Location strategy for the automotive supply industry: OEM proximity and the supply chain

The modern automotive supply chain has moved to the JIT (just-in-time) model and increasingly to the JIS (just-in-sequence) model. Under these models, the supplier is expected to be able to deliver to the OEM within 30 to 60 minutes.

Although plot prices near the OEMs located along the Bursa, Kocaeli, and Sakarya corridor carry a premium, supply capability forms the foundation of the investment. Distant plots are forced to offset this disadvantage with logistics costs.

Access to qualified workers, engineers, and technicians is critical to a facility's success. Proximity to vocational high schools, technical universities, and training institutions should be assessed.

The cost of worker shuttle circulation is a hidden component of the location decision. Although the annual shuttle budget may appear modest, over a 10-year horizon it accumulates to a significant sum.

Automotive supplier facilities (pressing, welding, painting, plastic injection) require high and stable energy. The transformer capacity the plot is connected to, the natural gas line, and, where required, the compressed air/water infrastructure directly determine whether the production line can even be installed.

Reinforcing energy infrastructure after the fact is both costly and time-consuming. While this capacity often comes ready-made with a parcel inside an OSB (organized industrial zone), on a plot outside an OSB the investor must separately factor in connection fees and the time they require.

As OEM orders grow, the supplier needs to add production lines. A plot that fits 'perfectly' for today's needs can turn into a bottleneck three years later. The right decision accounts not only for the current production area but also for the reserve needed for future expansion.

Parcel geometry also determines flexibility: a clean geometry that accommodates loading ramps, maneuvering space, and a possible additional building is far more valuable than a narrow and irregular parcel. A location with no possibility of expansion is a hidden ceiling for a growing supplier.

The supplier location decision must be made on the basis of total cost of ownership rather than price per square meter: land cost + logistics cost + shuttle/workforce access + energy connection + expansion flexibility. When these line items are added together, the 'cheap' plot often turns out to be the most expensive option.

In the Lizaz Emlak approach, an automotive supplier plot is quantified by placing OEM proximity and the supply cycle at the center, together with the infrastructure, workforce, and expansion layers. The goal is not to select the lowest sticker price, but the location that builds the most solid ten-year production economics.