Turkey's Inci aims to be top 100 supplier by 2023

Perihan Inci: ''We are looking to produce more sophisticated parts.''
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Turkish conglomerate Inci Holding aims to be one of the world's top 100 automotive suppliers by 2023 with sales of $2 billion, up from the equivalent of $496 million in turnover last year. Through its partnership with Iochpe-Maxion, Inci already contributes to the global leader in steel and aluminum wheels. The company, which also makes starter batteries primarily for the aftermarket, plans to grow through automotive and non-automotive acquisitions starting in 2014 and by offering affordable engineering services. Inci President Perihan Inci, daughter of company founder Cevdet Inci, outlined the company's plans during an interview in Izmir, Turkey, with Automotive News Europe Managing Editor Douglas A. Bolduc.

What does Inci have planned for 2014?

This year we've worked hard on organizing, planning and developing an investment strategy. We are like an athlete training for a competition because now we are really ready to run. We want to stay ahead of our competitors and for that we have to make some mergers and acquisitions. Some of them will happen before the end of 2014. These mergers and acquisitions will be in sectors we are currently as well as new business areas and they'll take place in Turkey as well as in other countries.

Automotive currently accounts for about 90 percent of your annual sales. Is that too much?

We're aware that this is risky so we are looking for opportunities in other areas. We are already looking to expand our businesses in logistics and waste management because both of these areas fit well with our automotive business. We export nearly 80 percent of what we produce in Turkey so we can also transport goods for other companies.

What about automotive deals?

We are looking to produce more sophisticated parts as well as do the engineering for these parts because that provides even more added value. In order to reach our targets, we need these types of products and services.

Where are you looking?

The crisis in Europe has left some companies in financial trouble. We are looking at companies there to see if there is something we can do or whether it makes more sense to make an acquisition. We're not looking at small companies. The key things we're looking at are the company's turnover, industrial know-how and customer list. We can also move the production here, where labor costs are cheaper.

What is the hourly wage in Turkey?

It's 4 euros to 7 euros per hour for a blue-collar worker.

Is Inci profitable and will it be profitable in 2014?

Yes, Inci is profitable and we aim to be profitable in 2014, but it's really getting harder, especially in the auto sector. This is because of the competition with other suppliers as well as other countries.

Are your auto operations profitable?

Yes. But we need this to be sustainable because there is a very thin line between profitable and unprofitable.

Meet the boss
NAME: Perihan Inci
TITLE: Chairman, Inci Holding
AGE: 50
MAIN CHALLENGE: Boosting profit margins in automotive business by winning more r&d and engineering work from customers.

What's being done to help boost margins in your automotive businesses?

We've spent the last decade concentrating on r&d and innovation. Compared with Europe, the cost of engineering is very competitive in Turkey. This gives us the chance to provide more added value for our customers.

What is the average cost for engineering services?

It is 10 euros to 12 euros an hour.

What convinced Inci to move from being a low-cost producer to a company that also offers r&d expertise?

Turkey had a geographic advantage because we are close to Europe and we have a trade agreement with the EU. In the past, China seemed so far away for many and communication was more difficult. That advantage no longer exists so we must offer something more to our customers, such as engineering skills and innovation.

What percentage of your wheel business is original equipment and what percentage is aftermarket?

For aluminum wheels it is 100 percent OE and for steel wheels it is 95 percent.

Who are your top auto customers?

Ford, Toyota, Renault, Honda and Hyundai.

What percentage of the battery business is OE vs. the aftermarket?

It's about 80 percent aftermarket and the rest is OE.

When and why did you leave the original equipment business for batteries?

It was around 2000 to 2004. We left because we didn't see a chance to survive. The margins were too thin. We focused on the aftermarket and on boosting our r&d and we've built up the OE business again. Also, if you don't have any aftermarket share, you cannot survive during a crisis like in 2008 and 2009.

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