Dear Shareholders,
2010 was the year for relieving the effects of the global crisis and beginning of recovery. The rules of the game were re-defined all over the world. Particularly in automotive sector policies to protect local industrialists have become current issue worldwide, while the consumers being already important have been focused on more deeply. The competition conditions, to make customer out of consumers, who had scarce resources in hand, have become more compelling. Matters which are not only currently demanded by the clients but which they will demand and need and value in the future began to be reflected into the products to higher extent. The companies endeavoured to comply with the changing market conditions and the new rules of the game, even to direct the game by tipping the adverse conditions in their favour.
Even though the economies enjoyed a general recovery process, 2010 was a hard year for defence and commercial vehicle segments where Otokar is operating. Domestic bus market, constituting a major part of Otokar's turnover, suffered from 11% narrowing and the bus segment was the only narrowing one among the automotive sector which was the most rapidly growing sector in Turkey during 2010. The situation in the European marker, Otokar's main export market, developed parallel to the Turkish market. Global crisis affected the defence expenditures of the world countries, as well. Developed countries reduced their defence industry expenditures which resulted in greater competition throughout the world.
Despite of all these adverse circumstances, we at Otokar tipped the conditions in our favour in the best possible way. The rule of the game was not anymore to address wide populations in the same way and through same products. We took place in hot sale areas through face to face meetings and vis-à-vis communication. When doing so, we brought up new topics leading to areas which they needed but were not aware of and revealed different areas of use for our products. Regarding military vehicles, we strived to increase our product quantity in existing markets and gain new customers. All these efforts made our Company leader of the domestic bus market and the greatest privately owned company in the defence industry during 2010. In last year as well we maintained to contribute to the national economy and to preserve our profitability.
Looking to the future, we expect that the year 2011 will bring new excitements in many fields.
Before all else, global crisis made the protection and promotion of national economy a current issue. We expect that such approach will yield positive results and effects on the whole segment, not only on the defence industry. In 2011, we expect to enjoy recovery in the market as result of acceleration of investments based on the effects of Turkey's general election to be held and of domestic products will be preferred for public procurement. Similarly, transportation of disabled which will become compulsory for Turkish metropolis will increase the vehicle refresh rate. For Europe, on the other hand, we expect that the market will begin to recover and the Turkish products will be distinguished backed up with the advantage of being economic.
Regarding trailer, we look forward that the product refresh rate in the market will increase due to the regulations which will come into effect in future years. In this year we will contribute to the recovery of the market with the new models to be introduced.
As all of us may well know very well, Otokar has become a world brand in the defence industry. Armoured vehicles produced by Otokar are used more than 20 countries and are gathering attention and preferred increasingly, especially based on their efficiency shown in UN tasks. In 2011, we will primarily focus on the delivery of the orders we received last year. In addition to conclusion of new sales contracts, we will carry on our studies on product development.
During the new year, Otokar will continue to show maximum effort to complete and to successfully maintain current projects. One of these project is ALTAY Tank Project the second phase of which will be executed in the year 2011. Another important subject to be handled will be alternative fuel vehicles.
For us, the year 2011 will be the year when we take important steps towards our targets in new playgrounds, with our new players and new strategies. As always, we will work hard to achieve new successes, to create value for all our stakeholders and to preserve our sustainable growth.
I wish a successful 2011 for Otokar and the shareholders.
Yours sincerely,
Kudret Önen
Chairman of the Board of Directors
