Borusan, Manheim launch second-hand car venture
Posted by meb at January 9th, 2008
A Turkish industry and service group and a U.S.-based provider of used vehicle services have launched a 50/50 joint venture to provide wholesale buyers with Web-based second-hand car sales services.
The service launched by Turkish Borusan and U.S.-based Manheim has been named Borusan Manheim. Manheim is the largest second-hand care sales provider in the world with presence in 17 countries and a sales turnover of 2.8 billion in 2006.
Once the new venture has been launched, the online trading platform of Borusan’s automotive reference Web site, Otomax, will be run by the new firm. Otomax will continue its other online business activities and the publishing of its car sales magazine. The annual trade volume of the Otomax Web site stands at $100 million.
“We believe that the combination of the strengths of Borusan and Manheim will bring notable dynamism and grwoth in the second-hand car sales sector in Turkey,” Agah Uğur, chief executive officer of Borusan Group, told reporters yesterday.
Second-hand market growth
Mark Brunn, vice president of international operations at Manheim, said there is notable growth potential in the Turkish second-hand car market.
“The Turkish second-hand car sales market is still very immature. Many of the deal take place on one-to-one basis and often values are not totally exploited,” he said. “A young and energetic market like Turkey is a big opportunity for us,” Brunn added.
In 2007, some 858,000 second-hand cars were sold in Turkey, showing notable growth since 2001 when sales totaled 641,294. But as many of the transactions take place without appropriate bureaucratic procedures, the real sales volume of second hand cars in Turkey is likely to stand at 1 million.
Mike Langhorne, senior vice president of international operations at Manheim, described the recent decision of the Turkish Ministry of Finance to increase the value added tax (VAT) on leasing from 1 to 18 percent as unfortunate. The decision is expected to discourage foreign investors from engaging in leasing activities in Turkey. “The increase is an unfortunate development, which is unheard of in other markets. Some parts of the [car sales] industry will have to bear the costs of the increased tax. Although the development is likely to limited effect on our business, we cannot say that we are not interested in this issue at all,” said Langhorne.
Source: Turkish Daily News
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