The exciting growth calculation

JUST nine years ago, there were 475 automobiles for every 1,000 people in Europe. By 2010, the figure had reached 550. That means that the number of automobiles per 1,000 people in Europe has grown by 15.8 percent in nine years. Turkey grew faster than Europe. In 2002, there were just 70 automobiles for every 1,000 people. Over a period of nine years, this figure increased by 31.4 percent to 92. The meaning of these figures can be summarized as follows: in 2002 consumption in Turkey was 6.7 times less than in Europe but today the difference has been reduced to 5.9 percent. The gap has narrowed but it is still there.
For many sectors, this gap represents “high growth potential”. Everybody is excited by the fact that the Turkish market is unsaturated in so many areas. In any case, these per capita consumption figures are persuading foreigners to enter the Turkish market.

CAN WE CATCH UP WITH EUROPE?
Our research in 26 important sectors and sub-categories shows that per capita consumption in Turkey lags far behind Europe. There are sectors, such as leather, clothing and paint, where it will be very difficult to close the gap but which still have a very high growth potential. In the Internet, bottled water and leasing, Turkey is expected to catch up with European levels of consumption very quickly. In retailing and insurance, the projections are that per capita consumption will reach European levels within 10 years.
For example, per capita leasing utilization stands at €22 in Turkey, while it is €321 in Europe. Even though the gap is 14.6-fold, Financial Leasing Association (FİDER) Chair Bülent Taşar still believes that this gap can be closed within five years.

GROWTH SCENARIOS
According to Planet Retail, per capita retail expenditure in Turkey has rise from $1,000-1,500 in 2002 to $3,500-4,000 today. Retail expenditure is expected to double again by 2020. The last eight years in the sector provide us with scenarios about growth not just in retailing but in many different areas.
The figures in the automotive sector are striking. In Europe there are 550 automobiles for every 1,000 people, while in Turkey the figure is just 92. Mustafa Bayraktar, the chair of the Automotive Distributors’ Association (ODD) explains how Turkey, which has the potential to grow six-fold in size, will catch up with Europe as follows: “In order to accelerate car sales, there need to be some significant reductions in taxes. Companies should increase their investments in branding. ~
If the taxes can be reduced and a formula developed which facilitates the utilization of scrapped vehicles, then it will be possible to achieve a sales target of one million vehicles within five years.”

GREAT POTENTIAL IN 10 AREAS
The sectors in which per capita consumption lags farthest behind Europe are also the ones with the greatest potential for growth. These are headed by IT. The British spend $1,485 a year on technology, Turks just $103. IDC Turkey Country Manager Nevin Çizmecioğlu says: “Turkey is situated in an important location in terms of attracting investment. In order for Turks to make better use of the hardware they buy, there needs to be more expenditure on software and services. We shall see double digit growth in everyday software products such as security and business intelligence.”
The three areas of the financial sector have a high potential for growth. Leasing utilization is projected to grow 14.6 fold, non-life insurance premium production 13 fold and credit utilization in banking 12.6 fold.

THOSE WHICH WILL MAKE RAPID PROGRESS
There are forecasts that, in various sectors, consumption will reach European levels in 2013 or 2015 at the earliest.
Leasing utilization is expected to match the figures in Europe by 2015. It is possible for consumption of olive oil, eggs and white meat to reach European levels within five years.