A recent team-up between Fiat and Turkish car maker Tofas may not generate much in the way of local sales, but it cements the growing role of Turkey as a manufacturer.
Tofas (thinly traded as TTOBF) now has a license to sell cars produced by Fiat-owned Chrysler, Jeep and Dodge cars in Turkey.
These brands are currently almost nonexistent in the country — fewer than 600 of these cars have sold in Turkey so far this year — so it isn’t going to move the needle for Tofas in terms of sales.
However, Fiat (FIATY) is getting access to Tofas production lines. Once retooled, there is nothing stopping the Italians from redistributing those cars elsewhere in Europe and throughout North Africa and the Middle East as well.
There is plenty of demand out there for Turkish industrial capacity. This, in turn, demonstrates that the strategy of letting the lira currency deflate is working to draw foreign business to the country.
Whether this plays into upside for the broad TUR portfolio — in which Tofas is not even represented — remains to be seen: