Otokar is the first choice for tactical armored land vehicles to meet Europe's defense industry needs.

Corporate Profile and Operational Implications of Koç Holding Synergy

Founded in 1963 with the aim of producing Türkiye's first intercity buses, Otokar has today transformed into a technology and industrial enterprise that develops, designs, and exports products with entirely its own intellectual property rights to more than 75 countries on 5 continents. The company's modern 555,000 m² production facility in Sakarya offers a high-capacity and flexible production infrastructure for both commercial vehicles and armored platforms for the defense industry.

One of Otokar's greatest competitive advantages is being part of an industrial giant like Koç Holding. Koç Holding's 44.68% majority shareholding ensures the company's credibility and strategic maneuvering ability in financial markets, especially during periods of high debt burden. This reinforces the perception of the company as a "safe haven" in the market, enabling it to overcome short-term cash flow problems and successfully complete large-scale long-term projects (e.g., the Romanian armored vehicle tender). This organizational structure plays a crucial role in enabling the company to meet international standards in corporate governance discipline, sustainability goals, and global supply chain management.

Financial Performance and the Anatomy of the "Turnaround" Story (2024-2025)

2024 was recorded as one of the periods with the harshest macroeconomic headwinds for Otokar. Global inflationary pressures, Türkiye's tight monetary policy, increasing financing costs, and the fact that exchange rate increases remained below inflation (exchange rate-inflation gap) put significant pressure on the profitability of Otokar, an export-oriented company. 2024: Operational Resilience and Financial Contraction The company's 2024 financial statements resulted in a real decline in turnover and a net loss for the period. However, the increase in sales volumes confirms that demand for the products remains strong.

9-Month Performance (Billion TL), 2024 (9 Months), 2025 (9 Months), Change (%)

Sales Revenue, 28.6, 30.9, +8%

Gross Profit, 4.3, 6.5, +52%

Gross Profit Margin (%), 15%, 21%, +600 bps

Operating Profit/Loss, -0.709, +1.399, -

Net Period Loss, -3.19, -0.436, -86%

• The most critical component of this recovery is the increase in high-profit margin military vehicle deliveries. The share of military vehicles in revenue rose from 10% in the same period of the previous year to 17% in the first nine months of 2025, representing a 55% jump in terms of units. Furthermore, the improvement in operating cash flow is noteworthy; while the company burned 1.5 billion TL in cash in the 9M period of 2024, it managed to generate 5.3 billion TL in positive operating cash flow in the 9M period of 2025. This indicates that the financing of the growth story is now on a healthier footing.

Defense Industry Segment: Global Exports and NATO Integration

Otokar maintains its leadership in Türkiye's land vehicle exports in the defense industry and competes with global rivals with its broad NATO-compliant product portfolio. The company's defense strategy is built not only on vehicle sales but also on technology transfer and establishing local production partnerships.

Strategic Analysis of the Cobra II and Romania Project

At the heart of the company's growth engine in the defense segment is the massive contract signed with Romania. This project, covering the export of a total of 1,059 Cobra II 4x4 armored vehicles, is worth approximately €857 million and is Türkiye's largest single-item armored land vehicle export contract.

The Cobra II responds to the needs of modern armies with its modular structure, high level of protection, and suitability for different mission configurations (ambulance, command and control, personnel carrier, etc.). The strategic importance of the project lies in its inclusion of local production on European soil through a joint venture established with Automecanica S.A. in Romania. This model transforms Otokar from a simple supplier into an integrated partner in the European defense industry.

However, as of January 2026, compensation claims made public have also highlighted the operational challenges of this project. The Romanian Ministry of National Defence has demanded compensation of approximately 2 billion TL due to the missed delivery targets. Although the company has filed a lawsuit to have this claim cancelled, it is inevitable that this will put some pressure on the 2025 and 2026 financials. Nevertheless, the cancellation of the project is not on the table, and deliveries are expected to be completed within the next 5 years.

Arma, Tulpar, and Future Technologies

Otokar's product range is not limited to the Cobra II:

Arma 6x6 / 8x8: Orders received from the Estonian Armed Forces and the commencement of deliveries have enabled the Arma platform to enter the inventory of a second NATO country. This is a vital reference in terms of the "interoperability" criterion in NATO tenders.

Tulpar Tracked Armored Vehicle:

In the heavy-class armored platform segment, Tulpar is positioned as a significant competitor in the European market with its high firepower and protection level.

