BORUSAN MAKES A DIFFERENCE IN THE PREMIUM AUTOMOBILE SEGMENT

Borusan Holding operates with three companies in its automotive group. Borusan Otomotiv is Turkey’s distributor of premium brands with a well-deserved reputation in the global automotive market, including BMW, MINI, BMW Motorrad, Jaguar, and Land Rover. Borusan Oto holds over 55% share in all authorized retail operations as an authorized dealer and service provider for Borusan Otomotiv. Borusan Otomotiv Premium, meanwhile, provides loans, insurance solutions, and long-term rental services for customers.

Strategic Positioning

Borusan Otomotiv, Borusan Oto and Borusan Otomotiv Premium create strong synergy and focus on added value in business processes through the following vision, mission and strategic goals:

Borusan Otomoti̇v

Borusan Otomotiv pursues the following:

• Be the first choice and pioneer company in the premium automobile and motorcycle segment,
• Offer unique experience to customers and sustainable value to stakeholders with innovative products and services in the automotive industry,
• Know customers well and provide customized, integrated, transparent and value-focused services at all touchpoints by building trust and fostering, sustainable relations,
• Be the most desirable company in the automotive industry that respects the principles of equality and supports the development of employees in a positive environment encouraging creativity and high performance,
• Be the most admired brand in the premium automobile and motorcycle segments, in line with the values of the brands Borusan Otomotiv represents, creating value for all stakeholders,
• Be a leading company in the implementation of digital solutions and create value by providing a seamless experience to customers, employees and all stakeholders with lean, innovative and data-driven decision-making processes.

Borusan Oto

• Holds over 55% share in all authorized retail operations as authorized dealer and service provider for Borusan Otomotiv,
• Borusan Oto is the customer-facing part of Borusan Otomotiv Group, therefore it focuses on creating the best experience for customers.

Borusan Otomotiv Premium

• Provides loans, insurance solutions and long-term rental services for Borusan Otomotiv customers,
• Conducts initiatives for used car operations,
• Creates a loyal customer base for Borusan Otomotiv Group with high customer satisfaction by differentiating from the traditional rental business model and providing customized and flexible solutions,
• Aims at providing loan and insurance services via partnerships, through an integrated system infrastructure and with a team positioned in Borusan Otomotiv Authorized Dealers.

Automotive Industry in Turkey

The automotive is one of the most important industrial sectors all over the world due to its volume and impact area. Fluctuations in exchange rates and inflation and fragility in global demand are the main threats of the sector today. The transformation pressure created by technological developments in the automotive industry is undoubtedly a threat to the sector. In addition to all these threats, there are also opportunities for the sector. The priorities and support given to the domestic automobile project, as well as support provided by the government for R & D and investment expenditures, encourage the sector. Turkey’s geopolitical position and the potential of the logistics industry is also an opportunity. The fact that the number of cars per person is well below the levels of developed countries and the high age of the car park is a signal that the domestic demand can be sustained.

Turkey’s passenger car and light commercial vehicle total market decreased by 22.85% in 2019 compared to 2018, to 479,060. In 2018, the total market sales figure was 620,937. Passenger car sales went down by 20.37% in 2019 compared to 2018, to 387,256. In 2018, sales were 486,321. Although contracting in the domestic market, the automotive industry is still the export leader in Turkey in 2019.

In 2019, the launch of the all-new and refreshed core models BMW 1 Series, BMW 3 Series and BMW X1, with attractive designs, advanced technologies and the right engine mix increased competitiveness.

Transformation of Marketing Communication Strategy of Borusan Otomotiv

Borusan Otomotiv started transforming its product planning and marketing communication strategy in 2019. Product offer and price positioning based on market and customer insight, along with martech assisted digital communication based on the customer journey and lead nurturing lifted the brand perception and strengthened market penetration.

Borusan Otomotiv Group brands are the first in the automotive sector with online sales platforms Borusan Otomotiv Group has enhanced the stock locators for all of its brands. The Group introduced a new sales and stock management system through the stock locators which provided stock and price transparency and improved product accessibility for customers which in turn improved the competitive edge.

