Year” award.

Punto Eva and Albea Sole were launched.

Tofaş Basketball team was promoted to the First League.

2010

Production of the New Doblò began.

Doblò production reached one million.

The New Doblò was selected the “2011 International Commercial Vehicle of the Year.”

2011

The 40th anniversary of the start of production at Tofaş Türk Otomobil Fabrikası A.Ş. was celebrated with a ceremony organized at the plant.

The number of simultaneously manufactured brands reached five with the start of Doblò’s production for the Opel and Vauxhall brands.

Fiat Fiorino won the “Commercial Vehicle of the Year” award.

The Cargo version of the New Fiat Doblò was the recipient of the “Best Light Commercial Vehicle of the Year Award” at the Fleet World Honours in England and also received the “Fleet Environmental Award of the Year.”

Giulietta was launched.

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2012

Following the merger of Fiat and Chrysler, Tofaş received the Jeep distributorship of Turkey.

Fiat Fiorino was released from the assembly line as the four millionth vehicle Tofaş manufactured.

Developed and manufactured on the New Fiat Doblò platform as part of Tofaş’s multiple-brand project, Opel Combo was put on different markets across the world, including Europe.

2013

Tofaş reached the Gold Level in World Class Manufacturing (WCM).

The new R&D building was inaugurated.

Association of Tofaş Retirees was officially established within the company.

2014

The five-year collaboration that began in 2009 between Fiat Group and Chrysler companies was completed when Fiat purchased the entirety of the Chrysler company. The Fiat Chrysler Automobiles (FCA) was thus established.

Fiat Doblò’s export to Canada and North America under Promaster City of the RAM brand began. Hence, the number of brands manufactured at Tofaş increased to six.

2015

Production of Fiat Egea Sedan began.

Fiat Doblò was selected “The Greenest Commercial Vehicle of the Year” by Green Car Journal.

Tofaş R&D Center was the recipient of the “Best R&D Center in the Automotive Sector” at the Private Sector R&D Centers Summit organized by the Ministry of Science, Industry, and Technology and was also the recipient of the “Third Best R&D Center” among all R&D centers in Turkey.

Fiat Doblò was launched in Turkey and across all of Europe with its renewed fourth generation model.

Fiat Doblò’s 1.5 millionth vehicle was released from the production like in April.

Now at Gold Level in World Class Manufacturing (WCM) Tofaş was awarded prizes in two different categories in the Golden Glove Good Performance in Occupational Health and Safety Awards organized by Metal Industrialists Union of Turkey (MESS).

Tofaş received three different awards in innovation, exports, and corporate tax in “Contribution to Economy” from the Bursa Chamber of Commerce and Industry.

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2016

Chair of Koç Holding and Tofaş Board of Directors Mustafa V. Koç passed away on January 21, 2016.

Ömer M. Koç was appointed as Chair of Koç Holding and Tofaş Board of Directors.

The production of the Fiat Egea hatchback and station wagons was initiated. The models were launched on the global market under the name “Tipo.

The sedan of the Egea Project was marketed in Mexico as Dodge Neon.

As the highest selling model of Turkey, Fiat Egea was the recipient of Autobest 2016 and was selected the best car in Europe.

Egea Hatchback was released from the belt as the five millionth vehicle of Tofaş.

The number of R&D center employees reached 700.

Tofaş was named the leader of production and exports with recordbreaking numbers in the Turkish automotive sector.

Tofaş was the recipient of the “Automotive Sector Champion” in the Private Sector R&D Centers Summit organized by the Ministry of Science, Industry, and Technology.

Tofaş was at the top of the list in the European Union R&D Investment Score list.

The number of female personnel neared 500 at Tofaş following efforts to recruit more women. Among the female employees in R&D, assembly, quality control, body, mold, and executive levels were the first two TÜT leaders.

Alfa Romeo 4C Spider, 488 Spider, and Maserati Levante were launched.

Tofaş initiated “Tofaş New Generation,” a social responsibility project that reaches out to thousands of children and their families.

After year year-long break, Tofaş basketball team once again entered the Super League.

A sports hall named after the late Mustafa V. Koç was inaugurated.

The renewed Fiat Fiorino was the 1 millionth model of the MiniCargo Project, one of the milestones in the history of Tofaş.

