Tofas newsflow

Tofas (TOASO TI, BUY) CEO Kamil Basaran reiterated that the company is working on a couple of new projects (which we assume to include Doblo  project for the US, the domestic passenger project, and the Minicargo project). The company is hopeful that Tofas could take a role in the production of new product line-up of Fiat- Chrysler.  The work on Doblo export project to the US continues.  The CEO reiterates the difficulty of achieving 40% Value Add in auto sector, which Basaran views as an obstacle for auto investments to be classified as strategic investments.  Compared to the previous comments, the company sounded more cautious on the prospect of investing in so-called “domestic car” due to financial feasibility.  Our view: The more cautious view on “domestic car” project can disappoint some investors, however we like the continued high focus on return potential for new projects.