In 2019, Borusan Otomotiv Group integrated S/4HANA, transforming its operation while gaining speed and agility. Borusan Otomotiv:

• Introduced RPA to increase efficiency, ensure compliance and release value to its employees.
• Moved the car buying process to online, structurally changing the rules of engagement with its BMW, MINI, Jaguar and Land Rover customers. Launched a new online platform for used cars - supporting initially B2C - extending it to B2B/C2C.
• Revamped the Customer Relations Management (CRM) operation into Customer Experience (CX) strategic services to drive a data-driven, customer-first approach.
• Initiated a cloud migration strategy for a lean and nimble IT, reduced operational expenditures (OPEX) on core IT elements.

A Safe Working Environment for Employees

Borusan Otomotiv Group is committed to complying with all applicable domestic and international laws, rules and regulations while meeting customer requirements and pursuing continuous improvement. Providing a safe working environment for its employees is a top priority across the Group. To this end, Borusan Otomotiv Group shaped its Occupational Health and Safety (OHS) Policy around the slogan: “What makes the activity valuable is not endangering the health and safety of the employees.” To protect the health of employees and to ensure safety in the workplace, the Group also actively protects the environment and conserves natural resources. In addition to fulfilling legal and regulatory requirements related to the employee occupational health and safety, Borusan Otomotiv Group strives to monitor changes in the law and makes modifications when necessary. The Group’s OHS related commitments include:

• Embracing the principle of “Health and Safety First,
• Identifying potentially hazardous situations to which the employees may be exposed, and taking necessary precautions in accordance with risk levels,
• Periodically reviewing the Occupational and Health Policy (OHS) in order to maintain compliance with applicable requirements,
• Operating in a way to protect the health of employees and to ensure work safety, to prevent injuries and occupational diseases,
• Constantly raising employee awareness on Occupational Health and Safety (OHS) issues,
• Pursuing continuous improvement with effective methods to improve occupational health and safety performance,
• Determining protection parameters related to health and safety risks that may arise from activities in order to create a safe working environment,
• Organizing training activities to effectively implement occupational health and safety practices.

New Reward and Recognition Concept of Borusan Otomotiv Group: SEN DEĞERLİSİN

SENDEĞERLİSİN is Borusan Otomotiv Group’s new Reward and Recognition concept that consists of Team Player of The Month Award, Manager of The Month Award, Puantum Awards, and Department-based Facilitation Sessions. The concept is the first in its category since it was created by the internal volunteer group Voltran. The group consists of 12 employees from different departments. They have worked for 7 months; they have found out employees’ needs and expectations using methods such as brainstorming, interviews, meetings, benchmarks, and one-to-one meetings. As part of the program, managers received Recognition Seminar on how to determine best recognition approaches for their employees. In addition to SENDEĞERLİSİN concept, in cooperation with Voltran, working hours were revised, internal mentoring program MENTORUM, Birthday Leave, and flexible working arrangement Mobile Day were implemented. The creation of internal volunteer group Voltran and implementation of concepts in cooperation with Voltran have impacted the employee engagement very positively in both ways; Voltran members and employees. Voltran members have become part of the change, they have led the change. They have used their negotiation skills and they have had the chance to evaluate the dynamics of Borusan Otomotiv Group in a holistic way. They have done magnificent teamwork and they have developed their networking skills.

Firm Steps Towards Digital Transformation

Borusan Otomotiv moved forward with firm steps towards digital transformation.

In 2019, Borusan Otomotiv accelerated the digital transformation by enhancing customer experience and improving productivity and revenue. Borusan Otomotiv:

• Led the way in the industry with migration to S/4HANA.
• Upgraded to Robotic Process Automation (RPA) for highly manual, repetitive, and rules-based processes.
• Increased efficiency, ensured compliance, and created value for employees involved in key processes.
• Revamped the CRM operation in an actionable and accessible way, contributing to all brands – with the goal to achieve better sales results.
• Accelerated customer-centric experience for BMW, MINI, Jaguar and Land Rover based on online channels.
• Received the SAP Quality Award in the innovation category by launching the company’s first executive dashboard for all brands and all devices (desktop, laptop and mobile), thus reinforcing its data-driven approach.
• Kept the momentum to provide the best customer experience with the Call Center Quality League Award as the 2nd prize winner.
• Continued the “Digital Tribe,” a program that supports the evolution of corporate culture to achieve a truly successful digital transformation.
• Launched its first customer engagement lab “BOpen” to generate customer-centric solutions and services for the enrichment of customer experience.

