‘You will get only so far without spare parts’: Turkey is looking for a way to Tatarstan car service

Turkish automakers are waiting for Putin and Erdogan to come to an agreement

Turkish automakers are rushing to establish bridges with Tatarstan partners in anticipation of the BRICS Summit in Kazan. According to them, a bilateral meeting between Vladimir Putin and Recep Tayyip Erdogan will take place here on a wide range of issues, including sorting out international payments with partners from Russia.

“We expect that the main issue at the meeting of Erdogan and Putin in Kazan will be the reconfiguration of the payment system (making payments)," said Murat Turhan, the head of the Turkish holding company KCS Koçaslanlar at the auto parts manufacturers forum in Kazan. “There is information that payments will be made not through commercial banks in Turkey, bypassing, through third countries of the world. I think that a common fund will be created and payment between the countries will be made through the National Bank [of Turkey]," he believes.

This scheme will simplify settlements with counterparties from Russia, with whom Turkish businesses have stopped working directly due to the threat of international sanctions.

“Everyone who came here is waiting for such a decision to be made," Ömer Lekesiz, a sales director at Akusan, a battery manufacturer, supported.

Currently, Turkish companies are shipping products to Russia through “third parties”. That is, logistics operators purchase it in the interests of the Russian customer, make settlements with Turkish suppliers and deliver it to the recipient in Russia.

“Our obligations [to logistics operators] end at the border of the enterprise," said Murat Turhan, the head of KCS Koçaslanlar.

Why is Turkey a paradise for car owners?

Due to the complicated scheme, the import of automotive components from Turkey to Russia has noticeably declined over the past two years, the forum participants noted. However, no specific figures were given. However, large car holdings mitigated the drop in imports by transferring logistics centres to Russia. According to Murat Turhan, the head of KCS Koçaslanlar, they managed to reach an agreement with their Moscow partners and open a head warehouse in the Moscow region. From here, spare parts are supplied for heavy trucks MAN, Renault, DAF, Volvo, which are still in operation in Russia.

“Why is Turkey a paradise for car owners? Many European companies produce automotive components in our country. Turkey is a Klondike of original and local spare parts," he stressed.

However, the Turks themselves are not included in the capital of the logistics complex, limited to the supply contract.

“In Tatarstan, we consider KAMAZ as a partner, as we could provide them with a lot of spare parts," Turhan noted.

In addition, partners could be “large logistics companies that have their own warehouses and car parks”.

KCS is a large multi-brand holding company with a turnover of over 450 million euros. It has its own service stations throughout Turkey, 13 own warehouses.

“There are warehouses in every region of Turkey so that service stations can make repairs quickly. Last year, 220,000 trucks passed through them," Murat Turhan said.

The second direction is the production of auto parts under its own brand. They produce filters for trucks, exhaust systems, suspensions, and brake systems.

KAMAZ is losing its share

The domestic KAMAZ brand remains the sales leader for June 2024, according to the data of Autostat agency. Its share in the first month of summer decreased to 18.3% (a year ago it was 22.4%). By the end of June, 1,966 new KAMAZ trucks were sold in Russia. It is followed by four Chinese brands — SITRAK (1,714 pcs.), Shacman (1,408 pcs.), FAW (1,117 pcs.), Dongfeng (702 pcs.). Of these, SITRAK, Shacman and FAW's share decreased, while Dongfeng's increased.

Among the leading models, half show a drop — KAMAZ 65115 (-20.2%). Accordingly, the second half is in the black. Sales decreased most noticeably at FAW CA3310 (-65.9%), and increased (on a low base) at FAW J7 (6.2 times). If we consider the results of the 6 months of 2024, then during this period the volume of sales of new trucks in Russia amounted to 60,488 units — by 3.6% less than in January — June last year.

At the same time, the Turks are jealous of the conquest of the Russian car market by Chinese automakers. According to them, a lot of spare parts are used from China, but they have a problem with quality and warranty.

“Their mileage is no more than 30,000 kilometres, whereas ours is up to 50,000 kilometres. Our observations show that the Chinese are interested in selling cars, but after the sale it is very problematic, they do not care about the service, Turkish companies claim.