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International Marketing
Final Project ( Tesla / Karsan Joint Venture in Turkey)
1. Executive Summary
XXXXXXXXXXFounded in 2003, Elon Musk alongside Martin Eberhart and Marc Tarpenning are three Silicon
Valley engineers who founded Tesla Motors Inc. to prove that electric vehicles will soon be on the rise
over gasoline-powered cars. Over the years, the electric vehicle industry growth has been increasing due
to fuel prices remaining high in several foreign countries. As a result, the demand for more energy
efficient cars has been on the rise due to the concern for the environment. Tesla Motors Inc., is about
“being in the right place at the right time,” which is why they have been more successful than other
electric car companies, “including Fisker, and other clean tech companies in general, [whom] have failed.”
While it’s all about timing, Tesla Motors Inc., believe that Turkey will be the next emerging market for their
consumers. As the Turkish Lira is losing value, this makes Turkey have the world’s most expensive oil
and gas while electric prices are low. The Tesla Motor Company has created a lineup of vehicles which
consists of Model S, Model X, and the Roadster. While each vehicle is made up of different components
targeted to a specific consumer, Elon Musk was able to manage each vehicle under the same
specifications, including zero emission cars with the ability to go nearly three hundred miles per charge.
These vehicles have withheld the expectations of a luxury car featuring things such as a high tech
panorama roofing and a touch screen dashboard.
2. Product / Service
XXXXXXXXXXInstead of introducing an existing vehicle that has already been produced from the trio lineup,
Tesla Motors would like to collaborate with Karsan, whom have been operating in the Turkish automative
industry producing “light” commercial vehicles in a joint-venture. While Karsan is owned 100% by Turkish
capital, together we will work to produce and manufacture a newly innovated electric vehicle using the
ase model S as a guide that will meet the needs of the Turkish consumers under two companies.
Through this joint-venture, Karsan will provide the information and supply the resources for production
throughout Turkey and give us insight on the cu
ent market in the constructive process while Tesla will
aid in the creative design process, research and development, and innovation.
We have chosen to do a joint-venture with Karsan of Turkey for a number of reasons. The
Mission statement of Karsan is, “Identification of transportation needs, formulation of the
necessary systems, products and services to design, produce and present”. The needs for transportation
in Turkey is for electric cars. We will utilize Karsan for design, production, and presentation. Karsan has
4 main fields of operations, which fit into our needs as a joint venture.
These fields are,"Original Equipment Manufacturing (OEM)", providing development,
manufacturing, marketing, sales and after-sales services for Karsan
and vehicles in domestic markets
and a
oad, "Integrated Strategic Partnerships", providing manufacturing, marketing, sales and after-
sales services for
ands that have targeted growth in the region, “Contract Manufacturing", meaning
design and engineering support as well as vehicle manufacturing for powerful global
ands "Other
Operations", covering various services that the company provides for both local and foreign
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manufacturers”. Because the joint-venture is based on meeting the needs and desires of the people in
Turkey, Karsan has “aimed to offer modern product and service solutions” since it was founded in 1966.
❖ Product: High technology electric car with the supply resources from our partner Karsan Company
3. Country’s Information for Decision Purposes
➢ Countries selected: Turkey (Middle East) and South Korea (Asia)
Geographic and Demographic:
Turkey South Korea
Industry Textiles, food processing, autos, mining, steel,
petroleum
automobile production, chemicals, shipbuilding, steel,
textiles
Imports
(Turkey does have much
interaction business with US than
South Korea does) specially
absolute zero in vehicles import.
America's exports to Turkey amounted to $11.1
illion or 5.6% of its overall imports.
- Aircraft, spacecraft: $1.7 billion
- Machinery: $1.2 billion
- Iron and steel: $1 billion
- Medical, technical equipment: $729.5
million
- Oil: $689.1 million
- Pharmaceuticals: $556.9 million Cotton:
$532.3 million
- Electronic equipment: $478.3 million
- Plastics: $432.8 million
- Organic chemicals: $415.4 million
US exports to South Korea amounted to $44.2 billion or
10.1% of its overall imports.
- Machinery: $7.8 billion
- Electronic equipment: $6.7 billion
- Medical, technical equipment: $3.5 billion
- Aircraft, spacecraft: $2.4 billion
- Vehicles: $1.7 billion
- Oil: $1.7 billion
- Other chemical goods: $1.5 billion
- Plastics: $1.5 billion
- Organic chemicals: $1.3 billion
- Cereals: $1.3 billion
Exports
(Same like Import Factors)
Apparel, foodstuffs, textiles, metal manufactures,
transport equipment
Electronic products, machinery and equipment, motor
vehicles, steel, ships, textiles
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Political Opportunities
(The government on both Turkey
and South Korea show interests
on developing the electric car)
• The Turkish government wants to promote
green cars in the country.