Reflection of Digitalization in Total Sales…

• In the first half of the year, the online sales platform “BMWnibul” was used to support dealers in sales. In addition to regular sales, aged cars in stock were promoted as “Opportunity Cars” and sold only via BMWnibul. 51% of total BMW sales were sold via this platform in 2019.
• A total of 59% of MINI sales were realized online in 2019.
• 21.7% of Jaguar sales and 19.0% of Land Rover sales were realized online in 2019.

2019 Business Outcomes

BORUSAN OTOMOTİV

• Sold 12,452 BMW, MINI, Jaguar, and Land Rover automobiles (2018: 15,569) and 716 BMW motorcycles (2018: 1,000).
• Sold 9,583 BMW units (2018: 12,728).
• Sold 1,254 MINI units (2018: 1,373), achieving the highest market share in its history.
• Sold 716 BMW motorcycles, and thus kept its leading position in the BMW Motorrad Importer Group in Eastern Europe and Asia.
• Sold 7,678 used cars.
• Borusan Otomotiv’s total sales of retail parts and labor revenue for BMW, MINI and BMW Motorrad Authorized Services amounted to EUR 114 million.
• Sold 1,371 Land Rover vehicles (2018: 1,248).
• Sold 244 Jaguar units (2018: 220).
• Borusan Otomotiv’s total sales of retail parts and labor revenue for Jaguar & Land Rover Authorized Services amounted to EUR 32 million.
• MIXX Award Europe – “Silver MIXX Award” in the program marketing category with BMW 4 Series Addressable TV execution.
• MIXX Award Turkey - “Bronze MIXX Award” by BMW in the direct marketing category with Facebook Offline Conversation Project.
• Social Media Awards Turkey – “Golden Award” by BMW in the effective use of data in the social media category with Facebook Offline Conversion Project.
• Social Media Awards Turkey – “Bronze Award” in the use of new technologies category with BMW 4 Series Programmatic Addressable TV execution.
• Facebook – Video Polling Case with The New BMW 3 Series launch.
• Automotive Distributors Foundation’s (ODD) Sales & Communications Gladiators Awards – “Integrated Communication Campaign Award” for the end-to-end communication campaign for The New BMW 3 Series.
• BMW won the “Customer Brand Award” in the Passenger Car category at the A.L.F.A. Awards.
• At the MINI Marketing Awards 2019 held for the region, MINI Turkey won the First Prize among 25 countries with its “Questions with Serkay Tütüncü” Project for MINI Countryman SUV.
• MINI Electric was introduced by a pre-launch display event at İstinye Park.
• BMW Motorrad won the Golden Award in the Motorcycle category at the A.L.F.A. Awards.
• Borusan Otomotiv was the winner in the Automotive Premium Segment A.C.E. Award (Achievement in Customer Excellence) with the BMW brand for the sixth consecutive year. Complaints from customers via sikayetvar.com were evaluated in terms of the first reaction time to the complaints, complaint resolution process, resolution rate, level of satisfaction with results, and positive feedback percentage.
• Initiated by Borusan Otomotiv in 2008, Borusan Otomotiv Motorsport (BOM) won - over the course of 12 years - 18 championships in 352 races, which took place in 36 different circuits in 20 countries on four continents. In the 2019 season, Borusan Otomotiv Motorsport (BOM) participated in the GT4 European Series, which included 50 teams and over 100 drivers from 12 brands and 35 racing teams. Borusan Otomotiv Motorsport (BOM) represented Turkey successfully in races held in Italy, France, United Kingdom, and Holland, taking the podium in second place in Misano. The team participated in the Turkish Championship in two categories and won them both, being also nominated The Teams Champion for the fifth time. BOM E-Team, founded in 2018 with the aim of playing a part in the emerging e-sports industry and representing Turkey in this field, organized the Virtual GT Championship for the second time with the motto, “The Path from Virtual to Reality.” The team achieved its goal by introducing one young driver and supporting him in two races in the Turkish Championship with two first places on the podium.

