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PRACTICAL EXPERIENCE IN THE IMPLEMENTATION IN TURKEY OF FICOSA

INTERNATIONAL

April 17th, 2013

18th February 2011

V.0203

Family own company founded in 1949 Headquarters in Barcelona (Spain) Activity: Automotive Global Supplier (Tier1) Turnover: € 800 MM Team: 7.500 people worldwide We are present in 19 different countries (Europe,

North America, South America, Asia) Our R & D investments represent the 4% of our total

Group’s sales

FICOSA Overview

Ficosa Headquarters & Tech Center inViladecavalls (Barcelona - Spain)

36 M €

195 M € 593 M €

1949 – 1986Local market

1987 – 1995European market

1996 – 2001Global market

2002 – TodayGlobal organization

745 M €

FICOSA Group Structure

Communications V2V & V2I

ADAS Systems

Driver Monitoring

Innovative controlsHaptic consoles

Battery pack (EV – HEV)

Automotive IndustrialVehicle

Ficosa Technology

Rear-viewSystems

Rear-view

ADAS

Communi-cations

Wind Systems

Components and systems for solar energy

Systems for seats & doors

UnderhoodSystems

Command & Control Systems

ElectronicEngineering

Renewables

P

O

PLANTSTECHNICAL CENTERSCOMMERCIAL OFFICES

TC

Detroit (Mi)Crossville (TN)Shelbyville (KY)Berne (IN)

OP TC

Salinas-VictoriaEscobedo

P TC

Sao Paulo

P TC

Buenos Aires

P

Tamworth

OLe Chatelet-en-BrieLe Neobourg /Bruyeres/Dieuze

OP TC

Headquarters &9 productions plants

OP TC

Rüsselsheim/Köln/LindauMünchen/Wolfenbüttel

OP TC

Porto Venaria RealeMorcone

OP TC P TCSouth Africa(License agreement)

BursaGemlik

P TCPune (Two plants)

Pant Nagar (Joint –vent.)

P TC

Shanghai

P TC

Tokyo (Office)

TC

Korea (Joint -venture)

TC

Rumania (License agreement)

Russia (License agreement)

Dabrowa Gornicza

P

FICOSA Global Reach

O

O

OEM presence increase (FORD, TOYOTA and increase in Renault, Fiat and Hyundai).

Low labor cost for labor intensive products with low physical volume.

Strategic location (close to EU and emerging countries).

Main Reasons For Turkey Implementation

STRENGTH

Strong customer base (OEMs) in the country Big internal market (75M population) A highly trained university degree work force (METU, ITU and BU) High percentage of English speaking university degree personnel Salary level for direct employees (1/3) Low level of absenteeism (2-4% vs. 6-10%) Extensive and good supplier base (but Chrome, zamak, electronics) Willing, proud and targets beyond company Warm approach to foreigners Benefits of a Free Trade Zone

WEAKNESSES

Interest rates for financing Retirement at young ages for certain employees Salary level for Indirect employees (managers and engineers) Distance to Western Europe for certain volume products Poor internal road infrastructure Difficulty to find International schools for expatriates outside Istanbul Lack of Spanish and qualified French speaking engineers in some areas Qualified Technicians to be trained internally

OPORTUNITIES

Subsidies are being increased with the years (Tubitak and Universities support) (new products and innovation) Close to many emerging countries Working calendar (45 h/wk, 2152 h/y) Country with young population Political and economical stability Strong growing economy. Dynamism

THREATS

A growing country requires experienced people. Many opportunities in the market for employees, can create high turnover Inflation rate around 8% yearly forces quick increase of employees cost Labor cost increase due to Work Unions implementation

SWOT Analisys Turkey

Population in Turkey

Free Trade Zone Advantatges

100% exemption from customs duties and other assorted duties.  100% exemption from corporate income tax for manufacturing companies.  100% exemption from value added tax (VAT) and special consumption tax.  100% exemption from income tax on employees’ salaries (for companies that

export at least 85% of the FOB value of the goods they produce in the free zones).

Goods can remain in free zones for an unlimited period.  Companies are free to transfer profits from free zones to abroad as well as to

Turkey, without restrictions.

Technopark Advantatges

Revenues derived R&D activities are exempt from income and corporate taxes

Salaries of R&D and support personnel employed in the zone are exempt from all taxes.

(The number of the support personnel covered by the exemption shall not exceed 10 percent of the number of the R&D personnel).

Enterprises may make the investment, required for the production of the technological product obtained as a result of the R&D projects conducted in the zone, in the TDZ, if deemed suitable by the operator company and allowed by the Ministry.

All applicable until end of 2023

Taxes

Income Scales (TRY) Rate (%)Up to 9,400 15

9,401 – 23,000 20 23,001 – 53,000 2753,001 and over 35

3. Social Security Social security is not a tax but rather a payroll cost to the employer. The employer and employee contribute to a social security system comprising items such as sick pay, work related accidents, unemployment coverage, pensions, and other programs. Employer's contribution: 19.5% Employee's contribution: 14%

1. Corporate Income Taxes

the basic corporate income tax rate levied on business profits is 20%.

2. Individual Income Taxes

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Thankswww.ficosa.com