• The Turkish government has been
working towards producing its own
'national vehicle', designed to showcase
the region’s production and development
facilities.The local and central Turkish
governments and administrations show
essential interest to the automotive
industry and offer extensive incentives for
the domestic manufacturers when the first
Electric Vehicle was marketed by Renault in
2012.
• Initially the South Korean government had the
ambitious goal to become the fourth largest
market for e-mobility in 2015.
• The Korean economic system and Electric
Vehicle Industry are dominated by large
government-sponsored industrial
conglomerates known as ’chaebols‘ which were
formed after the Korean War.
• The government said it will invest 562.1 billion
won (US$490 million) this year to promote the
application of nano-technology on not only
automobiles, but also in the development of
semiconductors and new materials.
GDP per Capita
XXXXXXXXXX)
And The GDP annual growth rate
of Turkey will have significant
aise in 2016.
U.S. $20,438
(1.00 USD= XXXXXXXXXXTRY)
U.S. $33,629
(1.00 USD= 1,154.86 KRW)
Consumer Behaviors
(Both Turkey and South Korean
has a good consumer purchasing
power on quality product which is
a huge opportunity for announcing
new technology products such as
high quality car by our Tesla
Company)
- Consumers are aware of quality
(certificates of guarantee).
- When deciding to buy, the Turkish
consumer finds out about conditions of
payment.
- Young people are aware of advertising
and like products close to those which suit
western tastes. However, concerning
foodstuffs, traditional Turkish products are
unanimously approved.
- Korean consumers are very sensitive to the
power of the
and name, the healthy aspect of
a product and perfect after sales services.
- They are ready to pay for the quality. Korean
consumers like to be guided and well informed
when they buy something.
- They are less and less nationalist in their
purchasing preference.
Consumer Segmentations and
Trends
Middle aged in Turkey probably is our target
ecause:
- The largest population in Turkey.
- Middle Youth consumers value their car
ands.
- All consumer segmentations in South Korea does
not look like they have much interest on cars
or electric technologies.
- Generations like beauty products or spend much
money on education, entertainments, fashion,
travels, or family life.
Climate Temperate; hot, dry summers with mild, wet
winters; harsher in interior
Temperate, with rainfall heavier in summer than winter;
cold winters
Te
ain High central plateau (Anatolia); na
ow coastal
plain; several mountain ranges
Mostly hills and mountains; wide coastal plains in west
and south
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Market Comparisons and Reasons why our company chose Turkey
❖ Car Market from the past few years:
Turkey
Top 5 largest Automotive Companies: Oyak Renult, Ford Otosan, Tofas, Hyundai Assan, and Toyota
• There are 4 popular types of vehicle in Turkey: Passenger car (Oyak Renault and Hyundai), Light
Commercial Vehicle (Ford Otosan and Tofas), Heavy Commercial Vehicle (M.Benz Turk and Ford
Otosan), and Tractor (Turk Traktor)
• The highest domestic market sales (demand): Passenger Car and Light Commercial Vehicle that
our main product is Tesla which will be a good choice for expanding the market to Turkey.
• The electric vehicle is still not
oadly available in Turkey and still underdevelopment which is a good
opportunity for us to come in and create a new product.
--> Finally, we decided to choose Turkey as our target market to expand and export our electric car
technology.
South Korea
Top 5 largest Automotive Companies: Hyundai Motor, Kia Motors, General Motors Korea, Ssangyong
Motor, and Renault-Samsung Motors.
• There are many types of electric vehicle in South Korea has been sold already. Below is the chart of
EVs was sold in 2015
Model Jun XXXXXXXXXXMarket Share
BMW i3 39 12%
Chevy Spark EV 4 5%
Kia Ray EV 0 4%
Kia Soul EV 221 52%
Samsung SM3 ZE 101 27%
Total XXXXXXXXXX%
•
--> So if our Tesla Company enters this market, there will be many risks because of potential competitors
in South Korea, so we will have many disadvantages on developing the product and gaining more market
share. These ba
iers can lead us into a dangerous situation and the loss will be absolutely presented.
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In addition, the people of South Korea do not live in a
ick and mortar