Dear Shareholders,
We are happy and proud for having sustained the earnings and the added values we have been bringing to the customers, the shareholders, the social stakeholders and the country despite the economic crisis prevailed during 2009.
The economic crisis we passed through last year, which all of us monitored closely, has affected many countries and sectors deeply. Many companies exerted great efforts to preserve their existence, let alone gaining profits. The companies which have built their long term plans on the strategy of "sustainable growth" were affected from the crisis less. The recent crisis has shown indisputably that in the reign of globalization no company and no sector can isolate itself entirely from any economic, social and political development occurred in any part of the world and that attaining a sustainable growth is becoming more difficult day by day.
The market conditions are harder than before in all sectors. The customers and users who are acting on global scale and more prone to be affected from the global developments are now more selective, making their research more carefully and diligently. For the customers who have higher expectations, the product quality and the manufacturing technology, which have become standard owing to the ever increasing competition, are no longer the primary drivers of the purchasing decision. The customers and the users, who are going with lesser resources especially after the recent crisis, are now expecting more returns from their investment. The customers are now much more sensitive to getting the best product and service more specifically designed and manufactured to meet their specific needs and expectations for the lowest price.
This change in the requirements of the customers, coupled with the ever increasing competition urge the companies to focus on their customers and to give more importance to three areas in order to sustain the profits and growth. These areas are Costs, Innovation and Design. This trend is evident in the automotive industry as well. The global manufacturers are moving their manufacturing plants to the developing countries in order to reduce their costs on the one hand and giving priority to the design and innovation so as to meet the requirements of the customers on the other.
The recent developments unfortunately pose a threat for Turkey as the ever growing "manufacturing base" of Europe in the automotive industry. The global automotive manufacturers who cannot sacrifice the innovations, though they cannot increase the prices during the periods of crisis, are moving their manufacturing to various countries where the manufacturing costs are lower in order to preserve their competitiveness, reduce their manufacturing costs and sustain their profitability. At this point, in order for Turkish manufacturers to turn this threat into an opportunity and to attain a sustainable growth in the automotive industry by preserving their competitive advantages, they must have their own technology and create their own designs.
I am proud to say that Otokar, by having foreseen these trends, have established its strategies in this direction, achieved the competitive advantages, and created its own designs and intellectual properties on global scale. Having focused on the expectations and requirements of its customers since the very day of its establishment, Otokar is one of the rare companies which are capable of manufacturing the vehicles of its own design with competitive costs bringing competitive advantages on global scale. That Otokar has been maintaining the balance between the military vehicles and the commercial vehicles and thus minimizes the impact of the fluctuations in the market is one of the factors that guarantee the sustainable growth of Otokar.
Owing to these characteristics, Otokar has not sacrificed the sustainable growth and has continued to bring profits to the shareholders and the country by attaining a growth of 5 percent in the turnover despite the economic crisis during 2009.
While the demand for heavy commercial vehicles shrank by 34 percent in Turkey, Otokar has increased its market share and become the market leader in small and medium size bus segment. Otokar successfully continued the projects commenced in the defense industry segment, reinforcing its position as the manufacturing and exportation leader of tactical military vehicles. Otokar has introduced significant innovations in the range of public transport vehicles and been awarded prizes for the buses of its own design. Detailed information is given in the following sections about the other successes achieved by Otokar during 2009. You can also find a summary of the improvement and productivity increasing works conducted by Otokar in order to sustain the growth and profitability of the company.
We have entered a new year during which we are able to maintain the success we have achieved and continue the works with the same speed and decisiveness to do the better. 2010 will be a difficult year during which the effects of the economic crisis will subside but the recovery in the markets will take a longer time. With our ever expanding product family, we will preserve our leading and pioneering position in our markets, have a better position in the European market in the commercial vehicles segment and demonstrate our designing, engineering and manufacturing capabilities through the projects on the agenda in the defense industry market in Turkey and the world.
We will work to complete the projects we have started, to achieve new successes, to preserve our sustainable growth and to convert our works to earnings for our shareholders.
We wish a successful and prosperous 2010 for Otokar and the shareholders.
Yours sincerely,
Kudret Önen
Chairman of the Board of Directors