Alpar Unmanned Ground Vehicle (UGV):

Representing Otokar's leadership in autonomous driving technologies, Alpar serves the vision of the future unmanned battlefield with its GPS and camera-supported systems.

Commercial Vehicles:

Leadership, Green Transformation, and Segment Diversification

Otokar maintains its unwavering leadership in the commercial vehicle segment in Türkiye, while also becoming the fourth largest bus manufacturer in the European market. The company's commercial vehicle strategy is built on three main pillars: Domestic market dominance, green mobility in Europe, and entry into new segments.

Domestic Market and Traditional Leadership

In 2024, the company became Türkiye's most preferred bus brand for the 16th consecutive time. The fact that one out of every three buses sold in Türkiye is an Otokar brand is proof of the company's strong dealer network and success in after-sales services.

Green Mobility and European Launches

In line with the European Union's "Green Deal" goals, the transition to electric and zero-emission vehicles in urban public transport has created a tremendous opportunity for Otokar. The company's e-Kent and e-Centro electric bus models are being tested and delivered in many European cities. The autonomous e-Centro model, in particular, reflects the company's vision of being not just a vehicle manufacturer, but a technology company offering smart transportation solutions.

Aggressive Growth in Truck and Pick-up Segments

Otokar is also strengthening its presence in commercial vehicle segments other than buses:

Atlas Trucks: In line with demand in the logistics sector, Atlas truck sales increased by 49% in terms of units in the first half of 2025. The new 11 and 15-ton models added to the product family are expanding market share.

Foton Pick-ups: The Tunland G7 model, launched in collaboration with the Chinese company Foton, has enabled Otokar to enter the high-volume pick-up market with low capital intensity. In the first nine months of 2025, the share of these new segments in commercial vehicle turnover increased from 6% to 14%.

Debt Structure and Cash Flow Analysis: Is the Turnaround Sustainable?

The most sensitive point in investor reports is Otokar's high debt burden and how this burden will be managed. The company's net financial debt is 23.8 billion TL as of the end of September 2025.

Financial Leverage and Debt Serving Capacity

Data for 2025 indicates a slight improvement in debt ratios and signals of optimization in the debt structure:

Net Debt / Equity Ratio: 2.53

Debt Reduction: Net financial debt has been reduced by 4% compared to the end of 2024.

Liquidity Situation: The current ratio of 1.12 is borderline but in a safe zone in terms of meeting short-term liabilities. The liquidity ratio of 0.49 shows how dependent the company is on the rate of inventory reduction in its cash management.

The 5.3 billion TL operational cash flow generated by the company in 2025 has provided a critical lifeline for debt servicing in a high-interest rate environment. The fact that payments from projects in countries like Romania and Estonia will be denominated in foreign currency creates a natural hedge against potential depreciation of the Turkish Lira.

CEO and CFO Perspectives: Strategic Priorities

Statements made by CEO Aykut Özüner over the past year confirm that the company's focus is on "global growth" and "technology ownership." Özüner describes the Romania project as a "reference" for Otokar's industrial presence in Europe and emphasizes the importance of local production. Furthermore, the production agreement with Daimler Buses is part of a strategy to increase the factory's capacity utilization rate and reduce unit costs.

Information from the CFO indicates that financial discipline and balance sheet optimization are prioritized. The company's capital expenditures (CapEx) reaching 2.1 billion TL in the first nine months of 2025 demonstrate continued growth appetite, supported by sustainable cash flow.

Regional Projection and Strategic Positioning (2026-2029)

The 2026-2029 period will be a time for Otokar to "reap the rewards of corporate transformation."

Defense: NATO's Eastern Flank Supplier

The changing security paradigm after the Russia-Ukraine war has driven defense spending, particularly in Romania, Poland, and the Baltic states, to record levels. Thanks to the local production ecosystem it has established in this region with its Romania project, Otokar will be a "natural candidate" and a "cost-effective domestic producer" in other armored vehicle tenders in the region (e.g., tracked armored vehicles or UGV projects) within the next 3-4 years.

Commercial: Europe's Green Cities

The goal is for 75% of city bus sales in Europe to be electric by 2030. Otokar's readiness to meet this massive demand with its e-Kent and e-Centro models could bring about double-digit growth rates in the commercial vehicle segment during the 2026-2029 period.