• Borusan Otomotiv was the Bronze Winner of the SAP Quality Award in the Innovation category in Turkey. The award was granted for the SAP Executive Dashboard project, which supported a data-driven culture at the executive level, providing insights to the business questions of each company/leader, in a holistic, real-time manner. Borusan Otomotiv has consistently improved its call center management and received the 2nd prize for the Call Center Quality League Award in 2019.
• Borusan Otomotiv Ocean Volunteers has established “Ocean Libraries” in different locations for the last three years. In 2019, Borusan Otomotiv Ocean Volunteers opened a library at Alagün Primary School in Siverek, Şanlıurfa with 4,000 books donated by its employees, families of employees, customers, and third-party suppliers. The motto was “Reading is freedom.”
• Heavy-duty wooden pallets were reused to create homes for dogs. With the participation of employees and students of Asım Kocabıyık High School, dog houses were produced at Borusan Oto workshops and transferred to Giresun to support the lives of dogs under severe winter conditions.
• At the Cannes Lions International Creativity Festival, the largest global event in the creative marketing community, Land Rover won Bronze Lion in the Outdoor category with the project “Land Rover Beyond Fashion.”
• At the MediaCat Felis Awards, Land Rover won a Felis Award in the Print Category with the project “Land Rover Beyond Fashion.”
• At the Crystal Apple Festival, the largest marketing communication and creativity event in Turkey, Land Rover won Crystal Apple Award for the project “Land Rover Beyond Fashion” in the Print/Fashion & Accessories and Outdoor/Textile & Fashion Categories. Land Rover also won Grand Prix in the Print Category.
• At the Outdoor Awards, “Jaguar I-PACE shares its electricity” project won an award in the Outdoor/Automotive Category.

BORUSAN OTO

• Borusan Oto reported strong annual operational results in 2019, despite the challenging business environment. New car and motorcycle sales volume of Borusan Oto reached 6,263 units at the end of 2019 and used car sales volume was 4,811 units.
• Borusan Oto introduced a completely new business model for the first time in Turkey in collaboration with an insurance company. No insurance approval is needed on standard insurance claims, to reduce inefficiencies and complexity of the procedures and shorten the lead time for better customer experience.
• New projects were launched successfully to increase loyalty and regain the lost customers of older cars.
• Borusan Oto created the video series “Driving Talks with BOM Academy” and posted them on social media in five episodes throughout the year. With this project, besides strong brand and company communication, Borusan Oto aimed to share useful driving tips with followers.

BORUSAN OTOMOTIV PREMIUM

• In 2019, Borusan Otomotiv Premium just got the reconciliation of stock movement as 2,787 units. The optimization strategy was completed by 31.46% fleet reduction.
• Total turnover was EUR 89.5 million, including EUR 41.2 million as rental revenues, EUR 47.2 million as revenue from used car sales, EUR 1.1 million as revenue from loan-insurance operations.

Borusan Otomotiv İkinci El Platform: Borusan Otomotiv İkinci El is an online used car platform and technology initiative. The platform serves 23 Borusan Otomotiv used car dealers, four brands, and rental operations also designed for cross-selling opportunities. The system offers customers the possibility of pre-valuation for their own cars via trade pricing module (powered by Borusan Araç İhale) and pre-loan approval via Borusan Otomotiv Financial Solutions.

Consignment Project: The project aims to reach potential car owners in the premium segment to help them exhibit and sell their cars in Borusan Otomotiv’s Samandıra premises and avoid seller procedures. With this unique business model, car owners can now eliminate time spent for showing cars to different buyers and dealing with countless negotiations. Borusan Otomotiv undertakes all services such as car expertise, offering cars to potential buyers, price negotiations and contract procedures. In 2019, 38 cars were sold via the Consignment Project.