Having created its own segment as one of the most important models in the history of Tofaş, the last classic Doblò was released from the assembly line.

The Direct Use of Solar Energy During Production Periods was a finalist in the “Process” category of EU Environmental Awards Turkey.

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“The “5 R Project for Sustainable Waste Management” received an award in the “Waste Management” category in the 2016 Sustainable Business Awards given by the Academy of Sustainability.

Fiat Doblò was selected the “Greenest Commercial Vehicle of the Year” by the Green Car Journal. Having received the same award in 2015, ProMaster City was he first car to receive the same award for the second consecutive time.

Tofaş’s “5 R Project for Sustainable Waste Management” was the recipient of the award given by Çevko Environmental Protection and Packaging Waste Recovery Foundation as part of the Green Point Industrial Awards.

2017

The yearly production capacity was increased from 400 to 500 thousand vehicles.

Tofaş was at the top of the list of 2016 R&D investments from Turkey according to the European Commission’s Joint Research Center.

In the 2017 Productivity Project Awards given by the Ministry of Science, Industry, and Technology, Tofaş received the First Prize in the “Large Enterprises Process Improvement Category” with the “Capacity Increase Project.

The Turkish Exporters Assembly (TİM) awarded the exports champions. According to the “Top 1000 Exporting Companies-2016” study, Tofaş was in second place by raising exports to $3.19 million with an increase of 55%. .

As of November 21st, Tofaş opened the factory doors to the public interested in industry, the automotive industry, or simply in how an automobile factory works.

According to Istanbul Chamber of Industry’s (İSO) 2016 “Turkey’s 500 Biggest Industrial Establishments,” Tofaş was in third place in terms of the size of sales with 12 billion 856 million TL. Tofaş had ascended from fifth to third place since 2015.

Alfa Romeo Giulia, and Jeep Compass were launched.

The loan Tofaş received to use for financing the investments of Egea SW and HB was selected the most successful financial operation in Turkey in its own segment in the 2017 awards ceremony of Bonds and Loans, a large and highly prestigious organization that brings together bank and nonbank financial institutions and companies.

In 2016, Tofaş became the leading Turkish company with highest exports to the US, ABD with the ProMaster City, the RAM-brand version of the Fiat Doblò.

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Tofaş was the recipient of the “Exports Achievement Award” and “Technology Achievement Award” in the Exports, Technology and Supply Industry Achievement Awards organized by the Automotive Industry Association (OSD).

Having worked as the Director of Industrial Operations at Tofaş since 2010, Akın Aydemir was transferred to Fiat Chrysler’s Sterling Heights Factory in Michigan as the General Manager.

Fiat Egea family received two important awards from Austria: Sold in Europe as Tipo, the sedan and station wagon models of Fiat Egea were both given 1st prize in the competition organized by OAMTC (Österreichische Automobil, Motorrad und Touring Club).

Designed to provide 24/7 information and suggestion services through different channels to Fiat, Jeep, Alfa Romeo, Lancia, Otoeksper and Opar customers, Tofaş’s new “Customer Care Center” was opened in Bursa.

Three different programs of Tofaş Academy received awards at the “2016 Brandon Hall Excellence Awards” organized by Brandon Hall, one of the most prestigious intercorporate training and development. The Sales Academy received the bronze in “Best Advance in Talent Acquisition Process,” and “Leadership Principles” received the bronze in “Corporate Cultural Development,” whereas the “Circle of Experience” received the silver in “Coaching and Mentoring.”

Tofaş was the recipient of one gold, one silver, and two bronze medals in the international business competition The Stevie Awards for Great Employers.

Tofaş won second prize in the “Large Enterprises” category with the project “Direct Use of Solar Energy in Production Processes-Solar DRY” at the “Energy Efficiency Awards” organized by the Istanbul Chamber of Commerce (ISO) to encourage companies contributing towards sustainable development through efficient use of energy.

Tofaş was awarded the “Contribution to Logistics Award” for the second time at the “8th Atlas Logistics Awards” based on the assessment of exports data.”

As the joint project of Corporate Communication, Human Resources, Information and Communication Technologies and Customer Experience, the Intranet and mobile application TofaşGO was selected the best Intranet project of the year at the European Excellence Awards given to superior communications projects of various sectors and categories in Europe.

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